Commons Sitting of 18 March 1996

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

    Coronary Heart Disease
    Mr. Simon Coombs: To ask the Secretary of State for Wales if he will make a statement on progress in reducing the incidence of coronary heart disease in Wales. [19373]
    The Parliamentary Under-Secretary of State for Wales (Mr. Rod Richards): The death rate from this disease has fallen by 11 per cent. since the mid-1980s.
    Mr. Coombs: I am sure that the whole House wishes to congratulate the Welsh rugby team on its excellent victory on Saturday—a victory over the French that was as rare as it was helpful.
    My hon. Friend has given the House excellent figures on the reduction in the level of coronary heart disease in Wales in the past 10 years or so. I am sure that he agrees that those figures should be regarded with anything but complacency as they are still far too high. What more can
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    be done in Wales to reduce the level of heart disease, either in terms of hospital treatment of those affected or in terms of the promotion of a healthy diet and exercise?
    Mr. Richards: I thank my hon. Friend for his remarks about the magnificent victory of the Welsh rugby team over France at the national stadium last Saturday. I am sure that he wants to join me in thanking the Welsh rugby team for giving the English rugby team the helping hand it needed to win the championship.
    My hon. Friend's comments about the Government's measures to improve the treatment for coronary disease in Wales are also most welcome. I am sure that he will be delighted to know that, in October 1997, a new cardiac unit, which will be capable of performing an additional 600 adult open-heart operations a year, will be opened in Morriston.
    Mr. Rogers: As a positive step towards reducing the number of heart attacks among the Welsh population, will the Minister join me in criticising the leader of Cardigan council, who wants to exclude anyone from building houses in Cardigan unless they were born within 25 miles of the boundary? Does he agree that that statement, besides causing a lot of heart attacks among the 95 per cent. of the population who would be precluded from living in Cardiganshire, is either lunatic nationalism or racism at its worst?
    Mr. Richards: I am not aware of any remarks made by any leader of any political group in Cardiganshire that have affected the incidence of heart disease either in Cardiganshire or anywhere else in Wales.

    Welsh Assembly
    Mr. John Marshall: To ask the Secretary of State for Wales what representations he has received urging him to hold a referendum on a Welsh Assembly. [19374]
    The Secretary of State for Wales (Mr. William Hague): Since September last year, I have received four written representations about the possibility of a referendum on a Welsh Assembly.
    Mr. Marshall: I thank my right hon. Friend for that answer. Is he aware that when there was last a referendum on whether there should be a Welsh Assembly, the people of Wales voted four to one against, a vote in which Mr. Neil Kinnock opposed a Welsh Assembly? Was he not right then and is the Labour party not wrong now to oppose a referendum on a Welsh Assembly? Indeed, many Conservative Members think that there should be a referendum on a single currency as well.
    Mr. Hague: My hon. Friend is right about what happened the last time there was a referendum on a Welsh Assembly. Only 12 per cent. of the electorate in Wales supported it; it was rejected by four to one. Perhaps that is why Labour Members do not have the confidence or the courage to say that they will ask the people about setting up an assembly in future. The extraordinary thing is that they plan to hold referendums in the English regions on whether there should be assemblies there, but not to consult the people of Wales.
    Mr. Ron Davies: I hope that we have a very early opportunity to consult the people of Wales at a general election. We shall invite them to pass judgment on our proposals for devolution and, at the same time, on the record of this sleazy and incompetent Government.
    Is it not the case that, on a referendum on devolution, as on so many other matters, the Government are split from top to bottom? They cannot agree on their policies, they do not know whether they believe in referendums and if they do believe in them, they do not know whether they should be binding. As the Secretary of State is supposed to represent our interests in Cabinet, will he now give us a straight answer? Does he believe that referendums should be used to settle constitutional issues?
    Mr. Hague: My right hon. Friend the Prime Minister has made clear the Government's position, which is that there are constitutional issues on which a referendum might be appropriate. I wrote to the Leader of the Opposition some weeks ago asking for clarification of the Labour party's approach to the questions involved, and specifically with regard to a Welsh Assembly. I am still awaiting a reply—perhaps because the right hon. Member for Sedgefield (Mr. Blair) is awaiting a clear view on devolution policy from the hon. Member for Caerphilly (Mr. Davies), in which case he will be waiting for a very long time.
    Mr. Sweeney: Does my right hon. Friend agree that it would be grossly irresponsible of the Government to sacrifice the sovereignty of Parliament at Westminster, in particular without the full-hearted approval of the British people? Will he bear that in mind in making representations at Cabinet level in favour of rejecting first, any idea of a Welsh Assembly, and secondly, any idea of a single currency? Will he assure the House that on no occasion would either of those principles be sacrificed without first holding a referendum?
    Mr. Hague: I shall certainly bear in mind my hon. Friend's representations and I shall communicate them to my colleagues. The extraordinary aspect of the approach of Labour Members is that they had a referendum on devolution 16 years ago, which it is now their express intention to ignore.
    Mr. Ieuan Wyn Jones: May I bring the Secretary of State back to the question? The hon. Member for Hendon, South (Mr. Marshall) asked whether the right hon. Gentleman had received representations urging him to hold a referendum. Why is he so frit about it? Why does he not accept the challenge put to him by my party to hold a multi-optional referendum now, before the election, on the issue of constitutional change in Wales? Once his policies have been rejected by the people of Wales, what right will he then have to demand a referendum?
    Mr. Hague: I do not need to hold a referendum in Wales because I am not putting forward so daft a policy as to advocate the creation of a roomful of hot air and another lot of politicians who would cost the Welsh taxpayer a great deal of money for no practical gain.

    Voluntary Organisations
    Mr. Michael: To ask the Secretary of State for Wales what steps he is taking to ensure that voluntary organisations in Wales receive adequate assistance from his Department during the 1996–97 financial year. [19375]
    The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones): The voluntary sector plays a key role in meeting the Government's aims. We shall continue to assist it.
    Mr. Michael: I am glad to hear the Minister's acknowledgement of the importance of the voluntary sector. Is he aware that this year, in particular, the financial constraints on local government, together with the pressures of local government reorganisation, are making it very difficult for local authorities to provide the support and continuity that the voluntary sector needs to fulfil the requirements to which the Minister has paid tribute?
    Does the hon. Gentleman accept that the Welsh Office should be playing its part in trying to smooth the transition to ensure that the work of voluntary organisations throughout Wales continues to receive whole-hearted support and continuity in the finances necessary to do their job?
    Mr. Jones: The hon. Gentleman and I are in full agreement on the principles involved. During 1994–95, the last financial year for which full figures are available, the Welsh Office either directly or indirectly supported the voluntary sector to the extent of £24 million. For the coming financial year, through the Wales Council for Voluntary Action and the county volunteering councils, support for volunteering in Wales will increase by 30 per cent.
    Dr. Spink: Does my hon. Friend accept that in Wales, as in the rest of Great Britain, the voluntary sector represents all that is good and characteristic of a unique British tradition? Will he join me in welcoming the fact

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    that the resources available to the volunteering in Wales fund will be increased during the coming year by 55 per cent?
    Mr. Jones: My hon. Friend is correct. We all acknowledge and applaud what the voluntary sector does in Wales. I had the opportunity last night at Duffryn house to support Ely home start, which is yet another example of the way in which the voluntary sector adds a real human face in Wales—far more than could even the most compassionate bureaucrat. I hope that that will continue.
    Mr. Ron Davies: Will the Minister join me in commending the work of the voluntary organisations that have been involved in the clean-up following the grounding of the Sea Empress, most notably the Royal Society for the Protection of Birds, the Royal Society for the Prevention of Cruelty to Animals and Dyfed Wildlife Trust? Will he in particular ensure that they are not financially penalised for their public-spiritedness?
    Does he understand that the greatest assistance that he can give them is an assurance that the Government will do everything in their power to prevent the recurrence of such an accident? To that end, will the Government bow to the request of the overwhelming majority of opinion in Wales—Members of Parliament, local authorities and voluntary organisations—and agree to the establishment of a fully independent inquiry into how the accident happened, and the adequacy of the Government's response?
    Mr. Jones: The last part of that question has been well dealt with already. On the voluntary organisations, I join the hon. Gentleman in applauding what they have done. The Government are committed to trying to ensure that anyone who has suffered as a result of the accident will have the opportunity to claim compensation. As he should know, my right hon. Friend the Secretary of State has announced transitional arrangements to help the process along.

    Welsh National Lottery Charities Board
    Mr. Touhig: To ask the Secretary of State for Wales what representations he has received on the establishment of a Welsh national lottery charities board. [19376]
    Mr. Richards: None.
    Mr. Touhig: I am sure that the Minister knows that we have separate arts and sports councils that distribute lottery funds in Wales. Would it be appropriate to examine the possibility of setting up a Welsh national lottery charities board that would take especial account of the needs of Wales and of charitable organisations in Wales? Would that not be worth while, and should the Minister not consult on it?
    Mr. Richards: I have already said that no one has made any representations to my Department on the issue. From that, I conclude that the current system is working rather well. I was fascinated to find the hon. Gentleman suddenly taking an interest in national lottery issues, but then I discovered that he has joined a 21-member Labour
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    party committee examining the national lottery. Such committees are intended to undermine the good works of others and are known in the Labour party as slangos.

    Tourist Industry
    Mr. Llwyd: To ask the Secretary of State for Wales what evaluation his Department has undertaken of the effects of the current guidelines on the use of directional signing on the tourist industry in Wales; and if he will make a statement. [19377]
    Mr. Gwilym Jones: Following a recent consultation exercise, guidance to local authorities was issued on 6 February 1996, which enables a wider range of tourist destinations and facilities to be eligible for the white on brown traffic signs.
    Mr. Llwyd: I thank the Minister for that response. I am disappointed that, once again, the Welsh Office is moving 18 months after the Department of the Environment. I have read the document, and a fascinating read it is, too. People in the tourist industry still feel that there is not enough scope for them to put signs up during the short summer period when they have to make a living. There should be further relaxation. The tourist industry is the most important in Wales. Will the Minister take a more relaxed attitude to individual applicants who want to put signs out?
    Mr. Jones: Individual applications are for local authorities to consider. They now have more opportunity, under the more flexible guidelines that we have offered them, but that is not the end of matter. We intend to review the process after one year.
    Mr. Fabricant: Is my hon. Friend the Minister aware that, a week ago last Friday, I spoke to 200 charming ladies in Colwyn Bay but almost lost my way because, even though my mother is a Welsh speaker, I am not? Is it not the case that the majority of the Welsh people are not Welsh speakers and that the majority of the tourists who go to Wales are not, by definition, Welsh? They will not be Welsh speakers. While one respects important minority languages such as Welsh, cannot Welsh language signs cause great confusion for drivers?
    Mr. Jones: My hon. Friend's encounter with the ladies of Colwyn Bay will be of great interest and concern to my hon. Friend the Member for Clwyd, North-West (Mr. Richards). I am sure that my hon. Friend's difficulties will disappear with greater opportunities. I was pleased to see today that Cardiff business school has brought out what taking the A55 expressway across north Wales has meant. It says: "Upgraded A55 brings region out of isolation."
    It is going forward and provides advantages for all visitors, including my hon. Friend.
    Mr. Alex Carlile: Will the Minister reflect on the fact that the ubiquitous brown on white sign enforces a uniformity that is uncharacteristic of Wales? Would it not be better to allow farm guest houses to put up their own tasteful signs by the roadside for part of the year to advertise their facilities? That would enable them to take advantage of the passing tourist trade that they are currently losing.
    Mr. Jones: I am keen on encouraging further deregulation, which allows greater flexibility to Welsh local authorities. The hon. and learned Gentleman must accept that, currently, there is a need for appropriate rules and regulations to govern the guidelines. Not least, one should not forget that the prime purpose of the signs is not advertising, but to give direction. We are committed to reviewing the guidelines after one year of operation to see whether further opportunities exist to provide yet more deregulation and improvements.

    Council Tax
    Mr. Rowlands: To ask the Secretary of State for Wales what is his latest estimate of the average increase in council tax likely to be raised by each of the county boroughs of (a) Mid Glamorgan and (b) Wales. [19378]
    Mr. Gwilym Jones: The band D increase for Bridgend, Merthyr Tydfil and Rhondda, Cynon, Taff is between £97 and £99. The average Welsh band D increase is £74.
    Mr. Rowlands: Is the hon. Gentleman, and particularly the Secretary of State, aware that, had the increases not been made, either school budgets would have been slashed, or teachers made redundant? Would the Secretary of State now admit modestly, to us at least, that he made a serious miscalculation when he introduced the original local government finance arrangements, given their impact on council taxes? Will he therefore review and revise those arrangements in the coming year?
    Mr. Jones: No. Every council in south Wales has the opportunity to spend more than the agreed basis in the coming financial year as though they had existed during the current financial year. It is now up to local authorities to make the best use of the substantial resources available to them. Their electors would be better encouraged if those authorities were not spending their time considering how they could put up councillors' salaries and improve redundancy packages.
    Sir Wyn Roberts: Will my hon. Friend confirm that councillors across Wales have markedly increased their allowances, some by as much as 400 per cent? Does he also agree that those increases are minimal compared to those that would occur if the capping regime were to be removed? Is it not also true that those increases have been dampened down by the actions of my right hon. Friend the Secretary of State?
    Mr. Jones: My right hon. Friend is absolutely right. Capping has fulfilled the essential purpose of protecting local council tax payers from the worst excesses of Labour councils. At the moment, councillors are contemplating putting up their salaries to £24,000 a year. I am sure that it is as a consequence of that, and of their other actions, that they are now being forced to set up redundancy working parties to pay them after they have been thrown out of office.
    Mr. Win Griffiths: Will the Minister confirm that, in the next financial year, the Welsh Office revenue support grant will represent a smaller proportion of council spending than in previous years? Will he confirm that the Secretary of State recognised that when he increased the
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    capping limit from 0.5 to 3.5 per cent. of the notional budget? In the next financial year, half the population of Wales will pay a council tax increase of 25 per cent. or more, and that will be well within the guidelines issued by the Secretary of State.
    Mr. Jones: The hon. Gentleman is correct. We have responded to local authorities' call to have more opportunities to raise their finances locally. That is local accountability, and local electors will want to hold their authorities accountable for their actions. The hon. Gentleman should know that his new authority has more than 4 per cent. extra to spend in the coming financial year than it would have had if it had existed in the present financial year. The hon. Gentleman should do what his electors expect of him and scrutinise whether that authority will apply that extra money to important requirements such as education and care in the community.

    Subsidiarity
    Mr. MacShane: To ask the Secretary of State for Wales what recent discussions he has had with the European Commission on the application of the principle of subsidiarity in Wales. [19379]
    Mr. Hague: None.
    Mr. MacShane: I would like to say that I thank the Secretary of State for his answer, but I am constantly amazed as to why he, as a Yorkshireman from Rotherham, whose parents are valued constituents of mine, is in his particular job. Looking at the talents of the Tory Members representing Wales, however, one can now understand that. If the right hon. Gentleman has visited Europe, he will be aware that every successful European country, and the United States, has a system of government according to the subsidiarity principle, which is much closer to the people who are governed. If it is good enough for America and for other successful economies, why is the Secretary of State—as, of all people, a Yorkshireman, who is so proud of his county—opposed to it for Wales?
    Mr. Hague: I welcome the hon. Member for Rotherham (Mr. MacShane) to Welsh Questions, and I hope that one day his interest in Welsh matters will be as great as mine. However, he has a long way to go before that can possibly happen. He should know, as an hon. Member with great familiarity with the continent of Europe, that it is for member states to decide at what level power should be exercised internally and to decide on their national political arrangements, as was agreed at the conclusion at the Birmingham Council of Ministers. It comes particularly strange from a Labour Member to lecture us on subsidiarity when the Labour party favours giving more power to the institutions of the European Community and reducing this country's freedom of action in Europe by signing things such as the social chapter.
    Mr. Garnier: Does my right hon. Friend agree that the social chapter, which he has just mentioned, is the very matter that exercises people in south Wales so greatly? Surely the imposition of the social chapter, so much

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    beloved by the hon. Member for Rotherham—and Geneva—(Mr. MacShane) is precisely what will destroy jobs in south Wales.
    Mr. Hague: My hon. and learned Friend is quite right: we have seen a considerable flow of investment into south Wales, and into other parts of Wales, in recent months and recent years. Those jobs would not be coming to Wales or to the United Kingdom if we were to impose additional rules, regulations and burdens on businesses in this country.
    Mr. Morgan: Does the Secretary of State agree that subsidiarity is not just about keeping powers away from Brussels, but means passing power across to the people? With his £7 billion budget, he is doing very nicely under the present system. As the organiser last weekend of the first Tory party conference to be held in a telephone kiosk, the one thing that he can always be sure of in British politics is that the people of Wales will reject the Tories.
    Mr. Hague: The hon. Member knows—because he was listening to me talk about it on Thursday night—that my approach is to strengthen, over time, the powers and the role of local government in Wales. That will be a great deal more useful than setting up an additional tier of government, with all the unnecessary expense that that involves.

    Welsh Assembly
    Mr. Jacques Arnold: To ask the Secretary of State for Wales what recent representations he has received on the cost of a Welsh Assembly. [19380]
    Mr. Hague: None.
    Mr. Arnold: I find that answer quite extraordinary. Surely the matter of cost must be quite considerable if we are to have another layer of politicians, bureaucrats and the like. Given that the proponents of a Welsh Assembly propose no taxation by that assembly, how is it to be paid for? Will it be by reducing the amount of money going into Welsh education, the Welsh health service or other important Welsh services? The Opposition cannot have it both ways.
    Mr. Hague: My hon. Friend is right: it is extraordinary. We are waiting for representations from Labour Members about the cost of a Welsh Assembly, about which they have been asked but on which they refuse to comment. Such an assembly would be likely to cost £28 million a year, after the initial £52 million in the first year. The Government could build a district general hospital or two large schools every year with that amount of money. That tells us something about the Labour party's priorities for Wales.
    Mr. Donald Anderson: Is it not more extraordinary that hon. Members representing English seats are ever ready to lecture us—with their limited knowledge of Wales—about the costs of this exercise in democracy? At the same time, they are ready, for example, to swallow without criticism the cost of rail privatisation—in its
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    run-up it will cost over £1 billion a year and thereafter it will cost £850 million a year—but they pour criticism on Wales and the experiment in democracy.
    Mr. Hague: Members from English constituencies, including the hon. Members for Rotherham (Mr. MacShane), for Thurrock (Mr. Mackinlay) and for Southwark and Bermondsey (Mr. Hughes), are welcome to take part in our proceedings at Welsh Question Time. We do not criticise that, but it is time that those who advocate a Welsh Assembly tried at least to be specific about the cost—and there would be a cost. It would be additional to the cost of everything else that Government in Wales are doing and it would be a cost that, as I have said, would be at least the equivalent of a district general hospital each year.

    Welsh Language and Culture
    Mr. Mackinlay: To ask the Secretary of State for Wales what steps he is taking to promote interest in the culture and nation of Wales amongst the Welsh diaspora. [19381]
    Mr. Richards: The Welsh Office continues to support the National Eisteddfod, which remains for Welsh people throughout the world the principal focus for Welsh language and culture.
    We are considering what assistance might now be provided for the teaching of Welsh to young people in the Welsh community in Patagonia.
    My right hon. Friend the Secretary of State for National Heritage is providing £63.8 million in funding this year for S4C. The channel produces high-quality Welsh programmes which are seen throughout the world.
    Mr. Mackinlay: Is there not a strong case for the Secretary of State for Wales to get together with his counterparts from Northern Ireland and Scotland to emphasise throughout the world that the United Kingdom is not England and the occupants of these islands are not necessarily English? Do we not need to promote much more the common Celtic heritage of these islands, abroad and in the United Kingdom?
    We want fewer children from England taking ski trips in Europe and more visiting the beautiful mountains, hills and valleys of Wales, Northern Ireland and Scotland. We should promote places such as Stout Hall in the Gower peninsula, which is rich in value for schoolchildren on field trips. There is much more to be done in promoting our Celtic heritage in the United States and Australia, to bring visitors here and to stop the gravitational pull to the south-east of England and London.
    Mr. Richards: I can assure the hon. Gentleman that all of us in Wales who wish Wales to be promoted throughout the world are doing all we can to ensure that people do visit Wales, and I can assure the hon. Gentleman that the Wales tourist board promotes Wales abroad very effectively.
    Mr. Sykes: Will my hon. Friend ignore the hon. Member for Thurrock (Mr. Mackinlay)? Is it not strange that the hon. Gentleman mentioned the fact that the Welsh are famous abroad but not the fact that the Koreans are

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    coming, with perhaps £1 billion of investment in Wales? Does that not tell us all that we need to know about Wales, and about the social chapter and the minimum wage?
    Mr. Richards: My hon. Friend is right. Wales's record in attracting more inward investment per head of population than the rest of the United Kingdom is second to none. My hon. Friend is also correct in identifying some factors that make Wales so attractive—the absence of the social chapter and the absence of a minimum wage. Another factor is the reform of working practices of trade unions throughout the 1980s, which made the Welsh work force so flexible and attractive to inward investors.
    Mr. Wigley: Does the Minister accept that one of the best flag-carriers of Welsh culture of the highest standard throughout the world is the Welsh National Opera Company, whose future in Wales is now being undermined by the machinations of Cardiff bay, by the opposition of South Glamorgan and by the inability of the Welsh Office to get off its backside and do anything to safeguard its future? If the opera company moves to Birmingham or Bristol, how will the Welsh Office feel about that, and what does that say about safeguarding the excellence of musical heritage in Wales, not only in opera, but in all the performing arts?
    Mr. Richards: The hon. Gentleman is correct. The Welsh National Opera Company is highly acclaimed throughout the world and I am sure that the Arts Council will be well aware of what the hon. Gentleman said about the company's future.

    Assisted Places Scheme
    Mr. Alan W. Williams: To ask the Secretary of State for Wales how much was spent on the assisted places scheme in 1995–96 in Wales; and what is the percentage change in the budget for assisted places in 1996–97. [19382]
    Mr. Richards: Provisional expenditure on the assisted places scheme for 1995–96 is £2,903,500; £3,781,000 has been allocated for the scheme in 1996–97, representing a 22 per cent. increase in provision, to take account of the expansion of the scheme from September 1996.
    Mr. Williams: When our local education authorities are desperately short of funds, and with up to 500 teachers' jobs in Wales under threat, what sense does it make to expand by 22 per cent. the expenditure on the assisted places scheme, which benefits only a tiny minority of children? Where does the scheme stand alongside the Prime Minister's professed ambition of creating a classless society and a nation at ease with itself, when money that should have been allocated to local education authorities is instead being used to subsidise private schools?
    Mr. Richards: The Government's policy is to promote assisted places schemes, because they are popular and effective and offer opportunities to those who cannot afford to pay for private education. I am astonished that the hon. Gentleman should talk of a classless society—especially in connection with education—given that his
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    right hon. and hon. Friends take advantage of Government policies in choosing grant-maintained schools or selective education for their children.
    Mr. Harry Greenway: Does my hon. Friend agree that children are all different from each other, and that diversity of provision is essential if all their differing needs are to be met? Will he attack those who knock the assisted places scheme? They are attacking opportunities for poor children in Wales and throughout the United Kingdom, and they should be aware of that.
    Mr. Richards: My hon. Friend is absolutely right. Diversity of provision is a key part of the Government's education policy, but Labour Members do not want diversity or choice for everyone else's children; they want it only for their own.

    Constitutional Reform
    Mr. Simon Hughes: To ask the Secretary of State for Wales what plans he has for constitutional reform in Wales in the current Parliament. [19383]
    Mr. Hague: None.
    Mr. Hughes: As a far more authentic Welshman than the Secretary of State, may I ask him what overwhelming amount of written support he has received in the Welsh Office for his recently announced reforms of the Welsh Grand Committee? Have letters flooded in saying what a wonderful proposal it is, and that it will change everything for the people of Wales?
    Is the right hon. Gentleman aware that not just people in Wales—and those born and brought up in Wales—but many people throughout the United Kingdom feel strongly that Wales should have proper self-governance? They want that for themselves, and they feel that Wales should have it too. The right hon. Gentleman should take their views into account as much as those of people in the Principality.
    Mr. Hague: I am not sure how many letters I have received about the Welsh Grand Committee, but I know that the proposals were carried in the House by a large majority.
    Mr. Hughes: How many telephone calls?
    Mr. Hague: Quite a few of those as well.
    Wales is benefiting tremendously from the current constitutional arrangements. It benefits in terms of public expenditure per head, and it benefits from being part of a successful and growing United Kingdom economy. I do not think that it would do the people of Wales any favours to create separate and divisive constitutional arrangements. I know that the hon. Gentleman would like a federal United Kingdom within a federal Europe, but I disagree with him on both counts.

    Governance of Wales
    Mr. Whittingdale: To ask the Secretary of State for Wales what recent representations he has received on the governance of Wales. [19384]
    Mr. Gwilym Jones: Various representations have been received.
    Mr. Whittingdale: Does my hon. Friend agree that the governance of Wales is best served by the Government's policy of evolutionary change and that it would certainly not be best served by a Welsh Assembly that would create resentment in England and division throughout the United Kingdom? Does he also agree that the plans for regional committees, assemblies and parliaments throughout the country have everything to do with Labour's attempts to appease its Back Benchers and nothing to do with good governance?
    Mr. Gwilym Jones: I must rush to agree with my hon. Friend. The future of Wales is much more assured within the United Kingdom. Is it not amazing to see what a mess the Opposition have got themselves into on this issue? One will say one thing, while another will say something different. The Leader of the Opposition says that a Welsh Assembly would not be a legislative body. Most notably, the Opposition will consider the possibility of assemblies for the regions of England, subject to referendums; but they will not trust the people of Wales to have any say.
    Mr. Barry Jones: Does the Minister accept that good governance requires good employment prospects in Wales? Will he please give us back our development area status and access to structural funds? Does he know that, in Clwyd, 14,000 people are out of work, and that 2,500 are out of work in my constituency? We have lost out to southern England constituencies, which have taken our development area status. We would like that status to be returned to us in Wales, particularly in Deeside.
    Mr. Gwilym Jones: My right hon. Friend the Secretary of State and I constantly work from the premise that unemployment in Wales is unacceptably high. However, more of Wales is covered by development area status than is any region of the home counties. That is the way that we shall continue to go forward. I would take the hon. Gentleman more seriously if he would reject his party's job-destroying policies.

    Local Government Finance
    Mr. Dafis: To ask the Secretary of State for Wales what recent representations he has received about the effect of the 1996–97 local government financial settlement on educational services throughout Wales. [19386]
    Mr. Hague: I have received various representations. It is for individual local authorities to determine how the resources that are made available to them are allocated between services, including education, in the light of their statutory responsibilities and their perception of local needs and priorities.
    Mr. Dafis: Is the Secretary of State aware that, despite the substantial increases in council tax and the fact that other services are being squeezed to protect education, schools will continue to face serious difficulties in the coming year? For example, there will be a deterioration in the pupil-teacher ratio and a reduction in school services, and schools' resources will be perilously low—in some cases, schools will be in the red. Is it not time to undertake a proper review of education funding in Wales?
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    How is the Welsh Office monitoring the current situation—I am sure that it will receive serious representations on the matter in the next few weeks? Is it not time to lay the firm foundations for a learning society, which will pave the way for success in the future?
    Mr. Hague: The Welsh Office monitors standards in education very closely—and will continue to do so. The hon. Gentleman will know that standards at GCSE and A-level continue to improve and are now at record highs. That is a very important achievement that we want to continue in the future.
    I have given more money to local authorities for the coming year, I have safeguarded provision for capital expenditure on education at £44 million next year—the same amount that we provided last year—and I have allocated £8 million to the popular schools initiative. I expect local authorities to use those resources effectively and well.

    Valleys Programme
    Mr. Hain: To ask the Secretary of State for Wales what assessment he has made of the impact of the valleys programme. [19387]
    Mr. Gwilym Jones: The programme for the valleys has had a major impact on the area. Unemployment in the valleys is now 22.6 per cent. lower than it was in 1988, when the programme began, compared with a fall of 12.5 per cent. in Wales as a whole and of 1.3 per cent. in the United Kingdom.
    Mr. Hain: Those figures simply do not match the reality on the ground. One in three adult men in valley communities are out of work, and many such communities are dying. The Minister and the Government should promote a new, positive programme to attract investment from the M4 corridor to ensure that valley enterprise zones are established which attract investment through subsidising employers who locate in those communities. We must repair the damage caused by Tory neglect, which has seen rising crime, increasing joblessness and social decay. We need a new strategy, or valley communities will die.
    Mr. Jones: The hon. Gentleman does not want to accept the facts. There has been substantially more progress in fighting unemployment in the valleys, even, than in the rest of Wales and progress is far greater in Wales than in the United Kingdom as a whole. We are committed to the valleys programme and, occasionally, even the hon. Gentleman has made a positive contribution on that subject.
    Since December 1994, we have sought to take forward the marketing of 20 exciting sites in order to do what the hon. Gentleman suggests—draw inward investment from the M4 and into the valleys. That does not sit well with the hon. Gentleman and his colleagues who make a career—a life style—out of running down Wales and selling it short at every opportunity. The greatest engine for industrial progress in Wales, the Welsh Development Agency, is constantly rubbished by Opposition Members. What result do they expect from that?

    Theatr Clwyd
    Mr. Hanson: To ask the Secretary of State for Wales what plans he has to hold further discussions with interested parties over the future of Theatr Clwyd. [19388]
    Mr. Richards: My right hon. Friend and I have no plans to hold further discussions with interested parties over the future of Theatr Clwyd.
    Mr. Hanson: In light of the discussions among local authorities in the past week, and the tremendous efforts that they have made to find a solution to the problem, will the Minister agree to release the £1.3 million grant to the local authorities who will determine the future of Theatr Clwyd? If he will not agree to its release, will he lay down in the House this afternoon the conditions that local authorities must meet in order to save that theatre?
    Mr. Richards: Neither my right hon. Friend nor I attended, nor were we privy to, the meetings that local authorities held this week. My right hon. Friend has made the Government's position perfectly clear. Not only has he written off the capital debt of £1.3 million, but—the hon. Gentleman should be aware of this—when the Clwyd county council budget was disaggregated for the forthcoming financial year, Flintshire county council got the £1.5 million portion of that disaggregation that had hitherto gone to Theatr Clwyd. It is now up to the Labour-controlled local authorities to put their hands in their pockets to save Theatr Clwyd—and the hon. Gentleman has more influence with them than I do.

    Nursery School Provision
    Mr. Flynn: To ask the Secretary of State for Wales what percentage of (a) three-year-olds and (b) four-year-olds are in state education in Gwent and in Clwyd. [19389]
    Mr. Richards: At January 1995, 50.4 per cent. of three-year-olds and 93.7 per cent. of four-year-olds were in maintained nursery, primary and special schools in Gwent. The corresponding figures for Clwyd were 64 per cent. and 99.5 per cent.
    Mr. Flynn: Do not those splendid figures prove the effectiveness of local authorities in Wales—almost all of which are Labour-controlled—and support the conclusions of the Welsh Affairs Committee? Even Conservative Members on that Committee agreed that, in respect of Wales alone, nursery vouchers would not be an effective way to improve education. Given the marvellous education provision in Wales, nursery vouchers will be damaging to the system, and wasteful. Does not that prove again the need for a Welsh Assembly and for decisions about Wales to be made in Wales?
    Mr. Richards: Welsh local authorities have an excellent record on nursery education provision, but if the hon. Gentleman has read the Welsh Affairs Committee report, he obviously has not understood it. The report states clearly that the Government's policy on nursery education is to ensure that parents have a choice of provision; they do not have choice in Wales.

  ATTORNEY-GENERAL

    Incitement to Racial Hatred
    Mr. John Marshall: To ask the Attorney-General if he will make a statement about the number of prosecutions for incitement to racial hatred. [19403]
    The Solicitor-General (Sir Derek Spencer): There have been 27 applications for consent to prosecute under part III of the Public Order Act 1986; 22 have been granted, four have been declined and one has been withdrawn.
    Mr. Marshall: Does my right hon. and learned Friend accept that there is widespread concern at the hateful racist activities of Hizb Ut Tahrir on university campuses? When will the proposed meeting take place between him, my hon. Friend the Under-Secretary of State for the Home Department, the hon. Member for Leeds, North-East (Mr. Kirkhope) and the President of the Board of Deputies of British Jews to discuss the issue?
    The Solicitor-General: My hon. Friend is quite right. We take the activities of Hizb Ut Tahrir very seriously. The meeting of which he spoke will occur in the near future, as soon as everybody can be conveniently got together. The date is likely to be shortly after Easter.

    Public Interest Immunity Law
    Mr. Llew Smith: To ask the Attorney-General if he will place in the Library a copy of his submission on behalf of the Government to the consultation on public interest immunity law. [19404]
    The Attorney-General (Sir Nicholas Lyell): I have placed in the Library a copy of my announcement of 26 February on the consultation process, and a circular inviting those responding to take account of a number of specific issues. The consultation period remains open until 1 May.
    Mr. Smith: Will the Secretary of State explain how his new proposals on public interest immunity will avoid circumstances such as those outlined by Lord Justice Scott on page 1240 of his report, where he states that Mr. Moses, the prosecution counsel in the Matrix Churchill trial, was not shown eight key documents by Government Departments and that Mr. Moses commented that, had he known about that information, he
    "would not have gone on with the prosecution"?
    The Attorney-General: The hon. Gentleman will understand that the point he is raising is separate from public interest immunity, on which I have gone out to consultation. It is a matter of discovering documents and bringing them forward. The Government have looked carefully at what Sir Richard Scott said in his report and there is a careful trawl around Departments to see that they understand what is required. Steps had already been taken prior to the report's publication to ensure that that aspect can be dealt with more effectively in future.
    Mr. Peter Ainsworth: Is my right hon. and learned Friend aware that there is still a lot of misunderstanding about the use of public interest immunity certificates? Is not the concept in wide and almost daily use in both civil and criminal law? What measures will my right hon. and learned Friend take to ensure a better understanding of the concept of public interest immunity?
    The Attorney-General: My hon. Friend raises an important point. One good effect of the Scott inquiry, and of the discussion about it, has been that the profile has been raised of something that criminal practitioners know is—month in, month out, week in, week out—an aspect of criminal law. There is a public interest in the confidentiality of certain documents, which need not necessarily be Government documents. They might concern child abuse cases and perhaps relate to the National Society for the Prevention of Cruelty to Children, or the work of regulators. In the end, a decision is required by a judge, if necessary, as to whether such documents should be disclosed for the purposes of a trial. I am grateful to my hon. Friend for the chance to elaborate on that point.
    Mr. Alex Carlile: Does the Attorney-General agree, at least provisionally, with Sir Richard Scott's recommendation that, where public interest immunity arises in criminal cases, it is desirable wherever possible that the counsel who argues for PII should be different from the prosecuting counsel, to ensure no risk of a conflict of interest?
    The Attorney-General: We shall give careful thought to that aspect. The hon. and learned Gentleman will know from his own experience that no conflict arises in a high proportion of cases. Public interest immunity is frequently and perfectly properly dealt with by the prosecuting counsel, but there are occasions when a conflict of interests can arise, when it is desirable to instruct separate counsel. We shall focus on those points as part of the consultation.
    Mr. Batiste: Is not it clear that, in many cases in which serious drug dealers are prosecuted, the evidence is based on information from informants? Unless there is some system of public interest immunity, evidence from informants would dry up and many serious criminals would walk free. Will my right hon. and learned Friend ensure that, whatever the outcome of the consultation, the evidence of informants in sensitive cases can be protected by immunity?
    The Attorney-General: My hon. Friend echoes the important point made by the Master of the Rolls in an intervention in the debate a fortnight or so ago. The courts have been astute to concentrate on the protection of informants—not merely down the decades, but down the centuries—for precisely the reason that my hon. Friend gave. Otherwise, the supply of informants, which is essential to the bringing to justice of often the most serious criminals—not least those concerned with drug dealing—would dry up.
    Mr. Hoon: Now that the Attorney-General has had the opportunity to read, and reflect on, the trenchant and detailed criticisms of his actions and advice in the Scott
    18
    report's analysis of his handling of public interest immunity certificates, would he—if faced with similar circumstances—act the same way and give the same advice again?
    The Attorney-General: As a lawyer himself, the hon. Gentleman will know that it is the duty of the Law Officers, including the Attorney-General, to give advice in accordance with the law as it is understood at the time. That is undoubtedly what I did. The hon. Gentleman will have read the debate in the House of Lords, where no fewer than five Law Lords endorsed the advice that I gave.
    Ms Eagle: To ask the Attorney-General what representations he has received urging reform in the use of public interest immunity. [19405]
    The Attorney-General: I refer the hon. Lady to the reply I gave a few moments ago to the hon. Member for Blaenau Gwent (Mr. Smith). The consultation period is still at a relatively early stage. It remains open until 1 May.
    Ms Eagle: Can the Attorney-General explain why, if he accepts none of the criticisms in Lord Justice Scott's report, he is now going out to consultation to change a system that he claims he operated correctly and which is itself correct?
    The Attorney-General: As I am sure the hon. Lady will realise, because I am sure she has read the report carefully—[Interruption.] I am not sure whether she is saying yes or no.
    Ms Eagle indicated assent.
    The Attorney-General: So she will realise that the report makes a number of serious suggestions as to how the law might operate in future. That is what we are going out to consultation on, with particular focus on the points I have mentioned in the document which I have today placed in the Library.
    Mr. Leigh: May I urge my right hon. and learned Friend to tread carefully when considering calls for reform of the law? After all, judges made this law, and trial judges decide whether to use the certificates, which can affect Government and non-Government alike. It is therefore far wiser to allow the judges to consider how the law should be reformed than to involve the Government at all.
    The Attorney-General: My hon. Friend reflects a point made by Sir Richard Scott in his report. He said that he did not think that the time was ripe at the moment for statutory intervention in this area. This is judge-made law; as the House will know, the law has already moved on, in that the House of Lords gave revised guidance in the case of ex parte Wiley in the summer of 1994. That is the law that we operate at the moment. It is against that judge-made legal background that we shall consider how the Government should approach the subject for the future.
    Mr. Dalyell: Whereas judges may make speeches in the House of Lords and Ministers may trawl to their hearts' content around Government Departments, can the

    19
    House of Commons be bluntly and candidly told why crucial information in the hands of Ministers was not passed on to Alan Moses?
    The Attorney-General: That was one of the important matters for which the Scott report was set up—the hon. Gentleman will have read for himself the points about it made in the report. He mentions the trawl around Departments and the need to identify in proper time the most relevant documents. The lessons are there to be learnt about that aspect—that is one of the benefits of a very detailed report.

    Benefit Fraud
    Mr. Jenkin: To ask the Attorney-General if he will make a statement on his Department's role in prosecuting benefit fraud cases. [19406]
    The Solicitor-General: The vast majority of benefit fraud cases are investigated by the Benefits Agency and prosecuted by the Department answerable to my right hon. Friend the Secretary of State for Social Security, or are investigated and prosecuted by a local authority. Some of the more serious cases are, however, investigated by the police and prosecuted by the Crown Prosecution Service.
    Mr. Jenkin: Is it of concern to my hon. and learned Friend, as it is to the Social Security Committee, to learn that, despite widespread fraud in the benefits system, so few people are prosecuted? Will he undertake to discuss with the Social Security Secretary and relevant Departments how the number of successful prosecutions can be increased, so that people get the message that cheating the system means ending up in gaol or being heavily fined?
    The Solicitor-General: I appreciate my hon. Friend's point, but he ought to remember that the gravity of some of these cases is much more important that their total number. The cases that the Crown Prosecution Service deals with, although few in number, are very important and have a deterrent effect that outweighs their number. These are usually offences of theft or conspiracy to defraud, and the courts, without exception, impose significant sentences of imprisonment. That sends out a clear, unambiguous message to anyone minded to cheat the system.

    Public Interest Immunity Law
    Mr. Hain: To ask the Attorney-General if he will make a progress statement about his consultation on public interest immunity law. [19407]
    The Attorney-General: The Government will give careful consideration to all views received in response to the consultation.
    Mr. Hain: Is not the truth that—as the Attorney-General's answers this afternoon have so far
    20
    shown—despite Scott's stinging criticism of his legal incompetence and abuses of public interest immunity law, and despite the huge constitutional issues exposed by the report, all he and the Government are doing about the report is a long grass job?
    The Attorney-General: It is clear that the hon. Gentleman has spent little or no time carefully reading the report.
    Sir Ivan Lawrence: Will my right hon. and learned Friend be a little less modest and self-restrained? Is it not absolutely clear that the Law Lords, who are higher than Lord Justice Scott, said that the Attorney-General's advice was totally right and that Lord Justice Scott was totally wrong?
    The Attorney-General: I am grateful to my hon. and learned Friend. Lawyers can disagree, but my advice— as I have often told the House—was carefully researched and has been approved at the highest level by all the Law Lords who spoke in the debate and by the Master of the Rolls. I rest my case.

    Judiciary
    Mr. Simon Hughes: To ask the Attorney-General what steps he is taking to improve communication between himself and his officials and the judiciary. [19408]
    The Attorney-General: I and my officials communicate with the judiciary from time to time about a range of matters. The way in which such communications are conducted varies according to the circumstances.
    Mr. Hughes: In the light of the failure of the Attorney-General's office to pass on, to the judge and elsewhere, the representations made by the now Deputy Prime Minister, will the Attorney-General tell the House whether, from now on, he will guarantee that any representations made to him on behalf of any Minister or any Member of the House in legal proceedings in which the Government have an interest or a role to play will be passed on, without delay, to the judge?
    The Attorney-General: Once again, the hon. Gentleman, who also is a lawyer, should have read the report more carefully. The letters in question were immediately passed by my office to the Treasury Solicitors' Department. The principal method used by me to pass on my right hon. Friend's concerns was the public interest immunity certificate itself, which was read in open court, and was specifically noted and followed carefully by the judge, who studied every document and decided what should and should not be disclosed.

Point of Order
3.31 pm
Mr. Tam Dalyell: On a point of order, Madam Speaker. This afternoon we seem to have fallen among lawyers, of whom I am not one. Is it not a tradition of the House that those occupying the great positions of Attorney-General and Solicitor-General have special obligations to the House, outwith party politics, and one of those obligations is to give direct and factual answers to questions? You will have noticed that, on Question 29, asked by my hon. Friend the Member for Wallasey (Ms Eagle), no direct answer was forthcoming, either to the original question or to the supplementary question. Is there nothing you can do about these lawyers?
Madam Speaker: The hon. Gentleman has been a Member of the House long enough to know that—whether it is the Attorney-General, the Solicitor-General or any Minister of the Crown—they respond to questions as they think fit. It is not for the Speaker to make further comments on the answers given by Ministers of the Crown.
Mr. Spencer Batiste: Further to that point of order, Madam Speaker.
Madam Speaker: It cannot be a further point of order on that issue, because there is nothing more I can do about it.
Mr. Batiste: It is a separate point of order on the same issue, Madam Speaker. Have you noticed that, on many occasions in the House and outside, laymen who do not like the advice they get from lawyers often complain about it? Would it not enhance the proceedings of the House if the Law Officers were not criticised for party political reasons?
Madam Speaker: That is a very reasonable comment.

Opposition Day
[7TH ALLOTTED DAY]
Opposition Day

  Employment Rights
  Madam Speaker: I have selected the amendment standing in the name of the Prime Minister.
  3.32 pm
  Mr. Michael Meacher: I beg to move,
  That this House, noting how widespread job insecurity has become in Britain and the damage this has done to economic performance, calls on the Government not to proceed with the removal of the right of appeal to an industrial tribunal for employees in small firms.
  The background to the debate is quite clear. On 7 March, it became known that the Deputy Prime Minister was proposing the removal of all employment rights from employees of small businesses. A leaked letter from the Secretary of State for Trade and Industry—the right hon. Gentleman did not oppose the proposal as unreasonable or unjust—queried whether it was sensible to proceed before obtaining the Law Officers' advice, presumably because the proposal almost certainly breaches several European directives.
  Although it was hastily decided that the Deputy Prime Minister would not include the proposal in a deregulation package for the small business conference in London a week ago, Downing street later confirmed that the move was still under active consideration.
  A press report that appeared in The Times on 12 March put the episode in context. One passage reads:
  "But this is the tip of the iceberg. Despite John Major's coyness last week in the Commons and his diplomatic silence yesterday at the small business conference in London, Downing Street policy advisers and senior ministers are studying recommendations for a far wider assault on legislation that dates back to the 1960s and 1970s."
  The article refers to a recent pamphlet prepared by somebody called Warwick Lightfoot, who was adviser to the Prime Minister when he was Chancellor of the Exchequer. Apparently it has been widely circulated. I obtained a copy of the pamphlet. The introduction reads:
  "The piecemeal changes to legislation made over the last 15 years are not enough. It is time now to remove the over-arching framework of employment protection legislation on redundancy compensation and unfair dismissal. The existing regulations, though lighter than they were, still distort employers' decisions, reduce economic activity and raise unemployment."
  When the Prime Minister was challenged last week to the effect that the proposal would create a hire-and-fire mentality among employers, he replied:
  "We are encouraging a hire mentality."—[Official Report, 7 March 1996; Vol. 273, c. 450.]
  That is not what the Lightfoot document states, from which I shall quote again. The relevant passage states:
  "The unfair dismissal and redundancy legislation provides workers with extensive legal protection from routine managerial decisions, making it more complicated and expensive to dismiss workers who are either incompetent or not needed."
  That is what the Deputy Prime Minister's package is all about.
  If there is any doubt, the article in The Times makes the position clear. The article states that the Prime Minister and the Downing street policy unit

  23
  "swiftly concluded … that it would be politically impossible to try to sweep away overnight the vast body of law covering workplace rights. Instead, the Government is understood to be intent on adopting the tactics used by Margaret Thatcher in her assault on trade union rights in the 1980s. This involved five key Acts of Parliament between 1980 and 1990, gradually chipping away at the unions' legal immunities. Mr. Heseltine's suggestion of starting with small firms was the first step."
  There we have it. Seventeen years of Tory Government have produced a Britain where employees work longer and more unsocial hours than workers in any other country in the European Union.
  Mr. Michael Fabricant: Does the hon. Gentleman accept that people are at least in work in this country? Is he aware that unemployment has inexorably risen in France and Germany, whereas, apart from the blip in the past month, there has been lower unemployment in this country for the past 29 months, contrary to the European trend? Does he welcome that?
  Mr. Meacher: The hon. Gentleman fails to note that what he calls a small blip may turn out to be a very embarrassing rise.
  Mr. Fabricant: We do not know.
  Mr. Meacher: No, we do not know, but there are good reasons to expect it will be the case. If one considers that there have been 28 changes in the unemployment count, I suspect that the unemployment figure in Britain is probably not 2.5 million but closer to 3 million.
  Mr. Fabricant: It is going down.
  Mr. Meacher: No, it is going up.
  In particular, the hon. Gentleman should consider the fact that, in the past three years, unemployment has decreased in this country only because the Government were forced, kicking and screaming, out of the exchange rate mechanism in 1992, which allowed a reduction—[Interruption.] I am glad that the hon. Member for Mid-Staffordshire (Mr. Fabricant) is nodding his assent; perhaps we have taught him something. That event allowed an interest rate cut, from about 15 per cent. to 6 per cent. If that had not happened, unemployment would still be nudging 3 million, even on the Government's figures; so let us hear no more about that matter.
  In our country, after 17 years, employees have less protection—
  Mr. Bernard Jenkin: Will the hon. Gentleman give way?
  Mr. Meacher: No, no at the moment.
  Employees have less protection against unfair dismissal and fewer rights in redundancy than in any other European country.
  Mr. Jenkin: Will the hon. Gentleman give way?
  Mr. Meacher: I shall in a moment.
  24
  Seventeen years of Tory Government have made Britain the only country in Europe without legal pay protection for the poorest workers, without legal limits to working hours and in which discrimination against part-time workers in relation to pay and employment rights is legal. None of that is good enough for today's Tory party: it now wants the systemic destruction of employment rights, to move this country down towards the sweatshop economies of Latin America or the far east—[Interruption.] The hon. Member for Mid-Staffordshire may not like the reference to the direction in which his Government have been taking us for 17 years, but that is the clear implication of their policies. He is rather squeamish. Ministers are much more willing to admit that that is the type of economy they want.
  Mr. Jenkin: Is the hon. Gentleman under the impression that none of our European partners provides some exemptions from employment legislation for smaller businesses?
  Mr. Meacher: The latest working time directive?
  Mr. Jenkin: No.
  Mr. Meacher: I am sorry; I was distracted and did not hear what the hon. Gentleman said.
  Mr. Jenkin: Is the hon. Gentleman under the impression that none of our European partners provides exemptions for smaller businesses from some obligations under employment law?
  Mr. Meacher: Of course; if one examines the European directives, contrary to the impression Ministers regularly give, one sees that they provide a great range of flexibility and are nowhere near as tight and limiting as is often said. The directives take account of the need for small businesses to succeed and, I suspect, small businesses succeed a great deal better on the continent than they do here. This policy is so objectionable not merely because it is grossly arbitrary and discriminates against up to half the work force, but because it patently does not work.
  Our case against the Government is that they are now trying to ram down policies into the economy that have demonstrably failed. Ministers never tire of saying that deregulated labour markets are the only way in which to achieve steady improvements in economic growth, competitiveness and job creation, and the Prime Minister never misses an opportunity to lecture European leaders about the superiority of the Government's deregulation model.
  Mr. Jenkin: Hear, hear.
  Mr. Meacher: I note that the hon. Member for Colchester, North (Mr. Jenkin) strongly supports that model, but perhaps he would like to consider its effects. We have had 17 years of deregulated labour markets, flexible and casualised working, deunionisation and the steady chipping away of employment rights—[Interruption.] Conservative Members are falling over themselves to express their support of the policies, but what has been the result? The relevant comparison is with other members of the Group of Seven leading

  25
  industrialised countries. On that basis, since 1980, we have had the lowest growth of GDP of any of those seven countries. We have had the worst record in competitiveness—indeed, a 9 per cent. loss in competitiveness since 1980 in terms of export volume relative to world trade—and the second biggest increase in unemployment.
  Mr. Fabricant: Will the hon. Gentleman give way?
  Mr. Meacher: No, I will not give way to the hon. Gentleman.
  That is a record of which Ministers should be ashamed. It is certainly not a performance to preach about to other European leaders or to encourage them to copy.
  The Deputy Prime Minister—he is always at it—has been banging on again about making Britain the enterprise capital of Europe. It is essentially his policy of deregulation in the past decade that has made Britain the competitive backwater of Europe. [HON. MEMBERS: "Come off it."] Conservative Members simply do not like to take account of the facts. The Government's policies are intended to produce growth, competitiveness and jobs. On the OECD evidence, they have produced none of those things.
  Mr. Fabricant: Will the hon. Gentleman give way?
  Mr. Anthony Coombs: Will the hon. Gentleman give way?
  Mr. Meacher: I want to move on.
  Ministers constantly claim that the only way to increase jobs is through more flexible labour markets, lower wages, deskilling and cutting employment rights. They have been doing that for 17 years, and what has happened? There are fewer people in employment in Britain today than in 1979. More than 1 million fewer people are in employment in Britain today than the day the Prime Minister entered Downing street.
  Mr. Fabricant: What about the rest of Europe?
  Mr. Meacher: We are not talking about Europe. We are talking about Britain. This policy is expected to work in Britain. It has worked in reverse. There is higher unemployment than in 1979 and substantially higher unemployment than in 1990, even after the fall of the past two and a half years.
  Mr. Fabricant rose—
  Mr. Meacher: The hon. Gentleman can keep bouncing up and down if he wishes—perhaps that is where his skill lies—but I shall not give way, given the kind of points that he makes.
  There has been a huge switch from full-time to part-time working. If we count two part-time workers as the equivalent of one full-time worker—that is roughly right—the rise in part-time employment since 1979 compensates only for less than a quarter of the loss of full-time jobs. In terms of full-time equivalents—which is probably the fairest comparison to make—the number of people in employment in Britain has dropped by 2 million since 1979. If that is a record of which this deregulating Government are proud, perhaps those who preach flexibility should be made to suffer it.
  Mr. Anthony Coombs: Will the hon. Gentleman answer one question? Which major country in Europe has the greatest proportion of its population of working age in work?
  Mr. Meacher: The fact is that if one looks—[Interruption.] Perhaps I could just answer. The work force in employment has fallen by 2 million in full-time equivalents since 1979.I do not believe, although I do not have the figures to hand, that any other major European country has a worse performance than that.
  One of the consequences of the deregulated Tory Britain has been that, at the same time as more and more people have no job at all, other people have to work more and more excessive hours. Britain now accounts for half of all the employees in the European Union who regularly work more than 48 hours a week. Not only is it absurd to have so many employees overworked, some dangerously so, while 2.25 million people have no work at all, but it is extremely destructive of jobs.
  The excess over 48 hours worked by employees totals almost 1.25 million basic working weeks of 39 hours. That could create up to 1.25 million more full-time jobs. Ministers are now gearing up for another major round of deregulation which has done so much damage in creating the mass unemployment we already have.
  Mr. Graham Riddick: The hon. Gentleman will be aware of the ruling by the Advocate General last week on the working time directive. Who should take those decisions, the European Court or this House?
  Mr. Meacher: The fact is that the Conservative party supported the European Communities Act 1972. The only reason why the matter went to the European Court was that the British Government challenged the view that the Commission was right to advance it under health and safety legislation. The Government wished the matter to be advanced either under article 100 or article 118 so that the veto would operate. As we now know from the Advocate General—I suspect that that view will be followed by the Court—the Commission was perfectly within its rights in advancing the matter under health and safety legislation. Working more than 48 hours a week—sometimes up to 60 hours or even more—is clearly a health and safety issue.
  Mr. Denis MacShane: Does my hon. Friend agree that the 48-hour directive is a tremendous blow for family life? The institution that suffers most from the excessively long hours that men and women are expected to work is the family. More and more, children never see their parents for quality time, or any time at all.
  Mr. Meacher: That is an important issue. There is no doubt—I had not intended to mention this, but it is an important issue—that increasing strains and pressures are imposed on social and family life as a result of deregulation and the requirement, which employees feel that they cannot resist, to work excessive hours of overtime. That is an important issue and although it is not part of the economic calculus, it needs to be taken into account.
  Mr. Patrick Nicholls: Will the hon. Gentleman give way?
  Mr. Meacher: No, because I want to make progress.

  27
  The third claim constantly made by Ministers is that social costs are too high in Britain and that burdens on business must be reduced if more jobs are to be created. There are several things wrong with that argument. Britain does not have high social costs. In terms of taxes and social security as a proportion of gross national product, Britain is ninth lowest of the 11 leading industrial countries. From figures produced by the Organisation for Economic Co-operation and Development, it is clearly not the case that the lower the tax take, the lower the level of unemployment; if anything, it is the reverse.
  If social expenditure is reduced and private incomes are increased, at least for the highest paid, as has happened in Britain over the past decade, it matters a great deal where that extra private income is spent—whether on yachts or on investment in new technology. All that one can say is that, in Tory Britain, it must have gone predominantly on yachts because it has certainly not gone on investment in new technology or on research and development, which has fallen in real terms under this Government. Manufacturing investment is no higher today at constant prices than it was in 1979.
  Mr. Fabricant: Will the hon. Gentleman give way?
  Mr. Meacher: Out of kindness to the hon. Gentleman, I should not expose him to a further opportunity to ask questions.
  The real irony in the Government's denunciation of the costs falling on businesses is that those burdensome costs do not come, in general, from the employment rights that the Government are now so determined to sweep away—whether health and safety protections, anti-discrimination measures or unfair dismissal rights. The main cost burdens now afflicting small businesses come from a quite different source.
  A report to the national small business conference in London last week summarised the views of small business men; they had been collected from a range of regional meetings across the country. The report states:
  "Most of the costs associated with employing somebody are no longer met by the state and retrospective legislation places new burdens on individual employers. This is obviously acting as a disincentive for small businesses to take on an extra person. Things like statutory sick pay, maternity pay and redundancy pay were thought to be a particularly crippling burden on small businesses."
  The fact is that all the statutory impositions about which small business men are complaining have come from the Government. The Statutory Sick Pay Act 1994 transferred the whole cost of statutory sick pay to employers. In 1987, the administration of statutory maternity pay was transferred to employers. It is true that, at first, those costs were reimbursed in full, but from 1994 that was reduced to 92 per cent. It was the same with redundancy payments—originally employers were able to claim substantial rebates from the redundancy fund, but in 1989 all the rebates were abolished. The problem is not the employees; it is not employment rights; it is Government-imposed burdens. That problem lies with Conservative Members.
  It is a bit rich that, at a time when the Government propose to take away protection from employees of small firms—ostensibly to ease the pressures on them—they are
  28
  also proposing to add to the responsibilities and burdens of small firms under the proposals in the Asylum and Immigration Bill. I do not know whether the Government properly considered the impact of such measures on small businesses. Instead of pointing a finger at employees as the cause of financial and administrative burdens on small businesses, they might consider pointing it at themselves, because that is where the problem lies.
  Mr. Nicholls rose—
  Mr. Meacher: The hon. Gentleman is nothing if not persistent. I doubt whether what he wants to say is relevant, but I shall give way to him.
  Mr. Nicholls: The hon. Gentleman is nothing if not always courteous. I do not want to misrepresent him— I do not need to—but is he seriously suggesting that no one should work more than 48 hours a week? Is he seriously trying to tell the House that he does not work more than 48 hours a week? Has he any conception of what self-employed people, who actually provide jobs for employees, will think when they hear that those employees must not be allowed to work more than 48 hours a week, when they will be working 60, 70, 80, 90 or 100 hours a week? Is it not about time that the hon. Gentleman injected some reality into his remarks?
  Mr. Meacher: The hon. Gentleman is losing his touch. A whole range of exclusions are written into the directive—
  Mr. Nicholls: Ah!
  Mr. Meacher: Perhaps that is a great revelation for the hon. Gentleman, although one would have thought that he would actually look up the details of the directive before intervening. I can inform him that it excludes many public service workers such as police, ambulance staff, nurses, doctors, fire fighters and, perhaps surprisingly, lorry drivers. In addition—this is crucial—it does not impose a limit of 48 hours; it says that an employer cannot force an employee to work more than 48 hours. Of course, that employee is perfectly able to work more than 48 hours if he so agrees. That is extremely important. Perhaps we should examine the facts rather than indulge in a great paroxysm based on absolutely nothing.
  The tragedy for Britain is that this Government have ruthlessly pursued the wrong model for economic success. That is the essential point that I want to make. Low wages and skills, few or no employment rights, de-unionisation and casualised working do not produce efficiency, productivity or jobs; they produce fear and economic uncertainty, which undermine long-term commitments. That is shown by the damage that has been done to the housing market and to manufacturing investment.
  I am glad that the President of the Board of Trade is here, because it was he who recently cynically observed that job insecurity was a state of mind. It is now a plague that affects all regions, all classes of workers and almost all workplaces. Economic success and competitiveness do not come from robbing people of their employment rights and security but from strong motivation, pride in the job, up-to-date skills, high morale and mutual, long-term commitment between employer and employee. All those are undermined by an insecure labour market.

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  This Government have become the Burger King Government, with their obsessive drive for low wages, no rights and anti-unionism. The Tories have become the party of social devaluation. Ministers cannot see—or perhaps they refuse to see—that any advantage that could be derived from low wages is more than outweighed by poorer education, inadequate infrastructure and lower levels of skills and capital investment. They cannot understand that Britain's low productivity is, in part, the result of long working hours, poor employment conditions, high staff turnover, high absenteeism and poor training.
  I remind the President of the Board of Trade of one his predecessors who said:
  "We believe that decent conditions make for industrial efficiency and increase rather than decrease competitive power."
  He also argued that, without proper regulation,
  "the good employer is undercut by the bad and the bad employer is undercut by the worst."
  That was Winston Churchill, who must be turning in his grave with revulsion at the dogma of today's Tory party.
  Finally, although I suspect that this least concerns the Conservative party, a wholesale removal of employment rights will perpetuate and deepen injustice in the workplace. Cases involving the growing exploitation of part-time and agency workers have flooded into my office, as I am sure they have to that of my hon. Friend the Member for Makerfield (Mr. McCartney). I shall mention some of them.
  A low-paid employee was forced to sign away his employment rights in return for a succession of temporary, three-month contracts. A skilled draughtsman was required by his employment agency to accept, in advance, legal liability for anything that he did when on work placement. A citizens advice bureau in the Chilterns reported to me the case of a young man who had been working for his employer for 18 months and who was working seven days a week, with no time off allowed. A citizens advice bureau in the south reported the case of a man who was dismissed when he asked his employer for a written statement of his terms and conditions of employment and raised health and safety conditions in the workplace.
  That is not efficient management but Gradgrind economics. It is also dangerous to employees and to the public. In the case of employees, the Department of Health commissioned a stress guide for employers to examine the effects of working excessively long hours in a week. The guide concluded:
  "Working more than 48 hours per week doubles the risk of coronary heart disease."
  What did the Government do? They suppressed that guide because they found its results embarrassing.
  Working excessive hours is also dangerous to the public. Health and safety information bulletin No. 169, which reported on the Clapham rail disaster that killed 34 people, found that, in the three months preceding that accident, a quarter of the work force had worked seven days every week and another third had worked 13 days out of 14. It found that the technician who made the fatal errors had had just one day off in the three months leading up the accident. Such levels of overtime and the mental and emotional stress that they produce are not confined to the railways, but extend to many other areas of work. An act of deliberate policy to extend such long hours to yet more areas of employment would be sheer madness.
  30
  The leaked letter from the President of the Board of Trade has revealed what the Government would do if the electorate gave them another chance. The wholesale removal of employment rights would not make Britain competitive or create jobs, it would merely generate even more widespread insecurity and greater injustices. I believe that the House should throw out that cock-eyed plan even before the electorate throw out the obsessional Government who produced it.
  4.5 pm
  The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang): I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof:
  'recognises the vital contributions of small firms to economic and employment growth, and supports the Government's policies to minimise legislative burdens on this sector while maintaining a fair balance with the rights of employees.'.
  The best that can be said for the speech of the hon. Member for Oldham, West (Mr. Meacher) is that it matched the Opposition's motion for today's debate: it was completely detached from reality. The motion talks of "small firms", "economic performance" and "job insecurity". Let me say something about each of those before talking about industrial tribunals, to which the motion also refers.
  First, small firms are an essential part of our economy, and one of the great economic successes of the Government. There are now some 3.7 million firms in this country, of which 97 per cent. employ fewer than 20 people. That is well over a million more than existed under the previous Labour Government, and they are providing many more jobs. In addition, the numbers in self-employment have risen by more than 75 per cent. since 1979, and the small firms sector has grown more rapidly than in any other country. So small business is now very big business.
  Unlike the last Labour Government, however, who oppressed and persecuted all businesses, large and small, with high taxes, interference and controls, incompetent management of the economy and appalling industrial relations, the Government are committed to working with small firms to set out a policy framework which will take them into the 21st century in an era of low inflation, low taxes, excellent industrial relations and the prospect of sustainable growth. We are listening to what they say they need, and we are doing things to help them.
  Mr. Ian McCartney: Would the right hon. Gentleman care comment on the fact that, since the general election, 141 small businesses have closed each and every day?
  Mr. Lang: Of course small businesses close. It has always been difficult to guarantee their survival rate, but the point is that there has been a net expansion in their number. There are now a million more small businesses than there were when the Labour Government were in office.
  In recent months, we have undertaken the most extensive consultation exercise with small firms in memory in the "Your Business Matters" conference programme. We have already announced a number of measures to help address the concerns that they have raised. On late payment, we announced measures to

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  improve payment performance in both the public and private sectors, including league tables for Government Departments. We also announced our intention to consult again on whether companies should publish their payment performance as well as policy.
  We renewed our commitment to fight red tape with fairer enforcement of good regulation and measures to give businesses a right of appeal against judgments of enforcement officers. We are looking at substantially reducing the bureaucracy surrounding taxation—I might add that taxation is now down from 42p in the pound, as it was under Labour, to 24p. We have the highest VAT threshold in the European Union at £47,000.
  Mr. MacShane: Is the right hon. Gentleman aware that the first schedule in the new self-assessment system that the Government propose to introduce will contain 151 questions for answer, and that the eight succeeding schedules contain more complicated forms than those compiled by any other country? With only 24 hours in the day, how on earth will the small business man keep up with that form filling for the wretched Government?
  Mr. Lang: The hon. Gentleman has brought me exactly to my next point: at our small business conference last week, we announced our intentions to streamline the taxation and the insurance systems. We announced a major review of all the Government support schemes for business to make them simpler and easier to understand, and we announced a number of further measures of assistance. We are also completing the roll-out of business links.
  Mr. Meacher: One notes that all the answers that the right hon. Gentleman gives are about future prospects. The Government have been in power for 17 years—and it is the consequences of those 17 years that small business men complained about bitterly at last Monday's conference. What are the Government going to do about the matter that concerns small businesses most: transferring the financial and administrative burdens of statutory sick pay, statutory maternity pay and statutory redundancy pay on to their shoulders?
  Mr. Lang: We announced further measures to that end last week. We have been trying to simplify and to streamline the burdens of handling national insurance, PAYE, VAT and the other administrative burdens that small businesses face. If the hon. Gentleman had come to one of our conferences, he would have been aware that that is happening, and that small businesses are welcoming it.
  As I was saying, the Government are also completing the roll-out of business links: the network of one-stop shops providing a range of valuable and relevant advice to small firms—small firms that are now consulting business links at a rate of almost 5,000 a week and expressing a consistently high satisfaction rating in all our early surveys of business links' efficiency. We are now carefully considering a number of further points to emerge from our small firms conferences, and a more detailed Government response will follow in June.
  As a result of these policies, a higher proportion of the population is in employment in the United Kingdom than in almost any other European Union country—
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  unemployment is well below the average, and there is much less youth unemployment and long-term unemployment. Employment has been rising for more than two years—rising for men, rising for women, rising for temporary and for permanent jobs, rising for all ages, rising for full-time and for part-time work, and rising in almost all areas of the country.
  It is a great pity that the hon. Member for Oldham, West could not recognise and welcome that dramatic fact—it is something that no Labour Government have ever experienced. There are 600,000 more people in work now than at the end of the recession, and it is about time the Opposition parties came into the real world and recognised that fact.
  Mr. Fabricant: Will my right hon. Friend confirm that, despite what the hon. Member for Oldham, West (Mr. Meacher) said, this country has the lowest rate of corporation tax in Europe? Therefore, does that not show that there is a high correlation between low corporation tax and high employment?
  Mr. Lang: My hon. Friend is absolutely right to draw attention to that fact, and I always discount what the hon. Member for Oldham, West says. After all, in The Times in July 1989, he said:
  "The Government is incapable of cutting inflation without pushing up unemployment."
  If the hon. Gentleman looks at the figures for the past three or four years, he will see what a dramatic fall there has been both in inflation and in unemployment. At the same time—over the past three or four years—we have seen the longest period of low inflation for 50 years, and the lowest mortgage rates for a generation.
  Mr. Ken Eastham rose—
  Mr. Lang: I shall not give way to the hon. Gentleman, because I wish to make some progress.
  We are the first choice in Europe for foreign investment, and we are exporting more per head than Japan or the United States. This is good news for all businesses—particularly for small businesses—and for those who work in them. It arises because the Government have taken the hard decisions to create the stable and sustainable economic conditions in which the economy can expand.
  One of those conditions is the atmosphere of vastly improved industrial relations and a flexible labour market. In the past, the Government have been too quick to play the part of nanny—and it is quite clear from the hon. Member for Oldham, West's speech today that he is keen to resume that role. We believe that, given the right conditions, employers and employees can be encouraged to make the best decisions themselves, without Government interference.
  Since 1980, we have introduced major legislation to free the labour market: employers have freedom to manage their businesses according to their circumstances and their needs; union monopoly power has been reduced and individual choice has been promoted; and there is now greater democracy in trade union affairs. The Government's policies have transformed industrial relations. No longer do we invite ridicule as the sick man of Europe.

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  Hon. Members will remember the 1979 winter of discontent, when 29.5 million days were lost through strikes. Compare that with what we have now: on average, only 37 working days per 1,000 employees have been lost as a result of strikes in recent years. That is the lowest figure since records began more than a century ago. It has been achieved by managers reclaiming their right to manage, by ordinary workers standing up against union power, and by the Government creating the right conditions.
  Mr. Anthony Coombs: In contrast to the drivel talked by the hon. Member for Oldham, West (Mr. Meacher) about the competitiveness of the United Kingdom, will my right hon. Friend remind the House that the President of the German equivalent of the CBI recently said that the British economy is the best placed in Europe to deal with the challenge of global competitiveness? Does that not illustrate the revolution in competitiveness that has happened under Conservative Governments?
  Mr. Lang: My hon. Friend is right. As the hon. Member for Oldham, West also mentioned Germany, let me quote the chairman of the German equivalent of the CBI:
  "We have too rigid labour laws. We have too high social costs and taxes. We work the shortest working week in Europe. The German government spends 50 per cent. of GDP as opposed to 42 per cent. in Britain. No wonder we have a problem."
  Employees value their new-found freedom from intimidation. The show of hands at mass meetings is a distant memory. Secondary picketing has been banned. Closed shop practices are unenforceable. We have yet to hear, and we did not hear today, a clear undertaking by the Labour party not to bring back those terrible scourges.
  Individual employment rights have also undergone major changes. We have progressively taken steps to reduce the weight of legislation. We have ensured that tribunals take account of an employer's size and administrative resources in deciding whether a dismissal was unfair. We have given employers greater freedom in redundancy dismissals, while ensuring that employees' rights are not compromised.
  We have exempted small firms from some onerous requirements in relation to maternity absence, from the new disability discrimination employment provisions, and from the notification of disciplinary procedures. We have abolished the out-dated and onerous wages councils. The consequences of all that have been more jobs and rising real living standards at all levels of the income scale.
  Our aim, however, is to produce a fair balance between rights and responsibilities, so at the same time we have increased the protection given to individual employees when it was right for us to do so.
  Mr. Andrew Mackinlay: What does the President of the Board of Trade say to the principle that for every wrong there should be a remedy? There is no remedy for people in small outfits and those who have been employed for less than two years. If there is demonstrably a wrong—an unfair dismissal—how can he look that person in the eye and say, "You have no remedy"? That is the position at present.
  Mr. Lang: I am saying that we must achieve a balance between rights and responsibilities, in the interests of
  34
  employers and employees and the interests of creating employment and creating a prosperous economy. We are succeeding in that, but I am drawing attention to the increase in protection that the Government introduced when it was right for us to do so.
  The Trade Union Reform and Employment Rights Act 1993 was, I believe, the most significant addition to employment protection for nearly 20 years. It gave all pregnant employees a right to 14 weeks' maternity leave. It ensured protection against dismissal on specified health and safety grounds, or for asserting one's statutory employment rights. It gave employees better rights to information about their terms and conditions of employment. Since then, further significant legislation has ensured freedom of choice whether to work on Sundays for shop workers and for betting workers.
  So let no one pretend that the Government have failed to respect individual rights of workers. The best job security is more jobs. We have achieved that, with fairness and balance, and with good sense. That is the right way to proceed—not to have trade unions and other organisations again towering over the industrial scene, staking out their claims in Labour's interfering stakeholder initiative.
  Mr. Nick Harvey: If the Government introduced that string of new rights as recently as 1993, how can they be right to contemplate taking them away from almost half the working population in 1996?
  Mr. Lang: The hon. Gentleman was speculating on a matter that I shall discuss shortly. I want first to discuss industrial tribunals.
  Efficient and straightforward enforcement of rights helps minimise costs to everyone. A major priority of our reforms has therefore been the industrial tribunal system. Dealing with claims can be costly for employers, and especially for small firms. In December 1994, we published the Green Paper, "Resolving Employment Rights Disputes", setting out many proposals for reform of the system, the majority of which were well received by employers' and employees' representatives.
  I announced last week that we proposed to publish, for further consultation, a draft Bill designed to implement these measures. It will be published in the summer, and will introduce important reforms to streamline the industrial tribunal system. It will also aim to increase the proportion of employment rights disputes resolved by employees and employers themselves—or through conciliation by ACAS or by other third-party means— so that they need not enter the system at all.
  I consider it of the utmost importance for employers and employees to attempt to resolve individual disputes themselves, but I recognise that there are occasions when a third party can help. That is why we value the services of ACAS, and why we shall propose in the draft Bill the extension of its powers to conciliate in individual disputes.
  We shall also propose that ACAS be given powers to set up a scheme to enable an employee and employer to opt for voluntary arbitration on a particular complaint as an alternative to a tribunal hearing. That will offer a

  35
  quicker, simpler, less costly and more private option for resolving individual employment disputes, and we believe that it will be attractive to both employers and individuals.
  Mr. Andrew Miller: In referring to conciliation, did the right hon. Gentleman mean that that would be the end of the line for those employees, or is he saying that he will increase the scope of ACAS by increasing resources under existing legislation? Is he trying to block access to tribunals, or to improve the conciliation service by extending it?
  Mr. Lang: We are trying to make tribunals the last rather than the first resort, and to emphasise the importance of conciliation. We shall consult on the way in which that should be done, and, when we publish our Bill in the summer on a consultation basis, the hon. Gentleman will have an opportunity to express his views. I believe that consulting on a draft Bill will produce better, not more, legislation. Any contentious issues can be identified and discussed, which will help us to ensure that the changes we propose are beneficial and workable.
  That is not removing rights, as the motion suggests; it is building on the improved industrial relations that we have achieved in recent years. It is sound common sense. I believe that the proposed measures will be a major improvement in cutting the legalism, and especially the expenses, incurred by all parties bringing and defending complaints. The Bill has been welcomed by hon. Members on both sides of the House, and our approach shows how the interests of employers and employees can be furthered together.
  Ms Joan Walley: Given the concern that has been expressed, can the right hon. Gentleman give an absolute assurance that, regardless of the number of people employed in a business, their rights will not differ? Will that be the case regardless of whether a firm employs more or fewer than 10 people?
  Mr. Lang: No, I will not give that assurance. As I have said—and I am about to enlarge on it—there are already different arrangements for firms of different sizes. The matter is worthy of further consideration in this country, as it has been considered in other countries.
  We are always vigilant in regard to further steps that should be taken. Reform is a continuing, evolving process, and the proposed tribunals Bill is one of a series of possibilities that we have been examining. Excluding small firms from legislation would clearly be another way of removing significant quantities of red tape from those who are particularly vulnerable to being tangled up in it.
  The hon. Member for Oldham, West (Mr. Meacher) has attacked the Government for not doing enough to lighten the burden on small firms. We would not be doing our job if we did not give serious attention to that. Other countries already take such an approach. In Germany—prayed in aid by the Labour party—unfair dismissal requirements apply only to firms with six or more employees; France, too, has a less restrictive regime for small firms.
  Obviously, there would be drawbacks in introducing an exemption, not least for the employees concerned. There would be no question of our changing the legislation in
  36
  this way without taking legal advice on the implications, and carefully weighing the benefits against the disadvantages.
  Mr. Fabricant: I am grateful to my right hon. Friend for giving way to me a second time.
  Further to the point that my right hon. Friend has just made, and the thoughtful point made by the hon. Member for Thurrock (Mr. Mackinlay), does my right hon. Friend agree that we have a duty of care not only in regard to the employed—the hon. Member for Thurrock put it both eloquently and kindly—but in regard to the unemployed? It is all very well considering how we can or cannot protect those who have been employed for only two years: people must be employed in the first place. That is the balance we must get right in red tape.
  Mr. Lang: My hon. Friend is absolutely correct: balance is very important. The best employment conditions are to have a job, and the worst employment conditions are to have no job. That is the precise problem that the Government have tackled so successfully, with rising employment in recent years.
  The Government do not propose to be rushed into reform on the basis of dogma. How different from the Opposition, who, at the drop of a hat, seem keen to sign up to any number of regulations under the social chapter that would destroy employers' freedoms and employment.
  A survey conducted last summer by the European Enterprise Centre found that two thirds of Europe's smaller companies were worried that higher social costs resulting from the social chapter would make them less competitive. The Government's recent White Paper on the intergovernmental conference, which we published last week, says:
  "To accede to the Social Chapter could generate a one-way process in which European employment laws were increasingly imposed on the United Kingdom".
  That is the same social chapter that the Leader of the Opposition, in his ignorance, thought was just a set of principles from which he could pick and choose what to accept. I suppose that that is an academic point, as it is clear that, in his stakeholder's society, Labour would pick and choose them all—and add to them.
  The social chapter gives no option to member states to pick and choose the measures they like and to reject the ones they do not. The whole point of the draft social chapter, which we rejected at Maastricht, is that it would give the Community greatly increased powers to pass social legislation by qualified majority voting. We would have no veto over damaging measures, such as the European works council directive or the draft directive on parental leave which the other member states are likely to adopt soon.
  If we were to give up our opt-out now, future proposals could be imposed on us against our will in a whole range of areas, including working conditions, information and consultation, and equal opportunities.
  The Government opposed the European works council directive because we believe that companies should be free to decide the arrangements that best fit their own circumstances. The overwhelming advice from British business was that the directive would impose costs without bringing the corresponding benefits.

  37
  That advice is now echoed painfully by employer organisations in Europe. British companies were not alone in their opposition: businesses across Europe made their objections known. UNICE—the main organisation representing employers across the European Union—also opposed it, but other member states decided not to heed the views of European industry.
  Of course, some British-based companies—a tiny proportion of about a hundred—are affected by the directive because of the size of their work forces in other member states. But they remain free to decide whether to include their United Kingdom workers in their arrangements.
  Mr. Gerry Sutcliffe: Did the Minister and his colleagues consult employee representatives about the works council directive? He has talked about consultation with employers, but what consultation did he have with employees representatives, notably trade unions?
  Mr. Lang: We consulted widely before we decided on our stance, which fell in with our own inclinations. As a result, it is clear that there are many more employees now than would have been the case if we had accepted the social chapter.
  The social chapter is a blank cheque which, if we had signed up to it, could have imposed unlimited costs on British business and the British economy. It could have been used to pass a whole range of job-destroying measures which the United Kingdom could not block. Our IGC White Paper makes the Government's position on the social chapter quite clear. It states:
  "The United Kingdom will not give up its opt-out and cannot be forced to do so."
  In the words of my right hon. and learned Friend the Foreign Secretary, our opt-out is "here to stay". But the Opposition would not be satisfied even with the straitjacket of the social chapter.
  Mr. Meacher: Will the Secretary of State give way?
  Mr. Lang: Yes, for the last time.
  Mr. Meacher: The right hon. Gentleman has made great play with the risks posed by the social chapter. However, the Government became concerned about the costs of the social chapter only in 1993. In the previous 15 years, Conservative Governments had accepted the Transfer of Undertakings (Protection of Employment) Regulations, equal retirement ages, the application of sex discrimination legislation, the granting of 14 weeks' maternity leave to pregnant women, written particulars of employment to all employees, protection against whistleblowing, the extension of the TUPE regulations to non-commercial ventures and transfers of franchises, the removal of the upper limit on compensation in sex discrimination cases, and a host of other provisions affecting redundancy payments and unfair dismissal. Why did Conservative Governments accept those measures?
  Mr. Lang: The hon. Gentleman appears to be making a second speech, but he is wrong. We did not become concerned about the social chapter in 1993. We were concerned about it when it came up for negotiation in the Maastricht treaty. That is why we negotiated our opt-out.
  38
  We have accepted other changes in employment conditions where we thought it right and appropriate to do so and where we achieved the balance of which I spoke— between the rights of employers, the rights of employees and the interests of the economy.
  The hon. Gentleman spoke about the non-wage social costs, and claimed an extraordinary concept about Britain being disadvantaged. Let me point out that in Britain, for every £100 spent on wages, employers have to pay an extra £18 in non-wage costs. The figure is £32 in Germany, £34 in Spain, £41 in France and £44 in Italy. That is the burden of the social chapter in Europe, and that is why employers in Europe are so jealous.
  It is not just the social chapter: the Opposition want further to damage Britain's competitive edge, which has taken us from the bottom of the productivity growth league in the 1970s to the top in the 1980s and 1990s. They would not be satisfied with the social chapter; they want to go further and enforce a national minimum wage. We are told that it would increase pay, eradicate poverty, remove pay inequalities and even reduce the size of the taxpayers' bill for benefit payments. For all I know, it would probably cure the common cold. If that new wonder drug can do so much, why will they not tell us the level at which they will set it? The reason—as any fool will know—is that they know that it will destroy jobs.
  The Opposition continually refuse to disclose any details of their proposals. They do not tell us the rate at which it would be introduced, how it would be uprated, how it would be enforced, how many jobs would be lost, and how pay differentials would be resolved.
  Let me tell the House the real consequences of a national minimum wage. It would increase employers' wage bills, suppliers would raise the prices of their goods and services to cover their additional costs, and the upward ripple of the restoration of pay differentials would destroy competitiveness and generate inflation.
  The CBI estimates that the minimum wage would add some £4.5 billion a year to employers' costs. The university of Cambridge suggests that the figure could be £6.4 billion. In the absence of improved productivity, that would cause a loss of competitiveness. Company profits would fall, inflation would rise and unemployment would increase by up to 1 million if only half the pay differentials were restored. In short, the minimum wage would be a disaster for the country.
  The brunt of the job losses would be borne by the very people whom the minimum wage was designed to help— the low-paid, the young, the part-timers and the less skilled. British workers should not be fooled. They need only look at Europe to see the misery, poverty and joblessness that would follow.
  In sum, the Government live in the real world. Our policies are fair, balanced and sound and, above all, they are delivering. In contrast, the policies of the Opposition—should they ever have the opportunity to experiment with them in the real world—would spell disaster for economic recovery and for employment growth. I therefore urge the House to throw out the motion and approve the Government's amendment.
  4.33 pm
  Mr. Don Touhig: I have recently spent a lot of time debating and considering the rights of employees, as my Public Interest Disclosure Bill addresses that issue.

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  During the debate on the Bill on 1 March, we had some interesting discussions about employees' rights, companies' productivity and the burdens placed on business and industry. Many of us reached the conclusion that only through a valid partnership between employers and employees can firms prosper.
  We noted that, by extending the rights of employees, the Public Interest Disclosure Bill would help employers, as it would encourage employees to bring malpractice, crime and misconduct at work to the attention of those who were in a position to act in such matters and correct them. The Bill hopes to engender a culture of communication in the workplace by requiring that matters are raised internally before any public disclosure, to give the persons responsible time to act.
  A climate of communication and trust exists already between many employees and their employers. Widening that spirit of communication can only benefit the economy in general and small companies in particular. Once the individuals accountable know what is going on, they can act—perhaps to stop a fraud that is costing the company money, or a malpractice that could irrevocably damage the firm's reputation if it were made public.
  Beth Cawthorne was a young lady employed by a supermarket chain, and worked on a delicatessen counter. She discovered that her manager was changing sell-by dates on dairy products, pates and other items. When Beth was leaving the company, she brought that practice to the attention of her employers, who were pleased and grateful that she did so. The consequences of her not taking that action could have been horrendous for customers, who might have eaten contaminated food, and for the firm's good reputation.
  The Bill is not about regulation but about protecting employees' rights. A good employer already does that, and recognises its value. The Bill is not about compliance costs, but is a classic case of self-regulation. It will encourage companies to keep their own house in order.
  Public Concern at Work states that one third of the serious concerns raised with that organisation relate predominantly to tax, value added tax frauds, consumer rip-offs and abuse of the vulnerable or of individuals in public care. If such matters are not raised responsibly, damage will be done to this country's vital small business sector, and more bureaucratic rules will be required to be imposed on companies. More to the point, if such malpractices are not deterred and detected, the competitiveness of many companies will be threatened.
  Employment rights are the key to good relationships in any company. The right of protection from reprisal if an employee blows the whistle on a serious malpractice is one example. Such employment rights are about respect. By agreeing to such rights, an employer shows respect for his employees. I speak from experience, as someone who ran a small company before entering the House. Good trust is developed between the employer and employee, and that bond leads to increased efficiency and productivity.
  If an employee feels threatened, insecure or unhappy at work, he or she will not work well—as anyone who has run a company can tell you. The employee will carry that worry around and be less inclined to be loyal to the company. He or she will not perform to the best of their ability.
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  Employees who are secure at work, are able to communicate and can raise matters with their employer, feel that there is a safety net, which will catch them if they speak up when something goes wrong. Such employees will be loyal to their companies, happier and more productive. Comprehensive employment rights make not just ethical but economic sense for Britain in the last part of the 20th century.
  If the Government remove the right of appeal to an industrial tribunal for employees of small firms, they will prove how out of touch they are with sensible and effective management practices in British business and industry today.
  4.39 pm
  Sir John Cope: The Opposition motion seems to be worded as if only two parties were involved in this matter—the employer and the employee. Of course, a third party is involved—the unemployed.
  The background to this debate is the fact that small firms are at present, and are likely to continue to be, the main generators of new jobs. Large firms are likely to employ ever fewer people, however efficient and successful they are. Several large firms in my constituency have reduced their staff in recent years because of new technology and other developments—at the same time as increasing their turnover, sales and profits. More efficient methods often mean fewer employees. The great national firms that have in the past been the major employers will not produce the new jobs that we need. This is why we need small firms and new firms, and why we need to give them every opportunity to build up their businesses and take on more people.
  There is another fundamental misunderstanding in the minds of those who drew up the motion. The Labour party proceeds as if employers have an automatic duty to be employers—to take on and keep on staff, regardless of other conditions. The fact is that neither the Labour party nor anyone else can compel someone to employ someone else. Employment comes from a person deciding to take risks and to set up a business on his or her own— increasingly these days, it is women who are doing this. They must also assume the additional risk and responsibility of taking on staff and providing them with a living.
  If we want to continue bringing down unemployment, we must make it easier to employ people, especially for small firms. People need to be persuaded to take the risks of self-employment and starting businesses on their own. That is one of several reasons why it is right to reduce bureaucratic burdens that impose more heavily on small businesses than on larger ones. That is particularly true when it comes to employee rights.
  In a small firm, the boss is much closer to the employees, of whom there are only a handful. He or she sees them every day in the course of their work; they know how hard the boss works, and he knows how hard they work. The elaborate mechanisms necessary in giant firms employing thousands of people are not needed.
  The hon. Member for Islwyn (Mr. Touhig), whose constituency I find it difficulty to pronounce, spoke of his experience in running a small firm and of the necessity for partnership. I profoundly agree with him on that. It is therefore important that small businesses enjoy good

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  relations between employer and employees. The threat of industrial tribunals hanging over them will not necessarily help.
  Sir Donald Thompson: Northavon may be difficult to find but it is not difficult to remember. An international company operating from Northavon has just stated that it is suffering from an inability to employ young people. Its social costs are grindingly high, its taxes are too high, and it cannot modernise or refit because the unions would go on strike. The French franc is also too high, and the company in question—Brittany Ferries—is longing for the freedom that most large British companies enjoy.
  Sir John Cope: Although my hon. Friend has been to Northavon, I think I know what he means about not being able to find it. It is quite a long way from any substantial investment by Brittany Ferries—but I suppose that Northavon is nearer than Yorkshire to the centre of the company's activities.
  Small firms face other burdens as well. Anyone running a small company has to keep up with a huge range of regulations—governing employment, health and safety, fire, taxation and local authorities' requirements. The back-up mechanisms enforcing the various regulations are all different and are managed by specialists who can understand complicated regulations in their own fields because they deal with them every day, but the poor chap trying to run a small firm has to understand the whole lot himself if he is to be successful.
  It is no use the Labour party saying that it wants to help the unemployed if it is not prepared to help small firms. Nor is it any use the Opposition supporting a motion of this kind while trying to pretend that they are friendly to small firms. The Opposition sometimes claim to be in favour of deregulation, but at the first hint of any possible changes in this area, they flinch. That is unsupportable—
  Mr. Ian McCartney: I understand that the right hon. Gentleman is a former Minister with responsibility for small businesses. Would he care to offer the House any examples of rights that he would like to see removed as part of the Government's review?
  Sir John Cope: The hon. Gentleman is right to say that I have some experience of the matter, both as a Minister and in other ways. I am discussing the total burdens imposed on small businesses, and arguing that the Government are right to take a look at them. They were right to produce their Green Paper; they are right to introduce the Bill about which my right hon. Friend the President of the Board of Trade spoke towards the end of his speech.
  On the subject of hours of work, the hon. Member for Oldham, West (Mr. Meacher) complained that some people work too long hours while other people are out of work. To me, that shows that employers are reluctant to take on more staff and prefer instead to get their current staff to work longer hours. If the burdens of employing someone else were smaller, they would be more likely to take on more people and less likely to want their staff to work longer hours. There are many different reasons for overtime—they vary from company to company and from period to period—but the argument advanced by the hon. Member for Oldham, West did not stand up.
  Sir Harold Walker: The right hon. Gentleman seems to be arguing in favour of giving employers incentives to remain small employers, since encouraging them to use the same staff to work longer hours discourages them from expanding. At its logical extreme, the point seems to be that employers should dismiss employees so as to stay below whatever threshold is set.
  Sir John Cope: I absolutely accept that providing a small firm with an advantage of any sort may produce difficulties at the threshold below which small firms want to remain—in terms of numbers of employees, or turnover, or profit. Giving small firms a particular benefit does create a threshold problem of the kind that the right hon. Gentleman suggests. At the same time, the highest threshold is between employing nobody and employing somebody. We need to get people to start businesses and take on employees. We would reduce unemployment best if we made it easier, not harder, for small firms to employ people, but I accept the right hon. Gentleman's point about the difficulty of the threshold.
  I congratulate my right hon. Friend the President of the Board of Trade and his colleagues on initiating the series of conferences for small businesses. My right hon. and hon. Friends were right to put the management of the conferences in the hands of the Institute of Directors and the other organisations, but it was a good initiative for the Government to start the conferences. I was glad to see the full backing that the conference had from my right hon. Friend the Prime Minister and other Ministers last week.
  The hon. Member for Oldham, West read out a paragraph from the report, which was produced not by the Government but by the small firm organisations, presented to that conference. He did not read out the next paragraph, which states:
  "The restrictions on firing employees were also called into question and a lot of people said that they would be much more willing to take people on if they knew that it wasn't going to be expensive to lay them off, if it turned out that they didn't need them any more."
  Later, it states:
  "Industrial Tribunals were also seen as a problem area and many small business owners said that they resented the fact that they could get landed with a big legal bill over the pettiest dispute with an employee."
  That is not from the Government but from the small firms, and it shows the problems that the Government have addressed in the Green Paper and propose to address in the draft Bill.
  Mr. MacShane: One would think that employment was fixed and static and that no firm, small or large, had the ability to get rid of anyone. How is it that nearly 9 million people have lost their jobs—have been churned, laid off or dismissed—since the general election? Small businesses are laying off willy-nilly every day of the week.
  Sir John Cope: I do not know where the hon. Gentleman gets his figures. I have the unemployment figures to hand and, since April 1992, unemployment has fallen by 15.8 per cent. It has fallen in Oldham, West by 20.8 per cent., which is not quite as good as in Northavon.
  The end of the report given to the small business conference last week shows the results of the statistical survey that was prepared for the conference. On page 20,

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  figure 15 shows the ranking of burdens of government on business. One of the highest—almost the highest—rated burdens is "Employment Regulations". It is rated slightly lower than "Cost of Compliance", and slightly beats "VAT Administration", for which I have also had some responsibility, although we made some improvements and further improvements are coming.
  I have no doubt that many small firms are inhibited in taking on staff by the potential problems that they face from employment protection legislation. Over the years, various employers have come to my constituency surgery and told me about employees taking them to industrial tribunals. They face the burden of legal bills, and we heard opinions about lawyers just before the debate began.
  The Government are right to consider the whole area, and they have been steered in the right direction by the report of the small business conference. The House will have a duty to study the proposals in the draft Bill and examine the balance of which my right hon. Friend the President of the Board of Trade spoke. It is wrong to suggest that we should throw out the suggestions before they have even been made in the draft Bill. I approve of the system of publishing Green Papers and draft Bills in legislation of this kind. The process of producing new law is helped by the publication of draft Bills for study by all concerned. That improves legislation, and we will be able to minimise the burdens through effective, lasting legislation. I support the amendment moved by my right hon. Friend the President of the Board of Trade.
  4.55 pm
  Mr. Nick Harvey: The President of the Board of Trade was right to stress the importance of the small business sector to the economy. That must be beyond any serious doubt or debate. He and the right hon. Member for Northavon (Sir J. Cope) were also right to stress that none of us would wish small businesses, or any other businesses, to be burdened unnecessarily with regulations; but there is a world of difference between being burdened with regulations and the fundamental issue of people's rights. I shall explore the difference in a minute.
  When I talk to small businesses and their representative organisations, I find that they view with healthy scepticism pledges by the Government to do away with regulations. No doubt they remember only too clearly that Lady Thatcher came to power in 1979 committed to doing away with regulations every bit as much as she was committed to doing away with quangos. They know that the numbers of regulations and quangos since then have rocketed. When small businesses hear that the Government have made a commitment to removing the regulatory burden, they reflect that the Government brought in the vast majority of the regulations and have gone to the Council of Ministers and readily agreed to more burdens.
  The burden that small businesses most often bring to my attention is the very one that the hon. Member for Oldham, West (Mr. Meacher) mentioned earlier. Despite the fact that small firms continue to pay employers' national insurance contributions, they are now expected to cough up for statutory sick pay and redundancy payments. They do not understand why they should have to pay twice.
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  It has been said that individuals' rights in the place of work are red tape and burdens on their employers, but why should an individual worker's rights depend on how many other employees work for the same enterprise? People should have the right to feel safe in the workplace, not to be discriminated against, to have equal value put on their work compared with any other employee, to feel confident in employment and to know that an employer cannot turn around and fire them simply because their faces no longer fit. Those are every bit as much fundamental human rights as the right to choose one's religion, the right of freedom of expression and association, or any other right.
  The discussion this afternoon about the rights of employees should not be confused with the burdens of regulation. If a case can be made that the enforcement of those rights is placing an unacceptable burden on employers or on small firms, let us by all means look at the methods by which rights are enforced and the procedures for individuals to seek remedies. Perhaps better, more streamlined alternatives could be put in place. That would be sensible, and I welcomed the President of the Board of Trade's comments about the review that the Government are conducting on the ways in which individuals can enforce their rights.
  If the services of the Advisory, Conciliation and Arbitration Service or of any other body are to be expanded so that a conciliation service can be used more widely in dealing with individual complaints, that is to be welcomed. If that process goes a step further and those involved in a conciliation service are able directly to arbitrate, that is entirely sensible and is to be welcomed.
  Arbitration is already being used in the workplace. It is used when there are collective disputes. Many individual contracts of employment provide for arbitration in some areas of disputes. It would probably be far cheaper, quicker, simpler and sensible for arbitration to be used in dealing with individual employment contracts. If alleged unfair dismissal is examined through the process of arbitration, there is a far better chance of a sensible outcome. Perhaps someone will have visited the workplace. He or she will have heard both sides of the argument. That person will be able to produce a remedy that will facilitate a re-cementing of the working relationship. There will be a far better chance of that re-cementing succeeding in those circumstances than if a judgment is handed down by an industrial tribunal, a process which all too often costs far too much for all concerned and takes far too long to arrive at a conclusion.
  Much as the President of the Board of Trade wished to open up a divide between his position and that of the Opposition, he sought to disguise a clash between himself and the Deputy Prime Minister. The only difference of approach is to be found within the Government. That is represented by the letter that the President of the Board of Trade wrote to the Deputy Prime Minister on 5 March, when he warned that employees in small firms being denied employment rights would be controversial and that the Government might appear to be imprudent if they attracted criticism only to retract the proposals later.
  In essence, there is a dispute between the President of the Board of Trade and the Deputy Prime Minister. I wish the President every success in prosecuting his side of the dispute. I think that he will have the support of many Members of this place if he can win general support for the approach that he outlined this afternoon, which

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  involves introducing a new arbitration procedure to enable employment rights to be enforced. There is a world of difference between that approach and the Deputy Prime Minister's proposal of considering the "feasibility" of introducing "exclusions" into employment legislation. The difference is whether to reduce rights or provide a different way to enable individuals to enforce rights.
  Much is said about the advantages or benefits that stem from having a flexible labour market. It is essential that there is flexibility in the supply side of the labour market. In future, not many people will work throughout a career for one employer or even in one industry or discipline. In selling their labour, people need to be flexible. As we move into a more technological age, it seems likely that many people will have to retrain, perhaps several times, during a career.
  We must beware of a flexible labour market being used as an excuse for disguising bad employment practice. Many firms, in the name of the so-called flexible labour market, begin to act in a way that is counterproductive to the economic good of the country and to the best interests of their employees. For example, many people are being given self-employed contracts when they are not self-employed. They are rather surprised when representatives of the Inland Revenue take the view that they are not in self-employment but in what I shall describe as ordinary employment. They find themselves taxed accordingly.
  Other moves are short-term contracts and the contracting out of work. In other circumstances, whole jobs are split into bits and taken up by part-time workers. There are firms that lay people off—I have encountered this in my surgery work—after 102 or 103 weeks of employment. They do so to prevent them clocking up two years' employment, when they become entitled to employment rights.
  There is a variety of employment practices. The ingenuity of employers to dream them up is almost limitless. The practices of which I am talking are damaging to the labour market and to society generally, not to mention the economy.
  Ministers speculate about when the feel-good factor will return. They should be thinking at the same time about employment practices and the effect that they have on people feeling good. If employees are in fear of where their pay packet will come from in the weeks or months to follow because of the unsatisfactory nature of their contracts of employment, it is small wonder that they are not plunging into the housing market, buying cars or doing the various other things that the Government are waiting for them to do so that they can arrive at their much-vaunted feel-good factor.
  There must be some flexibility, but it would be better if overall pay levels were slightly lowered and in return employees had more security and confidence in their employment. If the Deputy Prime Minister had his way and employment rights were removed, employees who had given 10, 15 or even 20 years of loyal service to one small company could have their entire career blown away. They could be thrown out without any justification and they would have no remedy. There are some who perceive that approach as part of a so-called flexible labour market. We need some flexibility, but we must be cautious. Flexibility can be used to justify practices that should not be implemented.
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  Employees' loyalty and motivation are important assets that good employers nurture. Not for nothing has Toyota adopted the motto "Quality goods, quality work force". That has stood the company in good stead. A working environment in which people feel fulfilled and fairly rewarded contributes to improving economic performance and frees people's talents.
  The Minister for Competition and Consumer Affairs (Mr. John M. Taylor): The hon. Gentleman has referred to Toyota as an exponent of good practice. I remind him of Land Rover in my constituency, which is rather closer to home. At Land Rover, productivity is very high. A plenitude of good ideas comes up from the shop floor, which leads to best practice. That is a token of job satisfaction. The rate of strikes is the lowest for 100 years. New vehicles are rolling out of the Land Rover factory as fast as they can be made. Is that not a closer-to-home success story?
  Mr. Harvey: It is indeed. I am delighted to pay tribute to the work that is being achieved by Land Rover. I am sure, however, that the Minister is not suggesting that its success is being enjoyed because Land Rover employees have fewer rights than their counterparts elsewhere. If Land Rover has been able to succeed with a work force that has full employment rights, it provides a fine example that other firms should seek to emulate. They should recognise that they, too, can succeed.
  Mr. MacShane: Is it not a tribute to the managements of Land Rover and Toyota that they recognise trade unions and work solidly with them? As the Minister will know, co-operation from the trade union side has revolutionised Land Rover. Nothing positive stems from the pathological hostility to trade union representation that is represented by Conservative Members.
  Mr. John M. Taylor rose—
  Mr. Harvey: Many issues would not end up at industrial tribunals if they could be better dealt with in the workplace. It is beginning to emerge from academic research that small firms that have trade union recognition and have devised procedures in the workplace for resolving disputes are beginning to enjoy a great advantage. As a result, fewer disputes end up being dealt with by the costly industrial tribunal process. The issues are dealt with on site.
  Mr. Taylor: Notwithstanding the intervention of the hon. Member for Rotherham (Mr. MacShane), surely the hon. Gentleman accepts that the ultimate liberation of Land Rover was as a result of privatisation? When I first became the Member of Parliament for Solihull, in 1983, there was a communist for a shop steward, appalling industrial relations and spare parts flying over the wall. Privatisation has made Land Rover.
  Mr. Harvey: I certainly will not dispute that point with the Minister. In principle, there is no reason why the car industry should have been in public ownership. If Land Rover is succeeding in the private sector, everyone should be very pleased about it.
  Employability, flexibility and employment are underpinned by the creation of a work environment in which people feel fulfilled in jobs that are rewarded fairly

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  and are satisfying. We should have a framework of employment rights that will foster that environment and cause it to spread, and which will provide access to consultation and participation. In time, I hope that the framework will be expanded, giving an ever-increasing number of employees rights to participate in the decisions made at their workplaces, to share in the profits and to become shareholders in the company itself.
  Mr. Fabricant: The hon. Gentleman will know that Toyota, which he mentioned in the earlier part of his speech, is based only a few miles down the A38 from Lichfield. Some of my constituents work there. Does he accept that Toyota would never have come to Britain if the same conditions of employment operated here as operate in Germany? Toyota is a few miles down the A38 from Lichfield and not a few miles down the road from Bonn because of our conditions of employment.
  Mr. Harvey: If Toyota is willing to come to Britain with our current employment rights, the necessity for anyone to take away or water down those rights any further seems to be negated.
  The most successful companies know how to involve and motivate their employees by ensuring that they have a real say in decision making, a share in the ownership of the enterprise and a share of the profits that they help to create. We should be creating a climate in which management and employees come to share a common interest in the future of their enterprise and a joint commitment to success. The creation of that climate will require a legal framework that encourages and rewards companies that take a long-term view of their profitability and invest in their work forces as a positive asset, rather than regarding employee rights as a source of red tape or as a burden.
  We should be creating an industrial climate in which employees are motivated co-operatively to meet the challenges of competitive markets. The creation of that climate will involve creating the right industrial relations and legal framework, and the provision of ready, easy, cheap and quick access to the means to enforce those rights and to get proper and meaningful remedies.
  5.12 pm
  Mr. Patrick Nicholls: There was a great deal—to our mutual embarrassment, I suspect—in the speech made by the hon. Member for North Devon (Mr. Harvey) with which I could agree. Fortunately, there were some things on which I could draw the line between us, which I am sure will come as a great reassurance.
  For many years, I have had the great good fortune to take part in debates, in the Chamber or in Standing Committee, with the hon. Member for Oldham, West (Mr. Meacher). He is a tremendous debater, and combines an engaging charm outside the Chamber with a great degree of brazen, bare-faced cheek inside it. When we hear him talk about job insecurity and the circumstances in which jobs arise or fail, we can forget that he is one of the relatively few Opposition Members who was a Minister in the previous Labour Government.
  I know that the old brain cells go down as the years roll by and that we cannot remember what happened but, as a member of that Labour Government,
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  the hon. Gentleman should cast his mind back to job market conditions in 1979. We should remember car-park democracy, Red Robbo, flying pickets being able to impose their will on people, the scenes on the Grunwick and Wapping picket lines, and the inequities and evils of the closed shop. Often, unless people were prepared to sign up to trade union membership, they could not even work. Trade union ballots were unknown or, if they were known, the idea that they should have been secret was unknown.
  Where did all those job market features come to pass? They came to pass in the winter of 1979, when a cancer patient who wanted to know their priority on the operating list did not ask the consultant surgeon but the hospital porter, because it was he who worked on the priorities. Cancer patients were queuing up in the snow for ambulances that never arrived. In the streets of the capital city, great heaps of refuse were sprayed with rat poison because public sector unions would simply not shift them. And we had to have temporary mortuaries because it was not possible to cremate or bury the dead.
  That extraordinary series of events—which now seems light years away, except that we still have a few former Labour Ministers who have cause to remember it—can be summed up in the marvellous phrase of the Labour Prime Minister who, returning from the sun-blessed shores of the West Indies, asked, "Crisis? What crisis?" Those events were the real crisis in the jobs market.
  The incoming Conservative Government had to dismantle all the conditions that made that situation possible, and all the underpinning trade union law that put trade unions above the law. Labour Members voted against every provision and reform that we made: abolition of the closed shop, the provision of secret ballots, and ballots for the election of trade union officials.
  The present Leader of the Opposition used a marvellous phrase—which the hon. Member for Oldham, West, to be fair to him, would probably still go along with; he might have the honesty to say so—to describe the idea that there should be ballots for the election of trade officials: "monstrous effrontery". That attitude towards the jobs market and the industrial climate destroyed jobs on a grand scale. No thanks to Labour, all that has been swept away by this Government—in the teeth of opposition from the Labour party. Any debate about job insecurity, especially one that is opened for the Opposition by a member of that deplorable Government, has to start from that point.
  The hon. Member for North Devon said—I hope that I paraphrase him without being unfair—that there must be some balance between the types of protection given to people in different types of work. I do not think that anyone would deny that. I am not sure whether it was intentional, but he suggested that, in a sense, it was all or nothing, and that it was possible that, under the Government's proposals—and because of the direction in which they are moving—for certain employment rights to be denied to people who work in small firms. That is not my understanding of the law, and it is certainly not my understanding of the Government's intentions.
  Employees have certain rights that are absolute and which apply even when one person is employing another. No matter how few they are, all employees automatically have absolute rights if, for example, there are attempts at discrimination on grounds of race, sex or trade union

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  membership. I cannot imagine for a moment that the Government would make any proposals that would destroy those rights. Beyond that, we are into territory in which it is possible to ask to what extent a growing business can take up, and survive the burden of, particular types of employee rights.
  It is extraordinary, but if we listen to Opposition Members it sometimes seems as if employers are people who are guilty of wanting to introduce jobs into the workplace. It seems that, when an employer creates a job, something bad has happened and that we must right away cover the job with all sorts of responsibilities and burdens, almost as a punishment.
  To adopt that attitude is to ignore what a job is in the first place. A job arises because the employer or entrepreneur sees an opportunity to create a profit for himself and to create a job for someone else. The job is real if it answers a commercial need. The job is real for the employee who might fill it if it is allowed to flourish. Ultimately, if so many conditions and responsibilities are imposed on a person who is creating a new business that he simply says, "No, I am not going to put up with that," the job will be killed off. Who benefits from that?
  We see the problem clearly in the context of minimum wage legislation. If the boss of someone who works part time in a corner shop for what may seem a relatively small amount of money—but who wants the jot)—is told that he cannot pay that person at £3.50 an hour but must pay £4.50, what will happen? The job will certainly disappear. There is nothing unusual or radical about that. It is sheer common sense.
  Mr. MacShane: In the Register of Members' Interests, the hon. Gentleman is listed as having some 10 remunerated employments. Could he perhaps give up one or two of them and take an unemployed person off the register in exchange?
  Mr. Nicholls: Even for the hon. Gentleman, that was a particularly puerile question. All that I will say to him is that, unlike him, when I talk about employment matters, I know what I am talking about, because I have been the senior partner in a firm that creates work for employees who would not have had work otherwise.
  I have no idea what the hon. Gentleman has done in his past life, but I hazard a guess that he has never been out there in the marketplace having to take commercial decisions, being prepared to live off his own risks and his own wits and at the same time creating positions for other people. When I look at the hon. Gentleman, it is clear that, in an age when even street cleaning has been mechanised, there is only one job he can be confident of knowing that he can fulfil—that of Labour Member of Parliament for a safe seat.
  Mr. Fabricant: Would my hon. Friend be surprised to learn that the hon. Member for Rotherham (Mr. MacShane) was a journalist in Switzerland, complete no doubt with a Swiss bank account?
  Mr. Nicholls: I did not realise that he had a Swiss bank account, but there is so much that one does not know about journalism.
  Mr. Deputy Speaker (Mr. Michael Morris): Order. Let us return to the subject of the motion.
  Mr. Nicholls: As I was saying before I was so—as you have ruled, Mr. Deputy Speaker—unnecessarily
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  interrupted from the Opposition Benches, as an employer I have some knowledge of what it means to create employment.
  We can see the effect that a minimum wage would have on this country when we consider the effect that it has already had on Germany and France. I was talking, recently, to a British business man who is in a small way of business based in France. He had been thinking of taking on a typist. It was not a particularly elevated position, but there was a job there. When he investigated what the total package of social on-costs that he would have to add into the system would be, he found that it was almost £40,000 a year. As a result, he did not create the job. Somewhere out there now there is an unemployed typist who might have been employed.
  The idea that the basis of the legislation to restrict working to 48 hours a week is concern about health and safety is nonsense. It has been proposed for a perfectly straightforward reason—Germany is the dominant power in the European Union and it is in the business of trying to impose on Britain the social costs that are making it increasingly uncompetitive.
  I asked the hon. Member for Oldham, West where was the logic in saying that, if people work more than 48 hours a week, they run a risk to their health. I pointed out that the hon. Gentleman certainly works more than 48 hours and that self-employed people had to work longer hours. He said, "Oh, there are lots of exceptions." Of course there are lots of exceptions. That, in the end, is what will make the 48-hour rule liveable with to some extent—it is such nonsense because there are so many exceptions to it.
  It says something about the Labour party's attitude that its ideal is that someone should work 48 hours and not a jot more. What would be the effect of such a policy? The answer is perfectly straightforward. Some people would lose their job and others would find that the hours for which they could work would be restricted. Far from being able to take home more wages, people would take home less.
  Mr. Ian McCartney: As an employer or former employer, will the hon. Gentleman tell me whether an employee of his, who had already worked 48 hours in a week and decided that he did not want to work additional hours that week, should be protected in law? Does the hon. Gentleman have an absolute right in all circumstances to make employees work more than 48 hours?
  Mr. Nicholls: The contract that I had with employees I might need to work more than 48 hours a week would state that they would work for my firm at a wage or salary to be agreed. The hon. Gentleman might say, "I do not care what crisis you have got on, what orders you have to satisfy or what cases you have to prepare to go to court at short notice, in no circumstances will I work more than 48 hours a week," but, in case he is thinking of writing me a job application, let me tell him that he would not get the job. It is not possible realistically to limit hours as is proposed. It does not begin to make any sense.
  There is a fault line running through the argument, made on the Opposition Benches, that low pay is not better than no job. It is. The hon. Member for Oldham, West made the point that the jobs market is not static. If people are on low pay, they are not there for ever. There are circumstances in which people have to work longer hours, but sometimes they have to work shorter hours.

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  What we need is a climate in which those who offer jobs are able to reach an accommodation with those who may be able to fill them. The idea that it is possible to increase the job security of some of the less able and less well cared for members of the jobs market by restricting the hours that they work is nonsense.
  What people in general, the unemployed and the country need is a climate in which jobs can thrive without industrial disruption, in which people can reach sensible arrangements and in which foreign courts do not try to impose social chapters. That is the climate in which jobs thrive. It is not the vision that we find in the Opposition motion before us today.
  5.26 pm
  Mr. Andrew Miller: I shall refer in some detail to the remarks made by the President of the Board of Trade about the industrial tribunal system. I agree with one point that he made; that is it not working as well as it could. That point is clear to any hon. Member who has ever conducted an industrial tribunal. The problem is that, as case law has developed, industrial tribunals have by their very nature become more and more legalistic and have involved more lawyers, barristers, appeals to the employment appeals tribunal and so on. There is an underlying problem there, and I grant that the President of the Board of Trade is right to undertake a review of the mechanism in force.
  When the tribunals were first set up, it was clear that they should have due regard to the circumstances of the case before them. Against that background, it was proper and possible for the tribunal to take into account factors such as the size and nature of the company. I remember some years ago taking a case against a company which used the defence that it was only a small company, and therefore did not have the expertise to take cognisance of all the facets of the law in the same way as a large corporation could. The tribunal chairman acknowledged that that was a fair point, but when it was pointed out to him that the small company was part of a conglomerate in a large corporation, he took a slightly different view. That was a perfectly proper balance to strike.
  The industrial tribunal system, as it is currently constructed, is of importance to employees and employers in small businesses, if it is used properly. It has become over-legalistic. If we could find a mechanism to bring back the informality that existed in its earlier years, we would do a service to both employees and employers in small businesses.
  Employees in small businesses obviously do not have the collective power of their fellow workers in larger companies. Reference was made earlier to large companies such as Rover. Clearly, the working environment in such companies is entirely different. It is clear that in small businesses, which may supply companies such as Rover, the employees do not have access to the collective power of the work force of a successful company such as Rover or, in many cases, to the professional advice that trade unions offer. There is a shortage of expert advice.
  Small businesses, through some of the employer organisations, have limited access to advice, but they do not have the expertise of the professional personnel
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  departments of the large corporations. As a consequence—they may not even have a personnel officer—their natural inclination is to go to a local law firm. I submit that that is a mistake and that it propagates a system that is creaking at the seams. A number of Conservative Members who are lawyers are rapidly looking at their diaries; perhaps they are looking for cases in which they are involved. However, when matters of common sense need to be examined, it is not helpful to use such a system.
  Sir John Cope: The hon. Gentleman's advice is not sensible or practical for a small firm. If a small employer is taken to an industrial tribunal, he needs proper advice. Where is he to get it? One of the places to get advice is from his solicitor or from another expert. Just to wander into an industrial tribunal is to be taken to the cleaners. Many people—this is my experience and that of others—are told when they go to a solicitor, "Look, you would do much better to settle. Pay them a few thousand pounds now. Don't bother going to the tribunal. Just settle now and clear up the matter."
  Mr. Miller: I thank the right hon. Member for Northavon (Sir J. Cope) for that helpful intervention. If he listens to the rest of my contribution, he may understand the basis of my argument. I put it to him that his argument applies to employees as much as it does to the employers, to whom he referred. However, it is often the case that because the system is creaking at the seams, it is not doing justice to the underlying remit of the tribunal which is to try to resolve matters on the basis of common sense.
  I will answer the right hon. Gentleman's point specifically, because it is important. I believe that the role of the Advisory, Conciliation and Arbitration Service—ACAS—is breaking down in this area. It is not delivering the kind of service that it should deliver to small businesses that need help and advice. ACAS should be able to advise—"advisory" is the first word in its title. It should have the resources properly to advise small employers who ask, "Am I doing the right thing here? Am I within my legal rights?" The problem is that, with the cuts affecting ACAS, time and again, officers are not available to give the detailed advice that is needed within the time frame. There is an underlying problem.
  The President of the Board of Trade referred to conciliation; that is an important service provided by ACAS and it takes place before a case is heard by an industrial tribunal. My experience is that ACAS officials have only limited time at their disposal in which to seek to address the problem between the two parties. When they find the time to bring the two parties together, solutions can often be found through the conciliation process.
  Mediation, which is also within the remit of ACAS, is not often used. I have no doubt that when we discuss the Family Law Bill next week, we shall hear cries of derision from one or two hon. Members, such as the hon. Member for Sutton and Cheam (Lady Olga Maitland), about mediation. Let us look at mediation in the context of ACAS, although that function is seldom used because it requires resourcing.
  The arbitration function tends to deal more with collective issues and may not be relevant to this debate. However, within the framework of advice, conciliation

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  and mediation, there is an important role for ACAS. That is the kind of resource that the state should provide for employers and employees to help them to get on with their business. It is not a case of saying, "This is the nanny state," to use the phrase of the hon. Member for Teignbridge (Mr. Nicholls). ACAS is an example of the Government providing a service that is available to the parties to enable them to resolve their differences without going to industrial tribunals. That point should be thought about carefully.
  The President of the Board of Trade did not respond to Labour interventions by saying that he sought to reduce the formal legal structures within the industrial tribunals, and he did not say that he intended to limit access. However, as is well known from the leaked letter to the Deputy Prime Minister, such a view is circulating inside the Government.
  I put it to the Government that, if there is a need to carry out a review of the industrial tribunal system, the way in which to do it is to look at the mechanisms that lead up to tribunal hearings and then to look at the mechanisms during the hearings. Such an attempt could also reduce the heavy burden on the system. The industrial tribunal system has many roles associated with it. Some of them have developed in recent years and others developed long before this Government came to office. It is ludicrous to assume that the industrial tribunal system could operate with an arbitrary cut-off point based on the size of the company involved.
  The list of items is so long as to make the Government's suggestions nonsense. I do not believe that any member of the Government is considering removing race relations from the list of items covering all employees. It would be ludicrous to say that small employers were able to discriminate but that larger employers were not. Clearly, there are many areas in which a tribunal must, if pressed, take a view of the claim before it—and this was set out in the original legislation— to have due regard to the circumstances.
  One example might be time off for public duties. Clearly, it is difficult for a small employer to give time off to somebody who has become a justice of the peace, whereas it is less difficult for a larger corporation. Society needs to deal with that problem. Given the trend towards smaller and smaller companies, it would be wrong for no justices to come from that background. Inevitably, tribunals need to consider the problem in the way that I have described.
  Mr. Nicholls: I am following what the hon. Gentleman is saying. He is making a responsible speech and I agree with a great deal of it. However, is there not a difference between the rights and safeguards that can be given to those working in a small business and those working in a large business? It is a question of where the balance lies, and that needs debate. This Government have started that debate. Therefore, at least on that issue this evening, what is the difference between us?
  Mr. Miller: Quite simply, the difference is that the Government are suggesting an arbitrary cut-off, whereas current law requires a tribunal to have due regard to the circumstances. That gives equality across the board, irrespective of the size of the firm. For the sake of argument, let us consider what would happen if the
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  arbitrary cut-off was set at 20 employees and someone was wronged first, in a company of 21 employees, and secondly, in a company of 19 employees. It would be ludicrous to discriminate between the two cases. Indeed, the wrong done to the employee in the firm of 19 might be far greater than that done to the employee in the firm of 21. The key point is that there must be due regard to the circumstances.
  Britain is moving towards smaller and smaller employment units. The contracting-out ideology has dominated many large corporations, although it is interesting to note that as they have flattened out and examined their management structures, some have begun to question the logic of contracting out everything just for the sake of it. Nevertheless, the fact is that more and more employees will be working in smaller companies, so we need to ensure that their rights are properly protected.
  The small business sector is undoubtedly important. The hon. Member for North Devon (Mr. Harvey) made a pertinent point about the feel-good factor. I intend to refer to the trade union of which I am a member, the Manufacturing, Science and Finance Union. Usually, that would result in an instant response from the hon. Member for Teignbridge, but I notice that he has now left his place.
  MSF conducted a survey, published in December 1995, of 366 public and private sector workplaces. It is a regular, systematic and professionally conducted survey, and Ministers have seen the results. It found that 33 per cent. of respondents felt that their jobs were less secure than in the previous quarter. Some 5 per cent. said that their jobs were more secure, while 61 per cent. reported no change. That does not represent the hoped-for feel-good factor. In a separate survey, 58 per cent. of those questioned felt that their jobs were insecure, while 65 per cent. felt that their jobs would not be secure by the year 2000.
  That is the real background against which this debate is taking place. There are smaller and smaller employment units, and there is a lack of any feel-good factor among employees.
  Mr. Spencer Batiste: The lack of a feeling of security is well documented beyond the survey to which the hon. Gentleman referred. Does he agree that the reason for it is that the pace of technological change has resulted in a shift in the nature of employment? Have not the newly emerging countries on the Pacific rim produced a range of new competitors? Unfortunately, whereas people used to expect to go into a job for life, the present reality is that most people starting work now expect to change employment a number of times. That is one of the causal factors behind the figures that the hon. Gentleman cited.
  Mr. Miller: The hon. Gentleman has been reading my speech. My next line refers to high-tech companies and the change in employment structures. I agree with his points to a certain extent, but just because some of the factors are technologically driven does not mean that there is not a problem that must be addressed. As a nation, we need desperately to restore a feel-good factor, and we should do so by having an early general election.
  Mr. Ian McCartney: The hon. Member for Elmet (Mr. Batiste) referred to technological change, but what he said is also true for many of our competitor countries.

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  In the league table for industrial competitiveness and job creation, Britain comes 20th out of 24. All our major competitors have dealt with technological change, but have still been able to create employment.
  Mr. Miller: My hon. Friend is absolutely right. We need only look at the extraordinary rate of development of small and medium-sized enterprises in the Stuttgart area, in California and in parts of the Asia-Pacific countries.
  My point is that our centres of excellence in research offer tremendous potential benefits, but we are not exploiting them, especially in such areas as information technology, electronics and genetics. We also run the risk of losing our lead in areas where we have been traditionally strong, such as Pharmaceuticals and aerospace. If we are not careful, the employment opportunities in those areas will drift away. Time and again, research and development conducted by some of our household names is being undertaken outside this country.
  We need to revive R and D from the bottom up, and the role of small and medium-sized enterprises in that is enormously important. That revival is not happening. That is nothing to do with some arbitrary cut-off in employment rights; it is not happening because of the basis on which those companies exist inside this country. For example, they do not get proper taxation treatment. A recent report by the Select Committee on Science and Technology—the hon. Member for Elmet (Mr. Batiste) was a co-signatory—called for tax breaks for companies conducting R and D at the high-tech end of industry.
  Mr. Batiste: The hon. Gentleman and I have worked together on two Select Committee reports that have touched on the points that he is making. I should be grateful if he would confirm two points for the benefit of the hon. Member for Makerfield (Mr. McCartney). The first is that biotechnological research has been driven out of Germany almost entirely by over-regulation of the German market. The second is that the average German worker costs his employer 25 per cent. more than the average Japanese worker, and for that he works 25 per cent. fewer hours—yet the Japanese do not regard themselves as competitive.
  Mr. Miller: On the hon. Gentleman's first point, he knows that he is talking nonsense because there are historical and cultural reasons why the Germans have been slow in investing in biotechnology. It is important to realise that now that there is a greater understanding of the protections and mechanisms, that trend is changing.
  On employee costs, the hon. Gentleman will recall that a machine tool company told the British parliamentary delegation that, when it noticed the recession, the first thing it did was to invest in training and in R and D. It is extraordinary that our companies have not responded in the same way. The reason for that has more to do with the Government's attitude to training and to support for investment and tax breaks for R and D, and the lack of structural support for company development than with employment law.
  The Government are fond of telling us that countries such as Germany and France are grossly over-regulated in employment law. However, those countries do not have
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  the same problem with the high-tech end of small and medium-sized enterprises. It is not valid to draw a universal comparison and say that all SMEs are the same, but that sector is vital to the growth of our economy and we have a severe problem within it. To tackle those problems, while we need to consider the mechanisms of the tribunal service and the Advisory, Conciliation and Arbitration Service, we should not create an arbitrary cut-off that disadvantages employees in an important sector of the economy.
  It is against that background that I urge hon. Members to support the motion, which sets out the argument concisely. Let us go forward in a way that is in the interests of small and medium-sized employers and their employees together.
  5.51 pm
  Mr. Michael Fabricant: I had not intended to take part in the debate, but I became so incensed by the naive comments of the hon. Member for Oldham, West (Mr. Meacher) on what he thinks creates employment that I felt compelled to speak.
  I notice that the only Opposition Member with any business experience is the hon. Member for Islwyn (Mr. Touhig), who I am pleased to see still in his place. The hon. Member for Rotherham (Mr. MacShane) points agitatedly at himself. As I understand it, his only expertise is in choosing in which Swiss bank account to deposit the money that he collected from his journalism when he was employed in Geneva.
  Mr. MacShane rose—
  Mr. Fabricant: I give way to the hon. Member for Rotherham and Geneva.
  Mr. MacShane: I am deeply flattered by the hon. Member for Wig's view that I am a journalist. However, I have not been a paid journalist since 1977. I am grateful for his recognition of my writings but the hon. Gentleman must count me out as a paid, full-time journalist.
  Mr. Fabricant: I am sad to hear that the hon. Gentleman is one of the few people in this country who is unemployed—or least that he was unemployed before he became a Member of the House of Commons. Certain people are unemployable. The hon. Gentleman's rather puerile comments on my personal appearance—which, I might add, are technically wrong—show why he is unemployable. Unlike the hon. Gentleman, I have never had a Swiss bank account, but I have been in business. I started a small firm, and it grew into one that supplied radio studio equipment to 48 countries worldwide, including radio stations in Geneva, Basle, Lucerne and Zurich. I am sure that he listened to some of those stations.
  If my company had had to exist under the regime proposed by the hon. Member for Oldham, West, it would never have got off the ground. Some 200 people employed by my company directly, and several hundred—perhaps several thousand—others who were employed indirectly by my company would be unemployed as a direct consequence of what is being proposed by new Labour. I propose to show that there is no difference between new Labour and old Labour. Plus ça change: it remains exactly the same.

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  The speech of the hon. Member for Ellesmere Port and Neston (Mr. Miller) was especially interesting, but some of his arguments were unbalanced and lacked logic. Although he recognised—on this there is no difference between the Government and the Opposition—that small businesses have to be treated differently from large businesses, he then said that there should be no arbitrary cut-off. What sort of cut-off should there be? He implicitly said that it should be non-arbitrary. Does that mean that there will be an employment scheme for judges who would decide in every instance whether a business should be treated as small or large?
  Mr. Miller: The hon. Gentleman was not listening. I said several times that the original guidance to tribunals, which still stands, was that they should have due regard to the circumstances of the case. That includes—case law from senior courts has supported this—a justifiable defence for a small employer who does not have the same expertise as a large one and who takes a slightly different route in tackling problems. That is perfectly sensible. It is up to the courts to determine whether an employer has acted reasonably in the circumstances.
  Mr. Fabricant: As I said, the hon. Gentleman is a woolly thinker without a woolly hat. He would create an employment scheme for judges and those who care for ACAS. The whole point of the debate, Mr. Deputy Chairman—
  Hon. Members: Deputy Speaker.
  Mr. Deputy Speaker: Order. Let us get the terminology correct.
  Mr. Fabricant: Mr. Deputy Speaker, you are correct. You know that I am a new Member who has been here for only three years. At times I forget—unlike other, experienced Members who are present. Perhaps I get it wrong because I am so emotionally involved in the issue. I am concerned about job creation, but Labour Members are concerned only with a political dogma based on no practical experience whatsoever.
  Job insecurity does not affect this country alone. The issue has come up time and again in the Republican primaries in the United States of America. It is alive— and, sadly, flourishing—in France, Germany, Spain and elsewhere directly because of the changing industrial scene worldwide, as my hon. Friend the Member for Elmet (Mr. Batiste) said. It would be foolish in the extreme to ignore that.
  There is clear evidence that job insecurity is decreasing. The John Lewis department store in Oxford street is much frequented by the Leader of the Opposition, especially as he likes to talk about stakeholding. I am quite familiar with the management of the John Lewis store in Milton Keynes.
  Mr. Ian McCartney: Name dropper.
  Mr. Fabricant: For the record, I should say that I am not a discount taker. I have no interest to declare in the John Lewis Partnership, other than the fact that I am probably one of its bigger customers.
  Mr. McCartney: How can you afford that?
  Mr. Fabricant: I know that the hon. Gentleman has been searching nervously through the Register of
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  Members' Interests to find out about me. It is simply because I was able to build up a business and sell it at the right price—I would not have been able to do that had the Labour party been in power in the 1980s—that I am able to be such a good customer of the John Lewis Partnership.
  The John Lewis Partnership is a good employer, but for the first time it is experiencing difficulties in recruiting and retaining staff. People are leaving the partnership to go to other jobs, because the job market is picking up. We should be aware of that, and the Labour party should acknowledge it, instead of constantly carping and criticising the Government's record.
  The hon. Member for Oldham, West said that Sir Winston Churchill would be turning over in his grave at the thought of the Government's proposals. I dispute that. Sir Winston said that there should be a safety net below which no one should fall. I do not believe anyone in the Opposition or on the Conservative Benches would argue that the welfare state should not protect those least able to protect themselves.
  But this debate is all about balance. We know from experience not only in this country but in the United States, which has a far less extensive welfare system than we do, that too much protection acts as a disincentive to work. That part of the balance must be got right.
  As I said in an intervention, the House of Commons has a duty of care not only to Members' constituents but to the nation. That duty extends not only to those in employment—the issue we are debating—but to those currently unemployed. Unless the balance is right with regard to ACAS and industrial tribunals, we will find that small businesses will not survive. As a consequence, we would no longer be the nation with the greatest percentage of its people in employment among the large economies of the European Union. We would experience far greater unemployment as a result. I know that no one in the Opposition or in the Conservative party who would want to see that, but such is the consequence of the Opposition motion.
  The hon. Member for Oldham, West talked about the OECD, and came up with a series of statistics to try to prove that this country is a non-performer. Yet the OECD has said that the greatest cause of unemployment in continental Europe are the on-costs specifically arising from the social chapter. The Labour party advocates, however, that this country should sign up to that chapter. As my right hon. Friend the President of the Board of Trade has said, not only would the adoption of the social chapter cause unemployment to rise by a further 1 million, but it would be equivalent to a blank cheque.
  The terms of the social chapter would mean that we could merely use qualified majority voting to prevent future legislation dreamt up by the unelected wide boys in Brussels, who have probably never had a real job in their lives. Those are the very people who have created unemployment in France, Germany and Spain. Those are the very people who, along with their cohorts in the Labour party, would create unemployment in this country, too. That is the sadness of it, because the will on both sides of the House is to see the unemployment rate fall, but the very policy advocated by the Labour party would cause unemployment to rise.
  We cannot divorce the state of the economy from levels of unemployment. Let us now compare and contrast new Labour, as espoused today, with old Labour of a few years

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  ago. The hon. Member for Oldham, West criticised at length our reforms of the trade union movement. He said that we are the guilty party. If we are accused of forcing the unions to adopt a democratic selection of their leaders rather than trade union leaders appointing themselves for life, as Arthur Scargill did, mea culpa—we are guilty. If we are accused of forcing unions to hold secret ballots before commencing a strike rather than adopting the Red Robbo tactics of intimidation, mea culpa—we are guilty. If we are accused of forcing unions to opt for a cooling-off period before calling a strike, mea culpa—we are guilty.
  Mr. MacShane indicated dissent.
  Mr. Fabricant: I note that the hon. Member for Rotherham and Lucerne is shaking his head in disagreement. Does he care to intervene? No. He is emptily shaking his head in disagreement, yet the House notes that he has nothing to say.
  Under old Labour, Britain was the sick man of Europe. It lost 29 million working days through strike action in Labour's last year of office. In 1995, thanks to the Government's reform of trade unions—a policy so loathed by the hon. Member for Oldham, West—415,000 working days were lost through strikes. I accept that that is 415,000 too many, but compare that with 29 million working days. Old Labour, new Labour—there is no difference, we learned that today.
  Inflation is one of the biggest enemies of small and large businesses alike. The inability to predict future expenditure and to budget for inward purchases destroys employment. Let us compare and contrast what new Labour and old Labour has to say about that.
  The hon. Member for Oldham, West seeks to submit the country to the blank cheque of the social chapter and the minimum working wage. The Labour party, however, still cannot admit what that minimum wage should be because, at its heart, it recognises that it costs jobs. The inflation that would be caused by a minimum working wage would be reminiscent of the rate achieved in the days of old Labour.
  Under the last Labour Government, the inflation rate averaged 15.5 per cent. and peaked at 27 per cent. In January, under the Conservative Government, the inflation rate was less than 3 per cent. Yes, mea culpa, we are guilty of rejecting the minimum wage to keep jobs in the country. Yes, mea culpa, we are guilty of rejecting that minimum wage and thus attracting firms like Toyota to the United Kingdom. Old Labour, new Labour—there is no difference. Just look at those on the Opposition Front Bench.
  In this debate, we have heard the same old arguments from the Labour party—arguments for high inflation, industrial strife, high levels of unemployment and job insecurity. Old Labour, new Labour—there is no difference. I oppose the motion.
  6.8 pm
  Mr. Denis MacShane: I listened, hoping for some profit, to the text delivered by President of the Board of Trade. He read it at breakneck speed, and, frankly, he did so more quickly than the time it took Mike Tyson to dispose of Frank Bruno yesterday. I had hoped for some guidance.
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  I apologise to the hon. Member for Mid-Staffordshire (Mr. Fabricant), but because the President of the Board of Trade represents a seat in Wigtownshire, I made a slight mistake in appellation.
  I am sorry that the hon. Member for Teignbridge (Mr. Nicholls) has left the Chamber—he certainly entertained us. He took us back to 1979, when the then Prime Minister said, "Crisis, what crisis?" Do hon. Members remember when a newspaper journalist knocked on the door of the hon. Member for Teignbridge to ask about the Register of Members' Interests, and he said, "Consultancy, what consultancy?"
  We have had a fairly even-tempered debate this afternoon, but I place on record my passion. Conservative Members—of very great wealth—speaking today have explained to my constituents and to the majority of people of this country why the life they will face in future will be poorer, meaner and deprived of many rights.
  The President of the Board of Trade referred to Europe, to small businesses and to employees' rights, and he was wrong on every single issue. He was wrong—of all things—in his boast about employment. If one looks at the most recent Economist, one sees that the employment rate is falling in Austria, in Denmark, in France, in Germany, in Holland, in Sweden and in other European Union member states. I would welcome any fall in the unemployment rate in this country or in any other country—but, according to the latest figures, we are currently faced with an increase in unemployment in Britain.
  Mr. Fabricant: The hon. Gentleman is right to point out that, in one month, unemployment has increased, and, like him, I condemn that fact. For those who are now unemployed but who were employed a month ago, it is unfortunate and devastating. Just as the hon. Gentleman condemns that fact, will he welcome the fact that, for the 29 months before that, unemployment decreased, whereas in France, Germany and Spain it increased?
  Mr. MacShane: According to figures provided by the Library of the House of Commons, between February 1991 and February 1996, unemployment increased by 26 per cent. in the south-east, by 56 per cent. in Greater London, by 17 per cent. in the east midlands, and by 9 per cent. in the west midlands. That was the point of my earlier intervention, which the right hon. Member for Northavon (Sir J. Cope) did not quite understand.
  I pointed out that, since 1992, 8.7 million people had lost or exchanged their jobs—obviously, many of those people got new jobs, but all those 8.7 million people spent a period in unemployment. For many of them, the transfer was downwards, to a worse-paying job. I emphasise the point I made: that the laws as they stand have not prevented the small, medium or large firms from laying off, dismissing, making redundant and showing the door to almost 9 million people in recent years.
  The President of the Board of Trade also prayed in aid British inflation rates. Inflation in Britain is significantly higher than in most of our European partner competitors. A long-term perspective ensuring a stable value of the pount is simply not available to the small, medium or large enterprises in this country.
  The social chapter is an outline document, not a detailed blueprint that has been imposed from Brussels on the employers of Finland, on the employers of Greece,

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  on the cork factories of Portugal, on the new state-of-the-art factories being set up in east Germany. There is a paradox. I remember writing in The Guardian on the very morning—
  Mr. Fabricant: For which the hon. Gentleman was paid.
  Mr. MacShane: No, I was not paid for that one.
  On the morning that the Prime Minister proclaimed the social chapter opt-out after Maastricht, I wrote that it would make absolutely no difference. I said that, on the contrary, because Britain's voice would not be heard in the Council meetings where these things are decided, the other member states would go ahead without us—as they have done with the European works council directive and indirectly, through the European Court of Justice, on the 48-hour directive. That is why it is in the interests of British business that we again have our voice heard and our vote counted in the shaping of the social policy of Europe.
  Mr. James Couchman: I should like the hon. Gentleman to clear something up for me about the social chapter. Am I not right in thinking that it is like a skeleton on which flesh is gradually hung—a bit like a Christmas tree on which decorations are added—as burdens are added upon burdens for business? Is it not something that will grow like Topsy? If we are not a part of the Council that is deciding what burdens should be placed on business, that will not be a great disadvantage to our people, because they will not have to take on those burdens.
  Mr. MacShane: The hon. Gentleman referred to Topsy and to Christmas trees—I do not know whether he is the shiny fairy on the top of all this. The assumption that every employer in the rest of Europe—or indeed, the Conservative Governments that govern France and Germany—are somehow left-wing patsies to be pushed over is absolute nonsense. We will get more rulings from Brussels that may affect our business interests negatively if we continue our absurd opt-out.
  Sir John Cope: The hon. Gentleman needs to clarify what he has just said. If the working time directive is held to have been made under health and safety articles, as opposed to the social chapter, we have a voice in it—of course, it is still by majority voting, and we may or may not agree with the particular proposals. In so far as it applies to us—because it is held to apply to health and safety—we shall have a voice in it. The only areas in which we shall not have a voice are those that do not apply to us.
  Mr. MacShane: Given that, in 1876, Benjamin Disraeli—who I think was a Conservative—passed a law introducing the 56-hour week in this country, I find the fuss made over the reduction to a 48-hour week in 1996 absurdly exaggerated. The President of the Board of Trade said that this measure would help small businesses. He is wrong. Since 1979, there have been 450,000 business failures—at the moment, there is one business failure every three minutes of every working day. Since February 1995, 1,000 new statutory instruments have affected small businesses—a new regulatory burden.
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  The Asylum and Immigration Bill, which was debated recently, obliges small businesses to act as unpaid immigration sneaks—they have to check the immigration status of their employees. Self-assessment, to which I referred during an earlier intervention, will impose a massive new burden on small businesses and will cost them—according to Government figures; I was on the Finance and Services Committee that discussed this issue—£130 million a year. The Government claim to be a friend of small business—there is no small business in the country that would accept that nonsense.
  The President of the Board of Trade was also wrong about employee rights. We have to distinguish between the rights that are there to protect small businesses—good small businesses support adequate fire regulation, do not want to produce dirty food and do not want to construct unsafe buildings; those rights need to be enforced and regulated on a partnership basis—and the fundamental rights of citizens that may be taken away.
  Frankly, I did not even understand his speech and the dispute that he is currently having with the Deputy Prime Minister. He talked about increasing conciliation processes. We know that that may open the road to any employee—as is the right of every discontented employee—to appeal to ACAS. I fear that, if one removes existing rights, one will open the way to a lawyer's paradise of judicial appeals and judicial reviews, which might impinge far more heavily on small businesses.
  I do not have time to report, as I had hoped to, many cases from my surgery of people woefully and badly mistreated in terms of their rights at work. I pay a short tribute to the work of citizens advice bureaux, which now are in the front line of representing so many citizens.
  The aspect of workplace rights that most concerns me is race discrimination, on which Britain has a record that other European countries do not. We should be proud of that. Unfortunately, appeals to industrial tribunals on race relations grounds have been increasing. The work of industrial tribunals should be reduced; the number of cases should be reduced as fast as possible. That can be done by moving to a culture of workplace consultation and representation. Rather than causing the return of the feel-good factor, that would create a "feel-fair factor".
  While the President of the Board of Trade, the invisible kilt in the Cabinet, continues to represent two-nation Britain—my goodness, we have heard it tonight—the "feel-fair factor" will not return to our workplaces. When it does, such legislation will not need even to be discussed, because I hope that, in a partnership economy, employers and employees will solve their problems and build together the new firms, the new jobs and the new added value we need to make Britain a great, prosperous and full-employment country again.
  6.21 pm
  Mr. Ian McCartney: Throughout the debate, hon. Members have deployed arguments, some more skilfully than others. My hon. Friends the Members for Islwyn (Mr. Touhig), for Ellesmere Port and Neston (Mr. Miller) and for Rotherham (Mr. MacShane), and the hon. Member for North Devon (Mr. Harvey) have more than adequately put the case about the rights of employees to minimum standards at work.
  There is a clash of cultures—of ideology—because, throughout the debate, Conservative Back Benchers have been trenchant on the issue of burdens rather than the issue of rights.

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  When the President of the Board of Trade wrote a note on 5 March 1996 to the First Secretary of State, which was leaked, was the issue between them that the President of the Board of Trade supported employment rights but the Deputy Prime Minister wanted to withdraw them? There is no disguising the fact that they both want to withdraw the rights.
  The President of the Board of Trade simply did not want the British public and the British work force to know that that was the case, because it would cause a great deal of controversy. Indeed, he said that it would be immensely controversial, and that it would be imprudent to attract criticism. There is no disagreement between one member of the Cabinet and another; the disagreement is only about timing—about when the Government will withdraw the rights of up to 10 million workers in the United Kingdom Labour market.
  When the President of the Board of Trade spoke to the Confederation of British Industry in November 1995, he commented that job insecurity was no more than "a state of mind". That comment proved what we already knew: that the President is a bungler—incompetent, ineffective, uncritical, unthinking, out of touch, and, as the Scott debacle made clear, unable to distinguish between fact, opinion and Government-inspired gossip.
  Three months after the President of the Board of Trade uttered the immortal words
  "Job insecurity is a state of mind",
  a business run by his cousin, Mr. Graeme Lang, went bust with debts of £420,000, leaving seven workers on the dole. A case of "Out of pocket, out of mind."
  The President of the Board of Trade argued that, in the real world, such things are not happening. What kind of real world is he living in? Two days before his speech, it was revealed that 700 jobs were to be lost in MANWEB. Two days after his speech, a survey showed that 9,200 teachers had been made redundant in the summer of 1995. On 24 November, 326 people were made redundant by First Choice Holidays.
  On 12 December, a further 350 job losses were announced at MANWEB. On 16 January, 1,600 job redundancies were announced by Scottish and Newcastle Breweries. On the same day, 220 jobs were lost at Marconi in Chelmsford.
  On 2 February, Hanson announced the loss of 2,300 jobs, with the closure of almost 2,000 Powerhouse stores throughout the UK.
  On 5 February, a further 1,500 jobs were lost. Scottish Widows made 700 people redundant; Amstrad shed 150 jobs; engineering group Suter axed 440 jobs; and Sears announced 300 job losses as it restructured the British Shoe Corporation's control of its retail shopping chain.
  On 13 February, worse was to come. The construction industry forecast another 45,000 job losses this year. That adds to the 460,000 construction jobs that have been lost since 1989.
  In February, the unemployment benefit count increased by 6,800. The latest figures from the National Association of Citizens Advice Bureaux showed that citizens advice bureaux had dealt with more than 669,000
  64
  employment-related problems in the past year, while 91.5 million days were lost in the British economy as a result of stress at work.
  Is the Minister suggesting that those job losses did not take place; that those employment problems did not exist? Was it a fantasy league of redundancies, with the Secretary of State at the top of the league? This is the Mystic Meg economy; every one a winner, irrespective of the evidence. The Secretary of State ploughs on, telling us that insecurity is all in the mind.
  To have one bungler in the Cabinet could be a mistake, to have two sounds a little careless, but to have a full Cabinet of bunglers is not carelessness but a crisis at the heart of the government. That is what we have—a crisis at the heart of government.
  As an economic strategy, for 17 years they have ploughed on with the deregulation of the labour market. Every deregulation caused further job losses. We have had two recessions. Three million jobs have been lost in manufacturing. Forty per cent. of manufacturing capacity has been lost. There are a million fewer jobs than there were in 1990. Still the Government bungle on, repeating that there is no problem—it is all in the minds of British people.
  The Government are careless, not only with statistics, but with the responsibility of developing the economy and providing job security for the British public. If job insecurity, deregulation and exploitation are the key to industrial success, why are the majority of third-world countries in massive debt and massive poverty? Insecurity is not the way to create employment opportunities. Securing employment opportunities for the British worker means investing in training, new technology and new markets. In all those factors, the Government have failed the test; we have lost in each.
  It is not only the President of the Board of Trade; the Deputy Prime Minister is the high priest of job insecurity. In October 1992, he announced plans to close 31 of the 50 British collieries. In the event, 36 of the 50 ceased production. Thirty thousand jobs were lost directly, and 26,000 were lost in associated industries. Constituencies such as mine, in which mining had been important, were left to get on with the task of reconstruction. They were alienated and left on their own because of the ideology of the deregulation of the electricity and gas industries.
  What has happened since the electricity and gas industries were privatised? The number of directors has increased by 21 per cent. and total boardroom pay is up by a staggering 571 per cent. The Government allow that excess, but contend that people on £2.50 an hour or less should not have a national minimum wage. Between them, the gas and electricity industries have sacked 61,000 workers in the period during which they increased boardroom pay by 571 per cent. Boom in the boardroom; bust for the work force.
  The Tories claim to be friends of small business— a claim as hollow as their promises to cut tax and reduce crime and to be the party of family values. Since the Conservatives came to power in 1979, 450,253 businesses have failed, including more than 200,000 since the last general election. The Prime Minister said:
  "Vote Tory on Thursday and the recovery begins on Friday."
  The President of the Board of Trade did not answer the question I asked him, so I ask him again. Will he apologise for the fact that 141 small businesses have

  65
  failed every day since the Government were re-elected? They are the Government of small businesses. No doubt, since the debate started, 141 small businesses will have gone down, and 141 will do so tomorrow and 141 the day after. That will continue until we have a Government who are better at investing in and developing our economy.
  Business failures on such a scale lead not only to joblessness but to homelessness. Since the Prime Minister took office, the homes of a third of a million people have been repossessed; 1,000 homes are repossessed every week. The homes of 325,000 families have been taken from them since the Prime Minister came to power, and more than 420,000 people are currently more than three months in arrears with their mortgages. Under the present Government, people lose not only their jobs but their homes—but, according to the President of the Board of Trade, it is all in the mind.
  We have been here before. Rights have been removed to promote an "economic miracle". Regulations covering the working week of women were removed; young workers lost the right to wages council protection before the rest of the nation; laws protecting young people from working long hours were repealed. Did that result in an economic miracle? Hardly: it was followed by the second recession in a decade.
  Mr. John M. Taylor: The hon. Gentleman is right to point out that the rate of closure of small businesses is quite surprising. In the name of fairness, however, let me point out that what is more surprising is the rate of new business starts, which, in net terms, is higher. Moreover, not all closures represent failures; they are often due to amalgamations.
  Mr. McCartney: The Minister will tell us next that losing a job is not a disaster but an opportunity. The Government find phraseology with which to say, in a language that no one else understands, that we are not experiencing a crisis. Suddenly, it appears that 141 businesses did not fail; they amalgamated because they were so successful. In fact, the Government have put small businesses on the rack—and, having been put on the rack, a record number of those businesses have snapped. No Government in history have allowed so many companies to fail, and done nothing about it.
  Only in the run-up to the general election are the Government scurrying around to try to protect their base vote in the small business community. Only now are they prepared even to concede that there is a problem in the development of small businesses. The creation of such businesses with medium and long-term strategies does not mean success; ultimately, it means that a huge proportion will fail.
  Let me return to the so-called economic miracle. What the Government proposed in the letter from the Deputy Prime Minister is what they did in the 1980s, and they want to do the same in the 1990s. What has the "miracle" given us? Eleven million people have endured at least one spell of unemployment since the Prime Minister took office—one in five households in England. Not a family in England, Scotland, Northern Ireland and Wales does not have a member, friend or acquaintance who has become unemployed under the Government's economic policies.
  That is why insecurity is so feared in every part of the land. People know from observation and experience that, under the present Government, they are as likely to lose
  66
  their jobs as to keep them. More important, those who lose their jobs have only one chance in three of regaining full-time employment. An increasing number of those who are being locked out of the labour market can return to that market only by taking temporary, part-time or low-paid jobs—and the Government wonder why there is no feel-good factor.
  Since the last general election in April 1992, 8.7 million people have been unemployed at least once; yet the Government continue to say that it is all in the mind. The evidence against their proposals is overwhelming. Precarious employment has a negative effect on employee commitment, innovation, flexibility and loyalty: the four key factors that would ensure success for small and medium-sized enterprises are being attacked by the Government's attitude to the labour market.
  The Tory approach leads to high turnover and an inability to recoup investment in training. The Government are attacking the employment rights of employees in small firms, and their excuse that they are removing burdens from business is revealed as nothing more than a sham. Their real intention is further to undermine fairness at work.
  Will the Minister tell us which of the following measures is a burden on business, and which is the right of employees? It is a legitimate question: in his letter to the Deputy Prime Minister, the President of the Board of Trade said that he wanted Law Officers to examine some of the issues involved, and that he had grave doubts about the wisdom of making any announcement. In fact, he had grave doubts about the removal of rights of access to tribunals from individuals working for small companies.
  At present, such individuals have the right not to be unfairly dismissed on medical grounds relating to health and safety. Is that at risk? They have the right to receive redundancy payments. Is that at risk? Safety representatives have the right to paid time off. Is that at risk? There is the right to time off for public duties. Will that right be removed?
  Will the Government remove the right of shopworkers not to be dismissed or made redundant for refusing to work on Sundays, or the right to receive a written statement of reasons for dismissal? Will the Minister tell us how the right to discriminate against workers who are black, who are women or who are married will increase competitiveness?
  Those measures are all covered by industrial tribunals. If the rights that I have listed are not those that the Government plan to withdraw, perhaps the Minister will tell us what the intentions were of the President of the Board of Trade and the Deputy Prime Minister. What were the concerns of the President of the Board of Trade when he went to the Cabinet and the Cabinet decided not to make an announcement at the press conference that was held to assess the state of small businesses?
  The leaked proposals of the Deputy Prime Minister caused uproar. An opinion poll of nearly 1,000 people, commissioned from NOP by the TUC, found that 85 per cent. of the British public thought it wrong for the Government to consider abolishing the employment rights of people working in small firms. Even Tory supporters waded in with a barrage of protests: 78 per cent. of those who voted Tory at the last election said that the Government were wrong to consider such plans. It is not

  67
  all in those people's minds; they know that insecurity at work is a plague that will affect everyone in the labour market if the Government continue in office.
  The next Labour Government will give a commitment that all employees—whether full or part-time, permanent, casual or temporary, including those who work at home— will be entitled to basic standards at work from day one of their employment. A major employment right, from the first day in a job, will be the right to earn a national minimum wage. We will build an economy based on partnership, and we will promote the interests of good rather than bad employers. Good employers are fed up with being told to compete through low pay, poor conditions and contempt for their employees.
  We will establish a fair framework of rights, to be exercised collectively or individually, to give the work force a strategic involvement in the development of companies. We will work with social partners to promote good practice, and develop methods to allow good employers to prosper in difficult markets. That is a vastly different agenda from the one that the present Government are offering the British people. The Government have shown tonight, as they have shown for the past two or three years, that they are sleazy, greedy and bungling. The only way in which to restore the feel-good factor is to elect a Labour Government at the next election. Let us start that process this evening, by passing the motion.
  6.37 pm
  The Minister for Competition and Consumer Affairs (Mr. John M. Taylor): It falls to me to reply to the debate, overwhelmed though I am by the presence of no fewer than six Labour Back Benchers.
  The hon. Member for Oldham, West (Mr. Meacher) gave the impression of a man looking down the wrong end of a telescope. We have a balanced labour market, the lowest rate of strikes for 100 years and a staggeringly successful rate of inward investment. Just as Jacques Delors predicted, Britain will become a paradise for inward investment. That is possibly the only instance of my agreeing with Jacques Delors, from whom I shall now distance myself by saying that I have personally employed every number of employees between one and 12. I doubt whether Jacques Delors can say that, and I doubt whether the hon. Member for Oldham, West or the hon. Member for Makerfield (Mr. McCartney) can say it, either. Nor, if I may humbly say so, can I have been a bad employer, as my personal secretary is still with me after 25 years— a silver jubilee of which I am very proud.
  Mr. Ian McCartney: For the record, all hon. Members are small employers because we all employ staff—and some of us try to be good small employers. I have also been a company director, with responsibility for employing staff and managing a large budget. I know how industry works—that is why I have this shadow portfolio and why I shall be at the Government Dispatch Box in a few months' time and the hon. Gentleman will be in opposition.
  Mr. Taylor: That interesting intervention does little to advance the debate. My right hon. Friend the President of
  68
  the Board of Trade covered a wide range of subjects, but in particular he anticipated draft legislation that will introduce greater versatility in industrial disputes, claims and complaints. I invite Labour Members to support the Green Paper—not least the hon. Member for Ellesmere Port and Neston (Mr. Miller), who I am sure has read it— and the draft legislation which the hon. Gentleman, like me, has not yet read.
  Mr. Miller: Does the Minister expect me to support it without looking at it?
  Mr. Taylor: No, I expect the hon. Gentleman to support the Green Paper and I ask him to join me in anticipating the draft legislation.
  Listening to the speech by the hon. Member for Islwyn (Mr. Touhig), I felt a sense of deja vu of a Friday not long ago. However, I shall not be drawn into a collateral debate about his private Member's Bill, and I do not think that he seriously expects me to do so.
  My right hon. Friend the Member for Northavon (Sir J. Cope) reminded the House that the culture of small businesses is necessarily different from that of large firms, such as Land Rover in my constituency where productivity is at record levels. So far as I can tell, the company's industrial relations are good and the employees on the shop floor suggest many good ideas for best practice.
  My right hon. Friend made many good points in his speech, drawing from his considerable experience, particularly as Minister with responsibility for small businesses. He congratulated my right hon. Friend the President of the Board of Trade on his initiative regarding small firm conferences. He said that he approved of introducing draft Bills and releasing Green Papers in the interests of good, well-developed legislation which can be considered in parallel by those who have to work with and under it. Having expressed his approval of draft legislation, he was not quite so approving of lawyers, but I can probably live with that stance for the time being.
  The hon. Member for North Devon (Mr. Harvey) picked up the Oldham, West telescope and he, too, looked down the wrong end of it. He maintained that employees' rights should not be confused with burdens on business. He may be confused about the matter, but the Government are clear about seeking to balance fairly the interests of employers and of employees. There is evidence that we have been successful in terms of job satisfaction and the least number of strikes for 100 years.
  I was pleasantly surprised to hear the hon. Gentleman concede that he considers privatisation of Land Rover to be a virtue. I thank him for those comments, but I shall develop another point concerning an unsung virtue of privatisation. The hon. Gentleman was perfectly correct in asking what business the Government have in making motor cars, and I agree with him completely. An unsung virtue of privatisation is that, as large numbers of workers in the former nationalised industries move from the public sector into the private sector, the possibility of politically motivated strikes against a Government proprietor no longer exists. I think that that is one of the healthiest developments associated with privatisation, and it has improved industrial relations at Land Rover beyond all recognition.
  My hon. Friend the Member for Teignbridge (Mr. Nicholls) reminded the House of the vivid realities of life under the last Labour Government. He also

  69
  reminded us also that the hon. Member for Oldham, West was collectively responsible for that nightmare of discontent. My hon. Friend correctly pointed out that a range of proper, unnegotiable rights are at work in this country and he gave a litany of them. Drawing from his experience as an employer, he informed the House of the realities of the workplace, including hours of work. He made a very telling speech.
  The hon. Member for Ellesmere Port and Neston spoke of his experience of industrial tribunals and he pronounced a role for mediation. He mused about what hon. Members make, or would make, of the word "mediation". I welcome it and I believe that it has a place in matrimonial law—although we are not debating that subject tonight—as well as in industrial law. It is a felicitous word, because it does not imply that the process intends to join things or to part them: it merely suggests that two sides are invited to talk and, if that leads to convergence, so much the better.
  Mr. Miller: Does the Minister agree that the resources of the Advisory, Conciliation and Arbitration Service should be expanded?
  Mr. Taylor: The hon. Gentleman anticipates a point that I shall make shortly in my speech. If he will forgive me, I shall reach it in due course. I noted that point in his speech and I acknowledge that it should be addressed.
  The hon. Gentleman talked also about the changing world of employment, but he may have made a false point about the advisory role of AC AS. He said that AC AS should be resourced to provide an advice function to employers about handling disputes. It is important to remember that ACAS's conciliation role requires it to maintain its independence from either side in an industrial rights dispute. That independence would be put at risk if ACAS were given an advisory function in that area. However, ACAS's public inquiry points give information about the law.
  The hon. Gentleman spoke also about an opinion survey carried out by his union—which I think that he said is the MFI—
  Mr. Miller:MSF.
  Mr. Taylor: I apologise to the hon. Gentleman if I do not have the correct acronym: I withdraw it.
  He referred to the opinion survey that dwelt upon insecurity—a subject that is fashionable these days with Opposition Members. The worst form of insecurity is unemployment and jobs will be created only if British industry is efficient and competitive. Flexibility— including pay flexibility—is an important factor in achieving that. Rigid pay systems take little account of business performance or labour market conditions. Such inflexibility jeopardises competitiveness, investment and jobs. A national minimum wage would be a major destroyer of jobs.
  Mr. MacShane: If a minimum wage destroys jobs, how is it that so many jobs are being created in America, where there is one, or in Taiwan, which is a full employment economy?
  Mr. Taylor: Because it is pitched at a very low level indeed. If the hon. Gentleman and Opposition Front
  70
  Bench Members would come clean with the House and acknowledge that it is Labour policy to set a national minimum wage—regardless of local variations in the economy—at £4.15 an hour, we could start talking about its effect on employment, the economy and jobs. It will have a very deleterious effect on jobs and particularly on those who are most vulnerable—young people and those still training.
  It does not stop there. Fixing a national minimum wage creates a group of people whose earnings are just above it and who wish to have their differentials restored. That is the secondary effect of a national minimum wage and the damage that it would cause to the economy.
  Flexible pay has mutual benefits. It can help to improve business performance and it can mean better pay for employees as a result of increased efficiency. It can also help employees to feel properly valued and give them a sense of ownership over their pay.
  The DTI booklet "The Rewards of Success", published last month, contains a number of case studies of flexible pay systems in Britain. Employers have increasingly recognised the need for flexible pay systems. For example, a survey of employers just published by the Industrial Society found that nearly all respondents had some flexible pay arrangements. Nearly two thirds operated monetary bonuses or incentives to reward individuals; more than half operated performance-related pay and just under a third had profit-related pay.
  My hon. Friend the Member for Mid-Staffordshire (Mr. Fabricant) abandoned his usual shyness and told us some interesting facts about the building up of his business in the radio and communications world. He drew some American comparisons, but more than once—rightly, in my view—he spoke of balance and the need to recognise an obligation to the unemployed in seeking to strike that balance. He also told us in no mean terms what he thought about the social chapter. He doubted whether there was any difference between old Labour and new Labour. Having heard the closing speech from the Opposition Front Bench, I am disposed absolutely to agree. He despaired of the same old arguments for high inflation, high unemployment and deteriorating industrial relations.
  The hon. Member for Rotherham (Mr. MacShane) recalled how the works council directive had been adopted in the rest of the European Union. I have to tell him something about that. The voice of business was opposed to the works council directive throughout the 15 member countries, but only in the United Kingdom did the political and ministerial voice and action follow the business voice. The Government have been faithful to their business interests.
  The hon. Gentleman paid tribute to the citizens advice bureaux. Having helped to start a citizens advice bureau in 1973, I join him in that tribute, and it is a source of modest pride to me that, 23 years later, I am still president of that citizens advice bureau.
  The hon. Member for Rotherham said that the opt-out from the social chapter makes no difference because European employers will go ahead without us. I find that difficult to understand. Without the opt-out, many more United Kingdom-based companies would have been caught by the works council directive because employees here would have counted towards the directive's thresholds. They are now completely excluded. The opt-out also means that United Kingdom employers will

  71
  not have to apply provisions on paternity leave, assuming that the social partners agreement is adopted as a directive of 14 member states.
  The hon. Member for Makerfield spoke of a clash of ideology between the two sides of the House and returned to the confusion between rights and burdens—or at least the confusion in his mind. It is our view that employers and employees have their considerations, as do the unemployed—a point returned to often by Conservative Members—and that employers, employees and the unemployed need to have their rights taken into account, balanced and recognised. Nor is it a coincidence that we now have the lowest level of strikes for 100 years, which is hardly a symptom of tyranny in the workplace. I should also tell the hon. Gentleman that 50 per cent. of people who lose their jobs are no longer on the unemployment register within three months.
  The hon. Member for Makerfield spoke of a national minimum wage. The Labour party—old or new—still will not come clean on that. Do the Opposition intend to leave us at this unfinished stage of the debate with the impression that their national minimum wage will indeed be national and will apply in the north-east the same as in the south-east, the south-west and the midlands?
  We have had a lively debate and I have listened carefully to all the points that have been raised. I congratulate my hon. Friends on their thoughtful and constructive contributions. By contrast, Opposition Members have seemingly paid no heed to the speech of my right hon. Friend the President of the Board of Trade and have continued to promote a gross distortion of the Government's policies and intentions.
  I repeat that we fully recognise the legitimate entitlement of employees to a minimum level of statutory safeguards against unreasonable treatment by their employers. There exists a comprehensive framework of employment protection legislation designed to secure that entitlement and I can reassure all hon. Members that we have no plans whatever for dismantling that framework. However, it would be of absolutely no benefit to employees—and certainly not to job seekers— if businesses were weighed down with unreasonable legislative restrictions which constrained their competitiveness, damaged their profitability and destroyed job opportunities. That is why, since 1979, we have pursued a policy of appropriate deregulation in those matters.
  Mr. Ian McCartney: Before the Minister sits down, will he tell the House which rights that people have at present they will no longer have under the Government's proposals? He has given us no information whatever other than generalisations. Which specific rights will be lost under the Government's proposals?
  Mr. Taylor: I will not answer the hon. Gentleman in those terms because that is a false question. The Government live in a veritable millrace of ideas, particularly as we have invited small businesses to give us their ideas in conferences, and they are worth considering. It is no use asking firms for their ideas and then dismissing them out of hand. There is no shortage of ideas, and so far as I can tell they have come to us in
  72
  good faith. All are worth considering, and some may be worthy and require legal advice.
  The Government are not ruling anything in or ruling anything out. We are pleased consistently to receive ideas and we evaluate them. Ideas that survive that process and look fruitful can be candidates for further implementation down the line, after the fullest consultation. That is the proper answer to the hon. Gentleman's question.
  Mr. McCartney rose—
  Mr. Taylor: I said that I was giving way for the last time. With only a minute or two left, I intend to draw my remarks to a conclusion.
  The measures that we have taken include increasing the qualifying conditions. In unfair dismissal cases, we have removed from employers the burden of proof and made the balance neutral between the parties. In deciding such cases, industrial tribunals are now required to take into account the size of a business and its administrative resources. Furthermore, we have extended the scope for costs to be awarded in tribunal cases against parties who act frivolously, vexatiously, abusively, disruptively or otherwise unreasonably. Our current proposals for reform of the industrial tribunal system mentioned by my right hon. Friend will continue the process of sensible improvement. They have been widely welcomed.
  A balance must be struck between safeguarding the legitimate interests of employees and placing administrative and other cost burdens on employers. That commitment to a balanced approach has always been and remains at the heart of our policies. I urge the House to resist the Opposition motion and to support the Government amendment.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 237, Noes 284

  Division No. 78]

  [7.00 pm

  AYES

  Ainger, Nick

  Campbell, Ronnie (Blyth V)

  Ainsworth, Robert (Cov'try NE)

  Campbell-Savours, D N

  Allen, Graham

  Canavan, Dennis

  Anderson, Donald (Swansea E)

  Cann, Jamie

  Armstrong, Hilary

  Carlile, Alexander (Montgomery)

  Ashton, Joe

  Chidgey, David

  Austin-Walker, John

  Chisholm, Malcolm

  Banks, Tony (Newham NW)

  Church, Judith

  Barron, Kevin

  Clapham, Michael

  Battle, John

  Clark, Dr David (South Shields)

  Beckett, Rt Hon Margaret

  Clarke, Eric (Midlothian)

  Beith, Rt Hon A J

  Clarke, Tom (Monklands W)

  Bennett, Andrew F

  Clwyd, Mrs Ann

  Benton, Joe

  Coffey, Ann

  Bermingham, Gerald

  Cohen, Harry

  Berry, Roger

  Cook, Frank (Stockton N)

  Betts, Clive

  Corbett, Robin

  Blunkett, David

  Corbyn, Jeremy

  Boateng, Paul

  Cousins, Jim

  Bradley, Keith

  Cunliffe, Lawrence

  Bray, Dr Jeremy

  Cunningham, Jim (Covy SE)

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

  Cunningham, Rt Hon Dr John

  Bruce, Malcolm (Gordon)

  Dafis, Cynog

  Burden, Richard

  Dalyell, Tam

  Byers, Stephen

  Davidson, Ian

  Caborn, Richard

  Davies, Bryan (Oldham C'tral)

  Campbell, Mrs Anne (C'bridge)

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

  Campbell, Menzies (Fife NE)

  Davies, Rt Hon Denzil (Llanelli)

  73

  Davies, Ron (Caerphilly)

  McAllion, John

  Denham, John

  McCartney, Ian

  Dixon, Don

  McCartney, Robert

  Dobson, Frank

  Macdonald, Calum

  Donohoe, Brian H

  McFall, John

  Dowd, Jim

  McKelvey, William

  Dunwoody, Mrs Gwyneth

  Mackinlay, Andrew

  Eagle, Ms Angela

  McLeish, Henry

  Eastham, Ken

  McMaster, Gordon

  Etherington, Bill

  McNamara, Kevin

  Evans, John (St Helens N)

  MacShane, Denis

  Fatchett, Derek

  McWilliam, John

  Faulds, Andrew

  Madden, Max

  Field, Frank (Birkenhead)

  Maddock, Diana

  Fisher, Mark

  Mahon, Alice

  Flynn, Paul

  Mandelson, Peter

  Foster, Rt Hon Derek

  Marek, Dr John

  Foster, Don (Bath)

  Marshall, David (Shettleston)

  Fyfe, Maria

  Martin, Michael J (Springburn)

  Galbraith, Sam

  Martlew, Eric

  Galloway, George

  Maxton, John

  Gapes, Mike

  Meacher, Michael

  Garrett, John

  Meale, Alan

  George, Bruce

  Michael, Alun

  Gerrard, Neil

  Michie, Bill (Sheffield Heeley)

  Gilbert, Rt Hon Dr John

  Michie, Mrs Ray (Argyll & Bute)

  Godman, Dr Norman A

  Milburn, Alan

  Godsiff, Roger

  Miller, Andrew

  Golding, Mrs Llin

  Mitchell, Austin (Gt Grimsby)

  Graham, Thomas

  Moonie, Dr Lewis

  Grant, Bernie (Tottenham)

  Morgan, Rhodri

  Griffiths, Nigel (Edinburgh S)

  Morley, Elliot

  Griffiths, Win (Bridgend)

  Morris, Rt Hon Alfred (Wy'nshawe)

  Gunnell, John

  Morris, Estelle (B'ham Yardley)

  Hain, Peter

  Mowlam, Marjorie

  Hall, Mike

  Mudie, George

  Hanson, David

  Mullin, Chris

  Harman, Ms Harriet

  Nicholson, Emma (Devon West)

  Harvey, Nick

  Oakes, Rt Hon Gordon

  Hattersley, Rt Hon Roy

  O'Brien, Mike (N W'kshire)

  Heppell, John

  O'Brien, William (Normanton)

  Hill, Keith (Streatham)

  O'Hara, Edward

  Hinchliffe, David

  Olner, Bill

  Hodge, Margaret

  O'Neill, Martin

  Hoey, Kate

  Parry, Robert

  Hogg, Norman (Cumbernauld)

  Pearson, Ian

  Home Robertson, John

  Pendry, Tom

  Hoon, Geoffrey

  Pickthall, Colin

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

  Pike, Peter L

  Howarth, George (Knowsley North)

  Pope, Greg

  Howells, Dr Kim (Pontypridd)

  Powell, Ray (Ogmore)

  Hoyle, Doug

  Prentice, Bridget (Lew'm E)

  Hughes, Robert (Aberdeen N)

  Prentice, Gordon (Pendle)

  Hughes, Roy (Newport E)

  Primarolo, Dawn

  Hughes, Simon (Southwark)

  Randall, Stuart

  Jackson, Glenda (H'stead)

  Raynsford, Nick

  Jackson, Helen (Shef'ld, H)

  Rendel, David

  Jamieson, David

  Robinson, Geoffrey (Co'try NW)

  Janner, Greville

  Roche, Mrs Barbara

  Jones, Barry (Alyn and D'side)

  Rogers, Allan

  Jones, Ieuan Wyn (Ynys Môn)

  Ross, William (E Londonderry)

  Jones, Jon Owen (Cardiff C)

  Rowlands, Ted

  Jones, Lynne (B'ham S O)

  Ruddock, Joan

  Jowell, Tessa

  Sedgemore, Brian

  Kaufman, Rt Hon Gerald

  Sheerman, Barry

  Keen, Alan

  Sheldon, Rt Hon Robert

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

  Shore, Rt Hon Peter

  Kilfoyle, Peter

  Short, Clare

  Lestor, Joan (Eccles)

  Simpson, Alan

  Liddell, Mrs Helen

  Skinner, Dennis

  Litherland, Robert

  Smith, Andrew (Oxford E)

  Livingstone, Ken

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

  Lloyd, Tony (Stretford)

  Smith, Llew (Blaenau Gwent)

  Llwyd, Elfyn

  Smyth, The Reverend Martin

  Loyden, Eddie

  Snape, Peter

  Lynne, Ms Liz

  Soley, Clive

  74

  Spearing, Nigel

  Walker, Rt Hon Sir Harold

  Spellar, John

  Walley, Joan

  Squire, Rachel (Dunfermline W)

  Wardell, Gareth (Gower)

  Steinberg, Gerry

  Wareing, Robert N

  Stott, Roger

  Watson, Mike

  Strang, Dr. Gavin

  Wicks, Malcolm

  Wigley, Dafydd

  Sutcliffe, Gerry

  Williams, Rt Hon Alan (Sw'n W)

  Taylor, Mrs Ann (Dewsbury)

  Williams, Alan W (Carmarthen)

  Taylor, Matthew (Truro)

  Wise, Audrey

  Timms, Stephen

  Worthington, Tony

  Tipping, Paddy

  Wray, Jimmy

  Touhig, Don

  Wright, Dr Tony

  Trickett, Jon

  Turner, Dennis

  Tellers for the Ayes:

  Tyler, Paul

  Mr. John Cummings and

  Vaz, Keith

  Ms Janet Anderson.

  NOES

  Ainsworth, Peter (East Surrey)

  Cope, Rt Hon Sir John

  Alexander, Richard

  Cormack, Sir Patrick

  Alison, Rt Hon Michael (Selby)

  Couchman, James

  Allason, Rupert (Torbay)

  Cran, James

  Amess, David

  Curry, David (Skipton & Ripon)

  Ancram, Rt Hon Michael

  Davis, David (Boothferry)

  Arbuthnot, James

  Day, Stephen

  Arnold, Jacques (Gravesham)

  Deva, Nirj Joseph

  Arnold, Sir Thomas (Hazel Grv)

  Devlin, Tim

  Ashby, David

  Dicks, Terry

  Atkins, Rt Hon Robert

  Dorrell, Rt Hon Stephen

  Atkinson, Peter (Hexham)

  Douglas-Hamilton, Lord James

  Baker, Rt Hon Kenneth (Mole V)

  Dover, Den

  Baker, Nicholas (North Dorset)

  Duncan-Smith, Iain

  Banks, Matthew (Southport)

  Dunn, Bob

  Banks, Robert (Harrogate)

  Durant, Sir Anthony

  Bates, Michael

  Eggar, Rt Hon Tim

  Batiste, Spencer

  Elletson, Harold

  Bellingham, Henry

  Emery, Rt Hon Sir Peter

  Bendall, Vivian

  Evans, David (Welwyn Hatfield)

  Beresford, Sir Paul

  Evans, Jonathan (Brecon)

  Biffen, Rt Hon John

  Evans, Nigel (Ribble Valley)

  Body, Sir Richard

  Evans, Roger (Monmouth)

  Bonsor, Sir Nicholas

  Evennett, David

  Booth, Hartley

  Faber, David

  Boswell, Tim

  Fabricant, Michael

  Bottomley, Peter (Eltham)

  Fenner, Dame Peggy

  Bottomley, Rt Hon Virginia

  Field, Barry (Isle of Wight)

  Bowis, John

  Fishburn, Dudley

  Boyson, Rt Hon Sir Rhodes

  Forman, Nigel

  Brandreth, Gyles

  Forth, Eric

  Brazier, Julian

  Fowler, Rt Hon Sir Norman

  Bright, Sir Graham

  Fox, Dr Liam (Woodspring)

  Brooke, Rt Hon Peter

  Fox, Rt Hon Sir Marcus (Shipley)

  Brown, M (Brigg & Cl'thorpes)

  Freeman, Rt Hon Roger

  Browning, Mrs Angela

  French, Douglas

  Bruce, Ian (South Dorset)

  Fry, Sir Peter

  Budgen, Nicholas

  Gale, Roger

  Burns, Simon

  Gallie, Phil

  Burt, Alistair

  Gardiner, Sir George

  Butcher, John

  Garnier, Edward

  Butler, Peter

  Gill, Christopher

  Butterfill, John

  Gillan, Cheryl

  Carlisle, John (Luton North)

  Goodlad, Rt Hon Alastair

  Carlisle, Sir Kenneth (Lincoln)

  Goodson-Wickes, Dr Charles

  Cash, William

  Gorman, Mrs Teresa

  Channon, Rt Hon Paul

  Gorst, Sir John

  Chapman, Sir Sydney

  Grant, Sir A (SW Cambs)

  Churchill, Mr

  Greenway, Harry (Ealing N)

  Clappison, James

  Greenway, John (Ryedale)

  Clark, Dr Michael (Rochford)

  Griffiths, Peter (Portsmouth, N)

  Clifton-Brown, Geoffrey

  Grylls, Sir Michael

  Coe, Sebastian

  Hague, Rt Hon William

  Colvin, Michael

  Hamilton, Rt Hon Sir Archibald

  Congdon, David

  Hamilton, Neil (Tatton)

  Coombs, Anthony (Wyre For'st)

  Hampson, Dr Keith

  Coombs, Simon (Swindon)

  Hanley, Rt Hon Jeremy

  75

  Hannam, Sir John

  MacGregor, Rt Hon John

  Hargreaves, Andrew

  MacKay, Andrew

  Haselhurst, Sir Alan

  Maclean, Rt Hon David

  Hawkins, Nick

  McLoughlin, Patrick

  Hawksley, Warren

  McNair-Wilson, Sir Patrick

  Hayes, Jerry

  Malone, Gerald

  Heald, Oliver

  Mans, Keith

  Heathcoat-Amory, Rt Hon David

  Marland, Paul

  Hendry, Charles

  Marshall, John (Hendon S)

  Heseltine, Rt Hon Michael

  Martin, David (Portsmouth S)

  Hill, James (Southampton Test)

  Mates, Michael

  Hogg, Rt Hon Douglas (G'tham)

  Mawhinney, Rt Hon Dr Brian

  Horam, John

  Mayhew, Rt Hon Sir Patrick

  Hordern, Rt Hon Sir Peter

  Mellor, Rt Hon David

  Howell, Rt Hon David (G'dford)

  Merchant, Piers

  Howell, Sir Ralph (N Norfolk)

  Mills, Iain

  Hughes, Robert G (Harrow W)

  Mitchell, Andrew (Gedling)

  Hunt, Rt Hon David (Wirral W)

  Mitchell, Sir David (NW Hants)

  Hunt, Sir John (Ravensbourne)

  Moate, Sir Roger

  Hunter, Andrew

  Monro, Rt Hon Sir Hector

  Hurd, Rt Hon Douglas

  Montgomery, Sir Fergus

  Jack, Michael

  Needham, Rt Hon Richard

  Jackson, Robert (Wantage)

  Nelson, Anthony

  Jenkin, Bernard

  Neubert, Sir Michael

  Jessel, Toby

  Newton, Rt Hon Tony

  Johnson Smith, Sir Geoffrey

  Nicholls, Patrick

  Jones, Gwilym (Cardiff N)

  Norris, Steve

  Jones, Robert B (W Hertfdshr)

  Onslow, Rt Hon Sir Cranley

  Jopling, Rt Hon Michael

  Oppenheim, Phillip

  Kellett-Bowman, Dame Elaine

  Ottaway, Richard

  Key, Robert

  Page, Richard

  King, Rt Hon Tom

  Paice, James

  Kirkhope, Timothy

  Patnick, Sir Irvine

  Knapman, Roger

  Patten, Rt Hon John

  Knight, Mrs Angela (Erewash)

  Pattie, Rt Hon Sir Geoffrey

  Knight, Rt Hon Greg (Derby N)

  Pawsey, James

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

  Peacock, Mrs Elizabeth

  Lait, Mrs Jacqui

  Pickles, Eric

  Lamont, Rt Hon Norman

  Porter, Barry (Wirral S)

  Lang, Rt Hon Ian

  Porter, David (Waveney)

  Lawrence, Sir Ivan

  Portillo, Rt Hon Michael

  Legg, Barry

  Powell, William (Corby)

  Leigh, Edward

  Rathbone, Tim

  Lennox-Boyd, Sir Mark

  Redwood, Rt Hon John

  Lester, Sir James (Broxtowe)

  Richards, Rod

  Lidington, David

  Riddick, Graham

  Lilley, Rt Hon Peter

  Rifkind, Rt Hon Malcolm

  Lloyd, Rt Hon Sir Peter (Fareham)

  Robathan, Andrew

  Lord, Michael

  Roberts, Rt Hon Sir Wyn

  Luff, Peter

  Robertson, Raymond (Ab'd'n S)

  Lyell, Rt Hon Sir Nicholas

  Robinson, Mark (Somerton)

  76

  Roe, Mrs Marion (Broxbourne)

  Thomason, Roy

  Rowe, Andrew (Mid Kent)

  Thompson, Sir Donald (C'er V)

  Rumbold, Rt Hon Dame Angela

  Thompson, Patrick (Norwich N)

  Sackville, Tom

  Thornton, Sir Malcolm

  Sainsbury, Rt Hon Sir Timothy

  Townend, John (Bridlington)

  Scott, Rt Hon Sir Nicholas

  Townsend, Cyril D (Bexl'yh'th)

  Shaw, David (Dover)

  Tracey, Richard

  Shaw, Sir Giles (Pudsey)

  Trend, Michael

  Shephard, Rt Hon Gillian

  Twinn, Dr Ian

  Shepherd, Sir Colin (Hereford)

  Vaughan, Sir Gerard

  Shepherd, Richard (Aldridge)

  Viggers, Peter

  Shersby, Sir Michael

  Waldegrave, Rt Hon William

  Sims, Roger

  Walden, George

  Skeet, Sir Trevor

  Walker, Bill (N Tayside)

  Soames, Nicholas

  Waller, Gary

  Speed, Sir Keith

  Ward, John

  Spencer, Sir Derek

  Wardle, Charles (Bexhill)

  Spicer, Sir James (W Dorset)

  Waterson, Nigel

  Spicer, Sir Michael (S Worcs)

  Watts, John

  Spink, Dr Robert

  Wells, Bowen

  Spring, Richard

  Whitney, Ray

  Sproat, Iain

  Whittingdale, John

  Squire, Robin (Hornchurch)

  Widdecombe, Ann

  Stanley, Rt Hon Sir John

  Wiggin, Sir Jerry

  Steen, Anthony

  Wilkinson, John

  Stephen, Michael

  Willetts, David

  Stern, Michael

  Wilshire, David

  Stewart, Allan

  Winterton, Mrs Ann (Congleton)

  Streeter, Gary

  Winterton, Nicholas (Macc'f'ld)

  Sumberg, David

  Wolfson, Mark

  Sweeney, Walter

  Yeo, Tim

  Sykes, John

  Young, Rt Hon Sir George

  Tapsell, Sir Peter

  Taylor, John M (Solihull)

  Tellers for the Noes:

  Taylor, Sir Teddy (Southend, E)

  Mr. Timothy Wood and Mr. Derek Conway.

  Temple-Morris, Peter

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
  MADAM DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House recognises the vital contributions of small firms to economic and employment growth, and supports the Government's policies to minimise legislative burdens on this sector while maintaining a fair balance with the rights of employees.

  HMSO (Privatisation)
  Madam Deputy Speaker (Dame Janet Fookes): Madam Speaker has selected the amendment in the name of the Prime Minister.
  7.13 pm
  Mr. Derek Foster: I beg to move,
  That this House, notwithstanding the guarantees sought by Madam Speaker in her letter to the Leader of the House dated 28th November 1995, Official Report, 11th December 1995, columns 455, 456 and 457 and the assurances given by the Chancellor of the Duchy of Lancaster in his reply placed in the Library on 14th December 1995, believes that the privatisation of HMSO so risks the standard of service to the House and to Members of Parliament, and so dilutes ministerial accountability to the House for those services, that it should not proceed until further consideration after the next general election.
  I must tell the Chancellor of the Duchy of Lancaster that it is a shame that the Labour party has had to ask for this debate at all. I remind the House of the statement by the Chancellor in the November 1995 issue of "Public Sector Purchasing" that the new arrangements for HMSO would not proceed without parliamentary approval. What could that possibly mean except that there would be a debate with a vote in both Houses of Parliament?
  The House will have seen early-day motion 331, tabled by my hon. Friend the Member for Norwich, South (Mr. Garrett), two Chairs of House domestic Committees, the chair of the parliamentary Labour party, and the Whip or leader of every Opposition party in the House, calling for this privatisation not to proceed without a debate and a vote.
  In January this year, I wrote to the Chancellor, sending him a copy of the early-day motion and quoting the clear understanding of the hon. Member for South Staffordshire (Sir P. Cormack) that there would be a vote. In that letter, I quoted the Prime Minister speaking about the privatisation of the Post Office on 7 January this year:
  "I would like to have seen it but there was no parliamentary majority for it. We are democrats, and if we can't get something through Parliament then we can't do it."
  Despite mounting evidence of the House's desire for a vote on the issue, the Chancellor of the Duchy has treated that wish with contempt.
  The Chancellor is the least arrogant of Ministers. Indeed, he could be mistaken for a one-nation Tory— if that will not damage his reputation and ruin any leadership pretensions that he may entertain. Even he, however, must stand accused of an arrogant use of power characteristic of a Government too long in office—
  Mr. Robert G. Hughes: The right hon. Gentleman said this last time.
  Mr. Foster: The hon. Gentleman obviously was not listening on the first occasion—this is a different speech.
  The Chancellor of the Duchy has denied the House its constitutional right to determine this issue, which has such an impact on its requirements. It has therefore been left to the Opposition to safeguard parliamentary democracy by initiating this debate.
  This issue, thought by some to be a minor privatisation, goes to the heart of how great institutions of government and Parliament should be dealt with. The House will
  78
  know that the Government were heavily defeated, by 124 votes to 64, in another place on Friday 8 March on a proposal to privatise another civil service agency, the Recruitment and Advisory Service.
  I appeal to Conservative Members who care about the British constitution—I know that some of them supported the Government over Scott with heavy hearts—to read the debate in the Lords, which was so apposite to the privatisation of HMSO. Lord Bancroft, a former distinguished head of the civil service, described this proposal as a
  "flippant destruction of an essential pillar."
  Lord Callaghan said:
  "the Civil Service is not the private property of temporary, fleeting Ministers to trifle with as they please. It is the property of us all".
  Now, strangely enough, the Government are supposed to believe that too, for the Chancellor's predecessor, in the civil service debate of 23 March 1995, quoted the Treasury and Civil Service Committee report of November 1994 as follows:
  "The British civil service is a great national asset. Since the 1870s, it has been the permanent and impartial instrument of all administrations. Governments have always seen it as their duty to preserve its efficiency and honesty for their successors."—[Official Report, 23 March 1995; Vol. 257, c. 549.]
  Lord Callaghan continued:
  "They have been so long in power that they are insensitive to the limits of their responsibilities."—[Official Report, House of Lords, 8 March 1996; Vol. 570, c. 545–46.]
  Mr. John Sykes: The right hon. Gentleman is quoting extensively from the House of Lords debate two Fridays ago. Why is his party so keen to abolish the House of Lords?
  Mr. Foster: I wish we were. The truth is that we have a policy for minor changes to the House of Lords, which would improve it immeasurably. We have no proposals to get rid of the Cross Benchers, who initiated the debate. I hope that the hon. Gentleman will listen as carefully as he obviously did before if I repeat what Lord Callaghan said.
  Madam Deputy Speaker: Order. I must make it clear to the right hon. Gentleman that it is not in order to quote from the speeches of Back Benchers in the other place.
  Mr. Foster: Thank you for bringing me to order, Madam Deputy Speaker. My point is that changes to the great institutions of government, such as the civil service, have historically been proposed only after careful deliberation by, for example, a royal commission or some other independent body, or at least after some consideration by a Select Committee. Governments are well advised to proceed with caution and to attempt to arrive at some consensus across the political parties, yet the Government have imposed wave upon wave of change on the civil service, until Sir Robin Butler himself described the current situation as one of
  "low morale and a climate of insecurity."
  The Government are proceeding to change agencies of the civil service with breathtaking recklessness and carelessness, without attempting to produce consensus, with minimal consultation with staff and without seeking

  79
  parliamentary approval except when it is required by law. The Financial Times was provoked, in a leader column today, to state:
  "And the process by which agencies are designated for privatisation should be made more open to parliamentary scrutiny—even if this opens up the possibility of future defeats in the Lords."
  Mr. Ian Bruce: The right hon. Gentleman is proposing that we should continue to have a single stationery office so that all the work from this place goes to HMSO. I did some checking in the Labour party's box in the Library about how it gets its confidential documents printed. It will not surprise the right hon. Gentleman to learn that the Labour party does not print its own glossy documents, but uses five different printers in London. Clearly, the Labour party is using the proper market. If that is good enough for the Labour party, why is it not good enough for the Government and the House? Is that another case of the Labour party saying one thing and doing another?
  Mr. Foster: The hon. Gentleman obviously has not read the motion on the Order Paper; we suggest that further consideration of the measure should be deferred until after the next general election.
  Mr. Michael Brown: Will the right hon. Gentleman give way?
  Mr. Foster: I shall give way to the hon. Gentleman when I have made a little more progress.
  This proposal is coming at the fag end of a Parliament. The Chancellor's original deadline was July this year.
  Mr. John Garrett: Does my right hon. Friend realise that that last intervention was completely ignorant? First, HMSO is not under the control of the House of Commons and, secondly, the great bulk of HMSO printing is done by outside printers.
  Mr. Rhodri Morgan: And always has been.
  Mr. Foster: I am grateful to my hon. Friend for his intervention. It just shows how wise I was to let him intervene and not, just yet, the hon. Member for Brigg and Cleethorpes (Mr. Brown).
  The proposal comes at the fag end of a Parliament. The Chancellor's original deadline was July this year. He later agreed to adjust his deadline to meet the requirements of the House. I hear rumours that that schedule has slipped. Can the Chancellor confirm that he now does not expect the privatisation to be complete before November 1996? Clearly, that could be crucial. The House has been involved in considerable extra cost and work purely because of the privatisation. The House will want to know whether all that extra work and cost has been to no avail.
  After all, the leader of the Liberal party yesterday put his party on alert for an October election. It is now widely assumed that the Government will find it difficult to stumble on beyond October. Labour, of course, is ready whenever the Prime Minister has the courage to go to the country. If the privatisation of HMSO may not be
  80
  complete before the general election, it is surely bordering on the constitutionally improper for a Government, whose authority is ebbing away faster than their majority, to forge ahead with a proposal about which both Houses are so uneasy.
  Mr. Michael Brown: The right hon. Gentleman thinks that the Government will have difficulties privatising HMSO. If the Government privatise it at what he calls the fag end of this Parliament, just before the general election, will the right hon. Gentleman renationalise it?
  Mr. Foster: Hon. Members who were here last time will know that I was asked that question in the previous debate.
  Mr. Robert G. Hughes: And did not answer it.
  Mr. Foster: No, and I shall not answer it in the way that the hon. Gentleman wants me to answer it now. We are determined to prevent the privatisation if we possibly can. The whole thrust of today's debate is to try to urge the Government to proceed much more cautiously, to develop some consensus across the political divide and to defer consideration until after the next general election.
  Mr. Hughes: Will the right hon. Gentleman give way?
  Mr. Foster: I shall give way for the last time.
  Mr. Hughes: That will make the rest of his speech a bit boring.
  Mr. Garrett: This had better be fascinating.
  Mr. Hughes: If the right hon. Gentleman is so concerned about the issue, can he explain something that I find rather odd about the terms of the Opposition's motion? It does not mention HMSO staff once. It is clear to me from the motion that the Labour party does not care about the staff of HMSO or about the success of HMSO. All it wants to do is cause a parliamentary row. That is rather grubby.
  Mr. Foster: Far be it from me to cause a parliamentary row. I think that I rival the Chancellor in my approach to these matters, as the hon. Gentleman will know. The staff of HMSO do not need any proof that the Labour party cares about them. I have been to Norwich, as has the Chancellor, and we have frequent contact with the staff. I have seen for myself their demoralisation under the present Administration and the climate of insecurity. We need no challenges from the hon. Gentleman about how much the Labour party cares about the staff.
  Mrs. Gwyneth Dunwoody: Will my right hon. Friend give way?
  Mr. Foster: For the final time, I will give way to my hon. Friend.
  Mrs. Dunwoody: Will my right hon. Friend explain to some hon. Members that there is a certain dignity about

  81
  public office? The production of papers for the House of Commons is not a matter for hilarity and vulgar schoolboy jokes, but is important to the House and our constituents.
  Mr. Foster: I am grateful to my hon. Friend for bringing to the House some decorum.
  For what is this privatisation? I ask the Chancellor of the Duchy of Lancaster that question in all seriousness. It seems that there is no pot of gold for the public sector borrowing requirement. There are no votes in it. Indeed, the right hon. Gentleman has alienated Conservative support in Norwich, a constituency which the Conservative party must win if it is to avoid humiliation at the next general election.
  The Chancellor of the Duchy of Lancaster will claim that he wants to end uncertainty for the staff of HMSO and for Norwich, but who caused the uncertainty in the first place? The right hon. Gentleman will claim also that HMSO's markets are declining and that privatisation will free HMSO to borrow and sell in wider markets. I accept that HMSO's central Government market may be declining because of other privatisations, but the public sector market is still enormous. At the same time, HMSO has just begun to scratch the surface of the European public sector market.
  What did the Chancellor of the Duchy of Lancaster say when I questioned him about these matters in December? He said that, as a matter of policy, he did not want a public sector body to compete for business outwith the UK public sector. The truth is that the Chancellor, as a matter of policy, has so circumscribed HMSO that it cannot succeed in the private sector. It is not true, however, that HMSO can succeed only if it is privatised.
  Is any further proof required that the Government are seeking to impose an entirely unnecessary privatisation for narrow reasons of dogma? It is a sop to the right-wing fanatics who drive today's Conservative party. It is a good wheeze because parliamentary approval is not required by law. For dishonourable reasons, the right hon. Gentleman is prepared to put at risk the standard and quality of the House of Commons papers that are so essential to the proper working of Parliament. It is no wonder that the hon. Member for South Staffordshire is so difficult to convince on this issue.
  The Chancellor of the Duchy of Lancaster has given certain assurances to the House as required by Madam Speaker in her letter. Hon. Members on both sides of the House find the right hon. Gentleman's touching faith in market forces rather alarming. He can give no guarantee beyond the initial purpose. Indeed, he cannot guarantee that HMSO will be sold as a single entity. How can he deal with Madam Speaker's fear that HMSO will eventually fall into the hands of a foreign buyer? How can he give long-term guarantees that a privatised HMSO will not attempt to cut corners, force up prices or reduce standards, thereby making it difficult for the House to pursue its public service objectives?
  Dr. John Marek: In fact, the process outlined by my right hon. Friend has already begun. The "Commonwealth Year Book" used to be published by HMSO. It was assembled by the Commonwealth secretariat. It was available free to hon. Members, although it was priced at £25. As from this year, however, HMSO is no longer publishing it. It is inconvenient,
  82
  it seems, and it will not make a profit. It is still being published, however, and the cost is now £50. Hon. Members will have to pay £50 in future if they want the book. Is this not an example of standards deteriorating? Why should the book now cost double the price at which it was offered when published by HMSO last year?
  Mr. Foster: That is a pertinent question and I hope that the Chancellor of the Duchy of Lancaster will answer it when he speaks. My hon. Friend's question reflects the fears of Conservative Members.
  Mr. Nigel Evans: Will the right hon. Gentleman give way?
  Mr. Foster: No. I want to press on now. I have given way on several occasions. This is a short debate and many colleagues on both sides of the House want to speak.
  The Chancellor claims that everything will be taken care of in a legally binding contract. When pressed about redress if the contract is not fulfilled, he argues that the contract can be suspended. The hon. Member for Eastbourne (Mr. Waterson) claims that the House can sue or withdraw from the contract on the ground of fundamental breach. That is fine, but what happens to House papers in the meantime? The services are so specialised and delivery times so demanding that ad hoc arrangements are inconceivable. So what redress is there? The House requires its papers, not satisfaction in law or even compensation.
  Who would be answerable to the House? At present, the Chancellor of the Duchy of Lancaster answers questions, makes statements or responds to private notice questions that are granted by Madam Speaker. If there are lapses in standards, the right hon. Gentleman will take some remedial action and report to the House. After privatisation, as I understand it, the Chancellor will have responsibility only for the residual HMSO. Presumably responsibility for taking action and reporting to the House passes to the Commission or to one of the domestic Committees of the House.
  Has the Chancellor sought to consult the House on the apparent dilution of ministerial accountability? Will he consult the House? Will whoever is accountable to the House be able to answer written questions, make statements and respond to private notice questions? These are important questions that deserve early answers.
  In the December debate, I suggested that certain aspects of the Chancellor's proposal might be in conflict with European law. The right hon. Gentleman dismissed that suggestion. I asked whether he would publish the advice sought and the advice given. He has not done so. I understand that the issue is not nearly as cut and dried as the right hon. Gentleman makes out. Will the Minister with responsibility for open government come clean with the House and make an early statement about the proposals and a possible conflict with European law?
  The Chancellor promised the House that he would fully consult the trade unions. According to my information he has not done so. If he so easily breaks promises solemnly given to the House, why should the House believe any of his assurances?
  The 1995 accounts should have been published in February. Rumour has it that they may be smuggled out during the summer recess. I gather that, for the first time,

  83
  when the accounts are published, HMSO will show a loss. I am told that it will be a loss of £41 million, which will include £35 million-worth of exceptional items—for example, £24 million for redundancies, £3 million for property devaluations, £3.5 million for stock write-offs and £4.4 million for late purchase of equipment for the new Manchester site. Is the Chancellor able to confirm those figures?
  Two fundamental questions arise. First, is the proposal not a blatant and clumsy attempt to load the costs of privatisation on the public sector? Secondly, if things are so bad, why sell now, except at a knockdown price to unload such an apparent liability?
  The management and staff of HMSO deserve better than this. They have been proud of their efficiency and profitability. They have met all central Government targets. They are proud of their public service record. They must not go out under a cloud.
  We are faced with an unnecessary privatisation that would seriously risk the services that are essential to the proper working of democracy in both Houses. It would dilute ministerial accountability. Both Houses are uneasy about the proposal. The House authorities are also uneasy. This flippant tinkering with one of the great institutions of government and Parliament at the fag end of a Parliament by a Government without credibility, a vanishing majority and little authority borders on the unconstitutional. Let the Government act wisely at this late stage and defer further consideration of the proposal until after a general election.
  7.40 pm
  The Chancellor of the Duchy of Lancaster (Mr. Roger Freeman): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
  'welcomes the Government's policy with regard to the privatisation of HMSO and the proposed safeguards to protect standards of service to Parliament and other customers.'.
  Last December, I informed the House of the Government's plans to privatise Her Majesty's Stationery Office during 1996. I said that the intention was to seek to bring that transaction to a conclusion in the summer. I have said that consistently, and that timetable has not changed.
  I should like to remind the House of the key reason for privatisation—to chart a more optimistic course for expansion of the business if the commercial freedom of the private sector became available. I should like to develop that argument. HMSO is, and has been for some 16 years, a fully commercial trading fund, operating from within the public sector and subject to the full rigour of public expenditure control, but, at the same time, having to compete for business from departmental and parliamentary customers, which are all perfectly free to take their custom elsewhere to private sector suppliers. Some of them have done so, obtaining perfectly satisfactory services. HMSO, meanwhile, has become more efficient in response, producing savings for all concerned, for which I pay tribute to the efforts of its management and staff.
  Mr. Patrick Thompson: My right hon. Friend has referred to the harsher climate in which
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  HMSO now operates. Does he understand that the concerns of my constituents who work at HMSO are basically about their security and jobs? Will he answer two points? First, will he assure me that there will be no compulsory redundancies as part of privatisation? Secondly, will he reassure me that he will make it a condition of sale that the headquarters of HMSO remains in Norwich, because that is vital to my constituents?
  Mr. Freeman: During my remarks, I hope that my hon. Friend will discover that I can satisfy him on both counts. First, I hope very much that as many of the redundancies as possible will be on a voluntary basis, although I cannot give any guarantees. The redundancies have been under way for the past several months and must continue, for reasons having to do with the trading conditions of HMSO, which I shall outline. I shall sketch out the financial problems that HMSO is now facing.
  On the second point, I hope that I can give my hon. Friend the assurance he seeks. I hope that he will bear with me; if is dissatisfied with the remarks that I have carefully crafted to give him as much assurance as possible, perhaps he will intervene again—with your permission, Madam Deputy Speaker.
  The public sector HMSO is caught in an unenviable position. It is necessarily subject to the constraints that apply to all Government bodies to protect taxpayers' money. It cannot trade significantly outside the public sector. Its borrowing strategy is controlled by the Treasury, and the range of its activities is restricted by its trading fund order. That means that if, in the normal course of business, HMSO wished to borrow money commercially to provide a new service to a new market, it could be prevented from doing so. However, those are precisely the sorts of decisions that its competitors can and do make quite routinely.
  The consequences are obvious. HMSO is losing business, and therefore staff, because it cannot match its unfettered private sector competitors. Its turnover fell by some 10 per cent.—
  Mr. Gerry Sutcliffe: Will the Minister give way?
  Mr. Freeman: I shall be happy to give way after I finish this section.
  HMSO's turnover fell by some 10 per cent. between 1990 and 1994, and trading conditions are becoming increasingly difficult. In June 1994, the then chief executive forecast that 30 per cent. of jobs would be under threat if HMSO increased its competitiveness.
  Mr. Garrett: Will the Minister give way?
  Mr. Freeman: I shall give way to the hon. Member for Bradford, South (Mr. Sutcliffe) first and then to the hon. Gentleman, if he will allow me to finish this brief section.
  Since that forecast, HMSO has lost about half the total jobs that were forecast as under threat. Several hundred more jobs are still under threat. HMSO needs the freedom of the private sector to compete on equal terms for public and private sector work. Such trading opportunities will mitigate those job pressures and, if a privatised Stationery Office is successful in marketing, will mean that more jobs will be available than would otherwise exist.
  Mr. Sutcliffe: Did not the 1992 commercialisation study and subsequent events result in the contraction of

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  HMSO to its current size and prevent it from extending and obtaining extra work, as it wanted? The Government have streamlined the commercialisation study to create a system in which there will be privatisation, but in which HMSO will not be allowed to develop its commercial definition. The trading fund orders included the possibility of encouraging new business, but the Government have not allowed that to happen, as the study said it could.
  Mr. Freeman: The current circumstances under the trading fund orders permit HMSO to use its marginal capacity to win business in the private sector. That is a relatively new permission, which, so far, has been used for £250,000 of turnover. It must inevitably be limited because it is for marginal capacity.
  Mr. Garrett: Will the Minister give way?
  Mr. Freeman: In a moment; I am answering a question.
  The marginal capacity does not relate to the main thrust of HMSO's business. In a moment, I shall explain why it is important to retain that restriction. I do not want to see competition between a state-owned body and private sector suppliers on unequal terms.
  The second part of the hon. Gentleman's question is a perfectly legitimate point of political difference—the Government have one view and the hon. Gentleman has another. On his second point, about the more recent lifting of restrictions, I must admit that I misunderstood the situation. Because of the most recent relaxation in trading fund status, HMSO can win public sector business abroad, not private sector business. I apologise for my misunderstanding of that point.
  Mr. Garrett: The Minister, even though he knew the facts, was being less than open with the House, because HMSO has obtained contracts with the German post office and the French department of employment. It is not merely a question of getting private sector work, because HMSO can get public sector work in Europe. I know that the Minister has just said that, but he did not say it last time, and he had not said it up to then because he was emphasising the scope for HMSO getting private sector work.
  The Minister has also not mentioned the fact that, for the first time, HMSO has developed its own corporate style and Banner trademark. It therefore has an opportunity for its own branded goods, which is a development, and a much better prospect of getting public sector work throughout Europe.
  Mr. Freeman: On public sector work outside United Kingdom, the hon. Gentleman will agree that, so far, the record is relatively limited.
  Mr. Garrett: So far.
  Mr. Freeman: Yes, it is limited so far. My argument is that the vast bulk—well over 95 per cent. of HMSO's turnover—is domestic—
  Mr. Garrett: So far.
  Mr. Freeman: I think, realistically, the main bulk of HMSO's business will be domestic.
  Mr. Tony Lloyd rose—
  Mr. Freeman: The Government have decided that a state-owned business should not be allowed to compete
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  with private sector companies to win existing business for the benefit of a state-owned company. That is a matter of policy, and therefore it is important to lift that restriction. The only way in which that restriction can be lifted, in my judgment and in the judgment of the Government, is to transfer the ownership from the public to the private sector.
  Mr. Sykes: Will the Minister give way?
  Mr. Freeman: I will certainly give way to my hon. Friend after I have given way to the hon. Member for Stretford (Mr. Lloyd).
  Mr. Lloyd: Until the regulation change, I was sponsored by the Graphical, Paper and Media Union; I do not want there to be any doubt about that. Can the Minister explain to the public why the Government have an ideological blind spot in that, when privatisation occurs, HMSO can compete even though it will almost certainly be at the expense of pensions and other working conditions of the people there, yet the Government will not allow the rosy future for HMSO advocated by many people inside and outside the House if it is given commercial freedom? Why cannot HMSO be allowed to compete properly in the public sector?
  Mr. Freeman: We hold it as an important tenet that a state-owned company such as HMSO has three clear advantages. First, it borrows at the gilt rate and not at the commercial rate. Secondly, it does not pay corporation tax whereas private sector companies do. Thirdly, it has the guarantee of the Treasury—of the state. It cannot go bankrupt; it cannot go bust.
  Mr. Garrett: Can't it?
  Mr. Freeman: As a state-owned company, it cannot—[Interruption.]
  Madam Deputy Speaker: Order. There is an unwelcome tendency for sedentary interventions. They have been made this evening by hon. Members on both sides of the Chamber. I should like them to stop.
  Mr. Freeman: In our belief, it is important that HMSO—the Stationery Office, as it will become in the private sector—has the ability to compete in the private sector for private sector work. It is important that that should occur on fair terms with other private sector companies because they will lose existing work to the Stationery Office if it can compete for and win business. At present, Government Departments are untied from HMSO so they can procure their printing and publishing requirements from the private sector—and they are doing so. That is one of the reasons for the contraction in HMSO's total business.
  Mr. Sykes: I am grateful to my right hon. Friend for being so patient with me. I do not understand why the Government should take any lectures from the Labour party on competitiveness when the first thing that Labour would do if it ever got into power would be to undermine the competitiveness of HMSO by imposing the social chapter and the minimum wage. That would destroy jobs at HMSO.
  Mr. Freeman: I add a postscript to what my hon. Friend has said. He has reminded me of the point that was

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  raised by hon. Members on both sides of the House about the Royal Mail and Post Office Counters. I shall deal with that issue because the right hon. Member for Bishop Auckland (Mr. Foster) said that the Government had already relaxed the rules dealing with what the Royal Mail and Post Office Counters could do in the private sector.
  There is no parallel here. If the right hon. Gentleman reads carefully the announcement by my right hon. Friend the Deputy Prime Minister when he was Secretary of State for Trade and Industry, he will find that there is no lifting of the bar on the Royal Mail or Post Office Counters competing with private sector companies for existing private sector work. We are therefore maintaining consistency.
  Mr. Robert Jackson: My right hon. Friend was making a point about the untying of Government Departments from the obligation to use HMSO. Inevitably, because of our interest in Hansard, we in the House are mainly concerned about the printing and publishing side. However, more than 40 per cent. of the work of HMSO is in bulk purchasing. Does my right hon. Friend think that the taxpayer is getting value for money from the increasing trend of diffusing responsibility for purchasing to a range of Government Departments, each acquiring its own purchasing facilities and each pursuing its own policies?
  Mr. Freeman: The answer to that question, with one important caveat, is yes. The caveat is that some central advice should always be available to Departments to ensure that best practice is followed and that examples of good procurement practice are available. With information technology and information systems, for example, the Government Centre for Information and Systems—known as CCTA—which is untied from Government Departments, stands ready to provide best practice. It has been successful in ensuring that our procurement of IT and IS is effective.
  The central unit on procurement within the Treasury should also provide best practice advice. I take the point made by my hon. Friend the Member for Wantage (Mr. Jackson) that, if one extends delegation too far, one sometimes gets confusion and that Departments sometimes seek to reinvent the wheel. The Office of Public Service and the Treasury seek to watch carefully for that danger, and I hope that we are successful.
  Mr. John Gunne rose—
  Mr. Derek Foster rose—
  Mr. Freeman: I must make some progress, but I will give way to the hon. Member for Morley and Leeds, South and then to the right hon. Member for Bishop Auckland.
  Mr. Gunnell: The Chancellor of the Duchy is presenting what he is doing as being in the interests of HMSO. However, is it not true that, as a next steps agency, HMSO was ripe for privatisation on the basis of dogma? Is it not true that many next steps agencies are being privatised as a matter of dogma? Alternatively, will the right hon. Gentleman be able to find a different reason for privatising each one of them?
  Mr. Freeman: There are different reasons for privatising each agency; the argument must be justified.
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  So far, I have explained that HMSO is losing staff, as forecast by a previous chief executive. We are in the middle of that process; several hundred more jobs will go, not just in Norwich but elsewhere. I am trying to deal with the problems that HMSO faces.
  I have explained why the solution offered by the right hon. Member for Bishop Auckland—which is simply to sweep away the restrictions and to let state-owned companies compete with the private sector for more business—is not an acceptable philosophy. I am trying to deal with the problems that HMSO faces at present, and I am, I hope, doing so in a responsible fashion.
  Mr. Derek Foster: The right hon. Gentleman is pretending that these matters are far more settled than they really are. Let us consider, for example, the private finance initiative. The private sector has made it clear that it seeks further guarantees. The intention was that the private sector would take the risk, but it is so unwilling to do so in hospital developments, for example, that it insists on further guarantees. Indeed, that is why the Secretary of State for Health has introduced the National Health Service (Residual Liabilities) Bill. These matters are by no means as clear cut as the right hon. Gentleman pretends.
  Mr. Freeman: The right hon. Gentleman held a different position during the successful development of the proposal to use the private finance initiative for the channel tunnel rail link. I think that he would admit that that development has been, so far, a tremendous success. A £4 billion project, instead of being financed at the expense of the taxpayer, will include a substantial contribution from the private sector.
  HMSO's 1995 accounts have not yet been audited. However, 1995 was a difficult year; the right hon. Member for Bishop Auckland seems to have accurate but informal advice on the matter. When the accounts are published—I confirm that they will be published shortly—they will show a significant loss, largely because of the costs that HMSO has had to incur in streamlining its business under present trading fund rules. As a trading fund, HMSO has to bear the full cost of any redundancies; it does not share in the 80:20 scheme that applies to other agencies and to Departments.
  HMSO has had to make extensive provision in its 1995 accounts against further redundancy costs. It has had to make provisions in other areas, including exceptional stock write-offs and the launch costs of a new brand to prevent further erosion of its office supplies market. HMSO has also experienced some difficulty in its relatively new public sector overseas operations and it may need to make some provisions for that, in particular in relation to trading with public sector organisations in Uzbekistan. HMSO management are confident that matters will improve in future years, but there can be no doubt that underlying problems will remain as long as HMSO remains in the public sector.
  Mr. Ian Bruce: My right hon. Friend will know that the whole publishing world is moving towards the introduction of electronic publishing, both to produce the printed word and to produce material on the Internet and the super-highways. Can he confirm to the House that HMSO will be able to go ahead with the investment

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  needed to change the way in which it carries out its business, and that modern and dynamic management is needed to ensure that the change is pushed through?
  Mr. Freeman: I am confident that, with a successful transfer to the private sector, such investment will occur.
  I am happy to reiterate my earlier undertaking that the Government will seek a single buyer for the whole business and will not in any circumstances separate HMSO's printing and publishing operations at the point of sale. All bidders will be subjected to a rigorous assessment of their ability to meet customers' needs and of their plans for the business and its staff.
  I cannot envisage circumstances in which a buyer would wish to move the organisation away from Norwich. For the avoidance of doubt, I now confirm that such a buyer would be expected to maintain its presence in Norwich. The House will be aware—[Interruption.]
  Mr. Tam Dalyell: Does this not encapsulate the root of the trouble? The Minister may stand there, doubtless in good faith, believing what he is saying. However, in no way can he guarantee the actions of future Parliaments or future Governments. Do not such pledges have to be enshrined in law?
  Mr. Freeman: I was referring specifically to HMSO's presence in Norwich. As the House and any prospective business purchaser would assume, the operations of HMSO are represented in Norwich. In due course, we will publish the shortlist of bidders for the Stationery Office. I know that hon. Members will wish to understand precisely what is proposed not only by those on the shortlist generally but by the preferred bidder.
  Mr. Chris Davies: Will the Minister give a similar guarantee—if guarantee it can be called, and I suspect that it cannot—to the employees of HMSO in London and Chadderton?
  Mr. Freeman: I have visited a number of HMSO's operations, but not Chadderton. There is also the Parliamentary Press and the distribution facility at Nine Elms. I am not aware of precisely what goes on at all operations, but no doubt the hon. Gentleman is. I would not wish to commit myself at this stage. If he would care to table a question, I should be happy to answer it.
  The House will be aware that there is no need for legislation to effect the sale of HMSO's assets. However, I recognise that there will be a need to wind up the HMSO trading fund, and to that end the Government undertake to introduce the necessary order under section 6 of the Government Trading Act 1990 simultaneously with the sale.
  I now come to the need to make arrangements for the future provision of services to this House and another place. I shall first deal with the point made by my hon. Friend the Member for South Staffordshire (Sir P. Cormack) in our last debate on the matter, when he asked about the possibility of separating out Parliamentary Press in south London and retaining its ownership in the public sector.
  I do not believe that such a separation would be wise. Not all parliamentary business is dealt with at Parliamentary Press and not all the work of that press is
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  for Parliament. There is no one-to-one relationship. Moreover, although 90 per cent. of the work of Parliamentary Press is for Parliament, its presses are only one third loaded, and more work—for example, private sector work—is needed to achieve fuller efficiency and cheaper prices for Parliament.
  As the House will be aware, we will invite customers of HMSO to agree legally enforceable contracts with the Stationery Office, which will be assigned to the new owner at the point of sale. Such contracts can specify all aspects of a customer's requirements, including matters such as price, standards of service and, in the case of publishing services, arrangements to ensure satisfactory distribution. Those arrangements should give full assurance to customers that they will continue to receive the high level of service for which HMSO has become renowned.
  It will, of course, be very much in the interests of the new owner of the business to continue to meet its customers' needs. That is especially true of work that the privatised business will perform for Parliament, including statutory business. No owner would wish to jeopardise relations with such a valuable customer accounting for some 10 per cent. of turnover. I intend that the safeguards requested by Madam Speaker in her letter to my right hon. Friend the Leader of the House last November, together with other concerns raised by hon. Members, will be incorporated in the draft contract.
  In particular, the draft contract provides that the House has the right to terminate it upon any change of ownership of the privatised business. The importance of parliamentary work to the business is such that no prospective owner would buy it unless Parliament's custom were assured, so this part of the contract amounts to an effective veto on changes of ownership.
  Sir Patrick Cormack: My right hon. Friend is dealing with this matter with his customary impeccable courtesy and thoroughness. However, can he not see that it is impossible to guarantee what might happen after the first sale? It is impossible to guarantee that a Maxwell or a Murdoch—to name one crooked potential purchaser, and another who, although not crooked, I would not want to have running Parliamentary Press—could not buy the business at a subsequent stage. Although I do not for a moment impugn the good faith and good intentions of my right hon. Friend, this is a matter of very real concern.
  Mr. Freeman: My hon. Friend is right; he has put his finger on a matter of legitimate concern. I have some suggestions to put to the House. I do not wish to portray my position as inflexible or as not anxious to consider constructive suggestions. We wish to protect the position of this House and the other place.
  One suggestion is to consider alternative suppliers to a second owner who might be unacceptable or who, indeed, might withdraw from providing parliamentary services. I understand that there are three or four City printers within a similar distance of the House as Parliamentary Press. The House will be aware of the notion that any acceptable supplier of parliamentary services should be within three miles of the House, so I am using that measure of distance.
  No printer has exactly the same mix of plant and equipment as HMSO, but between them the printers are capable of taking on the work load. Of course, in the

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  absence of competition for Parliament's work, I accept that the precise capability does not exist outside HMSO. However, there are printers in London who would no doubt be keen to invest on the basis of contracts with the Houses of Parliament.
  By the time the first contracts are due for renewal, advances in printing technology are expected to have increased the range of likely competitors. I freely acknowledge the need for a contractual provision for sufficient notice of any change in ownership or unilateral desire to change the quality of service to this House, to allow the House to change its supplier if it so wishes. The draft also suggests a means by which this House could be guaranteed real savings year on year as technological improvements are introduced.
  I am pleased to note that the price of the daily Hansard has fallen from £7.50 in 1991—the last time we debated this, my hon. Friend the Member for South Staffordshire explained why it rose to that level—to £5 in 1996, and I hope that the price can fall further in real terms.
  Of course, the draft contracts will require careful examination, and no doubt amendment, before they are ready for the House authorities to consider and seek approval. It is for this House and another place to determine their requirements and the Government's role is to offer our resources to assist in bringing them into contractual form and incorporating them in the sale.
  I can reassure the House that the Government attach the utmost importance to the services that Parliament receives from HMSO. I repeat the assurance that I have just given to my hon. Friend the Member for South Staffordshire: I look forward to constructive discussions on how we can satisfy not only my hon. Friend but the House in general on the security of suitable services to the House—not only on price but, more important, on quality, something that sometimes cannot be expressed accurately and comprehensively in a contract.
  I understand concerns regarding accountability for those arrangements. In the interests of time, and as I am aware that many hon. Members wish to speak, I shall summarise the points that I had intended to make at greater length. It is important to appreciate that the chief executive of HMSO is responsible for the day-to-day operations. I am accountable to the House for policy and for answering questions put to me by hon. Members.
  Mr. Dalyell: The Minister will recollect that, the last time we debated this matter, there was a good deal of discussion about consultation with and advice from the Department of the Clerk of the House. I understand that the right hon. Gentleman is having to curtail his speech and that he may have originally intended to cover that point. Has there been consultation with the Clerk's Department and, if so, has it given its full-hearted approval?
  Mr. Freeman: I am grateful to the hon. Gentleman for raising an important point that also concerned Madam Speaker. I will explain the present position. It has always been my intention and that of my hon. Friend the Parliamentary Secretary to be as helpful as possible. Madam Speaker has made it quite clear—and I fully accept—that it is for the Government, not Officers of the
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  House, to make a decision about the preferred bidder. The Officers of this House report not to the Government but to the House of Commons Commission and to the Speaker.
  My understanding is that it was to assist the House of Commons Commission—although I understand that it has not yet considered a draft contract—that the Officers were to have offered their comments on early drafts of the contract. It was to clarify and question. They are not responsible for policy; I am. The hon. Member for Linlithgow serves a good purpose by enabling me to distinguish precisely what the respective responsibilities are.
  Mr. Dalyell: Were the Officers' comments taken?
  Mr. Freeman: I was not present at those discussions. I apologise to the hon. Gentleman. I have no idea what the Officials of the House have said, nor would it be right for me to comment on behalf of the House of Commons Commission or Officials. The respective responsibilities and the constitutional position are clear.
  Mr. A. J. Beith: The Commission would be surprised if Officers of the House were invited to give views about the desirability of privatisation. It was not at all in that respect that they were assisting the Commission; they were making sure that the drafts that were being considered were in a form that was likely to meet the House's requirements. Both the Chancellor of the Duchy of Lancaster and I have emphasised that it can be only in that role that the Clerks assist the process.
  Mr. Freeman: I am grateful to the right hon. Gentleman for stating the position precisely. Comments were invited to clarify the position for the convenience of the House. It is for the House of Commons Commission and for the appropriate corresponding body in the other place to consider any draft contract between a House and a prospective buyer—a privatised owner—and to satisfy itself that a contract meets its requirements. It is not for Government but for the House of Commons Commission to decide how the matter should be approved. It is not a matter for me as the responsible Minister.
  Sir Patrick Cormack: To clarify further, would it not be entirely within the jurisdiction of the House of Commons Commission to decide not to put the work to HMSO it if were privatised and the Commission did not approve of the person who was going to take it over?
  Mr. Freeman: Of course, my hon. Friend is right.
  The value of the business done with Parliament, including the statutory publications, is about 10 per cent. of turnover. That is significant and important. However, it is wholly in the power of the House of Commons authorities and the authorities in the other place to decide what is needed—what the contract is, the price requirements, the standards of service required. As the Minister responsible for the Stationery Office, I wish it not only to do its present business but for its privately owned successor to continue to do that business. It is important and prestigious business. It is profitable, but it will doubtless become less so as the House controls the prices of the publications even better.

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  I apologise if I have not covered all the points that the House would have expected me to cover. If there are such points, my hon. Friend the Parliamentary Secretary will deal with them in his winding-up speech.
  In summary, HMSO faces an uncertain financial future. It has lost a number of jobs, which I regret. The reasons for that include its being untied from Departments, which can procure their printing and publishing requirements not only from the public but from the private sector. HMSO needs to become more efficient. It will have to lose more jobs. I believe that we can create more jobs than would otherwise have been the case by transferring its ownership to the private sector, allowing it to borrow and to operate freely. I know from the staff I have met that it will do so successfully. I urge the House to support the Government amendment.
  Mr. Deputy Speaker (Mr. Michael Morris): Nine hon. Members wish to catch my eye and the debate must end by 10 pm, so I plead for shortish speeches.
  8.13 pm
  Mr. Michael J. Martin: I shall try to be brief, Mr. Deputy Speaker.
  I have listened to the speeches of my right hon. Friend the Member for Bishop Auckland (Mr. Foster) and of the Chancellor of the Duchy of Lancaster, and I heard some Conservative Members, appropriately, supporting their Minister. I ask them to support the valuable services that the House receives from the parliamentary press. As Back Benchers, we must always point out that we get a good service from it. It is not a privatisation in the normal sense of the word. If we make the wrong decision about this facility, we will lose some of our powers as Back Benchers.
  My hon. Friend the Member for Linlithgow (Mr. Dalyell) is here and intervened earlier. We all appreciate his valuable probing over the years, which has benefited Back Benchers. The way in which he approaches Ministers has been an inspiration to us all. He would not be able to probe and question Ministers in that way but for the facilities extended by Hansard. When Parliament finishes at 3 am, Hansard is ready for us first thing the following day so that we can find out exactly what Ministers and other hon. Members have said.
  As a Committee Chairman—other hon. Members who chair Committees will know this, too—I know that, if Hansard is not available, there is usually a point of order to say that it is not available and that hon. Members want it to ensure that they can conduct themselves properly during that sitting of the Committee. There are no two ways about it; it is a very valuable service.
  It is also a valuable service to people outside Parliament. The moment that parliamentary publications and important papers become available in, or are made public through, the House, they are available in other major cities in the United Kingdom. We are talking not only about printing but about a successful distribution facility. If we are to have open government, it is important that that service should be available.
  I have not had the privilege of visiting the Bermondsey printing facility. I dealt with the Chancellor of the Duchy of Lancaster when he was a Transport Minister, and I know that, when he gives assurances, he gives them in good faith. However, if a private printer takes over and in
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  good faith signs a contract—however iron-clad—with the House or the Minister, and goes out of business or into liquidation, we may lose not only the printing facility but an important storage facility. If we are to get our papers in good time, it is important that we should have a storage facility. We all know about London's transportation difficulties. If the storage facility was in another part of London, the heavy traffic could cause delays in getting our papers. Once we have lost those facilities, although we may take the contract away from that printer, our storage facility assets could be lost and gone for ever. Back Benchers should always argue that we have an excellent facility and we should not lose it.
  This is an important debate and other hon. Members want to speak. I shall ask a series of questions. If they cannot be answered tonight, I hope that replies will be given in due course. First, will the recent reductions in the cover price of Hansard be jeopardised by the Government's proposal? On small print runs, would the cost of Select Committee reports and the Standing Committee Hansard have to rise? Would the present policy of supplying libraries with copies at discounted prices continue?
  Would those documents be available to hon. Members at the same time as they are now? Would they be available in all parts of the United Kingdom at the same time as they are available in London? Where would the House store those documents, and how would it distribute them? On confidentiality, HMSO's staff sign the Official Secrets Act 1911. Would private companies ensure the same confidentiality? Who would answer to the House if hon. Members were dissatisfied with the service provided? Has privatisation of the printing of parliamentary publications been successful anywhere in the world?
  If the House is not satisfied with the service provided, could it withdraw from its contract? If the House publications made a profit, who would benefit? If they made a loss, would the House be expected to make it good? When the Minister replies, could he also comment on the loyalty and job security of the staff?
  8.20 pm
  Mr. Patrick Thompson: I am grateful to speak briefly in the debate, because we have had more than one opportunity in the past few months to talk about the future of HMSO. This is an opportunity for me to talk mainly about the concerns of my constituents. I have had a chance to meet some of them in Norwich within the past fortnight and I should therefore like to explain to my right hon and hon. Friends on the Front Bench exactly what is worrying some of the employees of HMSO. I hope that the Minister will be able to give me some answers.
  Although the issue involves a serious political debate about privatisation versus nationalisation, from which I am not trying to hide, the main concern of my constituents in Norwich, North is about jobs and security in the future. It is no secret that job insecurity is still a political issue. My constituents are concerned about their future—I do not think that there will be any disagreement about that in the debate—and I must therefore make those concerns the top priority in my short speech.
  That fear about the future makes the issue involved difficult, and it is why guarantees cannot be given. I gather that during the past 15 years—I will be corrected

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  if I am wrong—the number of jobs at HMSO has halved. As we have already heard from my right hon. Friend the Chancellor of the Duchy of Lancaster, a forecast was made in 1994 that a further 30 per cent. of jobs would be lost.
  Mr. Eric Martlew: That is not the figure.
  Mr. Thompson: I have read that that was the figure, but if I have not got the details right, someone else will put that right in his speech. The fact is that the trend is towards a decline in the number of jobs available. I want to discuss the figures as they are; I do not want to select or distort them in any way.
  If, as my right hon. Friend has said, the job opportunities in my constituency and in other parts of the country will increase as a result of privatisation or any other change, I would be foolhardy simply to oppose it because of fears that may have been expressed. It is important to look at the opportunities and to discuss the issues on their merits.
  I have heard the concerns of my constituents, and at the end of my speech I shall retail exactly what they are. I am sure that those concerns will be the subject of cross-party agreement and I hope that the Minister will try to answer them to my satisfaction and that of my constituents.
  I heard today that many fears have been expressed about the future of Ordnance Survey. I gather that, since changes have been made, however, things have been going well. No doubt my hon. Friend the Minister will confirm whether that is true.
  The Opposition motion, moved by the right hon. Member for Bishop Auckland (Mr. Foster), recommends that the decision about the privatisation should be delayed until after the general election. The trouble is that the debate about the future of HMSO has already started, and my constituents want to know whether it is moving towards privatisation or not. I cannot support an Opposition motion that simply recommends that the whole thing should be put off.
  Mr. Garrett: Why not?
  Mr. Thompson: I am about to explain. As my hon. Friend the Member for Harrow, West (Mr. Hughes) said, the Opposition motion makes no mention of staff or the good work that has already been done by—
  Mr. Martlew: We have debated that already.
  Mr. Thompson: We are debating the Opposition motion now. What is more important and significant is that the motion does not make any commitment about what the Opposition would do after a general election, should they gain power. Would they renationalise HMSO or not? Such continuing uncertainty is not good for the staff either.
  Mr. Robert G. Hughes: When the hon. Member for Hartlepool (Mr. Mandelson) finished his speech in the previous debate on 18 December, his last words were:
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  "let us test the opinion of Parliament and put the issue to a proper vote in the new year."—[Official Report, 18 December 1995; Vol.268, c.1316.]
  Does my hon. Friend agree that the people working for HMSO may well have thought that the hon. Gentleman was talking about their interests, and their work? Apparently, according to the terms of the Opposition motion, that cannot be true. Plainly, the Opposition do not care about the interests of the people who work of HMSO.
  Mr. Thompson: I know that my constituents wanted the debate and they urged me to support the motion calling for it. They may have been rather surprised by the terms of the Opposition motion, for the reasons that I outlined earlier.
  Mr. Derek Foster: Has the hon. Gentleman consulted his constituents about the terms of the motion? Has he spoken to trade union representatives, because they tell me that they are perfectly happy with its terms? They are happy to support it.
  Mr. Thompson: The right hon. Gentleman is correct, because I have discussed the terms of the early-day motion, which is similar to the terms of the Opposition motion, with constituents. I apologise if I inadvertently misled the House, but what I should have said a moment ago is that I think that they will be surprised by the terms in which the motion was addressed by the right hon. Member for Bishop Auckland. We had better not pursue that argument now.
  The Opposition motion also refers to the standard of service to the House.
  Mr. Garrett: Will the hon. Gentleman give way?
  Mr. Thompson: Just once more.
  Mr. Garrett: The debate on 18 December was about employment in HMSO. I asked the hon. Gentleman then, straight out, whether he will support privatisation and the inevitable redundancies among his constituents and mine. He could not say one way or the other.
  Mr. Thompson: The hon. Gentleman was not listening a moment ago, when I made it perfectly clear that I would support the Government in the Division. I hope that he will now listen. I support the Government because the Opposition motion—
  Mr. Garrett: The hon. Gentleman did not mention that.
  Mr. Thompson: I am answering the question. The Opposition motion is not cast in helpful terms and, as I said right at the beginning of my speech—I hope that the hon. Gentleman was listening—if I opposed the Government, I would have to do so in the knowledge that that decision would improve prospects for jobs in my constituency. Right at the start of my speech I gave a number of the reasons why I felt that that was not the case.
  The Opposition motion also refers to the standards of service to the House. I am led to understand that all the safeguards requested by Madam Speaker in her letter to the Lord President in November have been incorporated

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  in the draft contracts. Time does not permit me to dwell on that important issue, although I accept that Hon. Members on both sides of the House are concerned about the future standard of Hansard and the commitment to it.
  As others have said, I do not believe that we should separate parts of the business. I would not like parliamentary business to be separated from Crown business or the publishing or printing services split up. I do not know whether the Government welcome these remarks, but I would like to see HMSO continue its links with Parliament, through Hansard. I hope that—despite the interventions of my hon. Friend the Member for South Staffordshire (Sir P. Cormack) in earlier debates— the Hansard link with HMSO continues post-privatisation. I hope that all hon. Members fight to ensure that the appropriate safeguards are built into any contracts or into any changes that take place.
  I conclude by listing the concerns that have been expressed to me by my constituents. I hope that my hon. Friend the Minister will respond to those concerns, and to others that have been expressed during the debate.
  First, my constituents have asked for a debate—we are now having that debate, so I do not need to pursue that issue any further. Secondly, my constituents expressed a concern that has been mentioned by the hon. Member for Norwich, South (Mr. Garrett)—and he may refer to it if he speaks in the debate. They asked whether the provisions of the Transfer of Undertakings (Protection of Employment) Regulations 1981 will apply and whether there is a time limit on them. I hope that my hon. Friend the Minister will respond to a technical point, which I suspect will be raised by other hon. Members. There is concern about this matter in Norwich, and I would like to hear my hon. Friend's answers in this regard.
  Hon. Members have already referred to guarantees for staff. There is concern that there could be asset stripping, but my right hon. Friend the Chancellor of the Duchy of Lancaster has made it clear that this will not happen. However, there is still real concern about this. The skill centre in Mile Cross is in my constituency. It was taken over by a firm called Astra, which then collapsed. I would like my hon. Friend the Minister to address these dangers and to assure my constituents—some of whom may be here listening to the debate—that there will be no question of asset-stripping should privatisation go forward.
  Finally, I refer to the retention of the Norwich link. I understand the reaction of hon. Members when this was mentioned earlier. However, it is important to remind hon. Members of the link between Norwich and HMSO, and the link between Norwich and Hansard. Luke Hansard was baptised in Norwich, and he served his apprenticeship to a printer there before coming to London in 1774— I would continue in this vein if time permitted.
  There is a strong historical link between Norwich and Hansard, and Norwich and the HMSO. I realise that what I am asking for—a strict guarantee—may be going slightly over the top, but I make no apology on behalf of my constituents and the people living in Norwich for saying to my hon. Friend that the Norwich link is important. As a Member of Parliament for Norwich, I will continue to stress the importance of it and try to get the strongest reassurance that I am able to obtain from him and his hon. Friends on the Front Bench.
  I have explained that, as far as jobs and security are concerned, at this stage in the debate I am happy to support the Government and to vote against the
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  Opposition motion. However, my constituents have concerns, which I have tried to put to the Minister in a straightforward manner, and I hope that he responds to them in some detail.
  8.33 pm
  Mr. Chris Davies: This debate is about the straightforward principle whether there is a role for commercial enterprise within the public sector. The Minister was right to admit that the debate is about the ideological divide which separates the Government side of the House from the Opposition side. If an organisation such as Her Majesty's Stationery Office cannot stay in the public sector—where it has been for 210 years, serving Parliaments and Governments—what organisation can? The Liberal Democrats believe that there is no reason why HMSO should not stay in the public sector.
  This debate is of particular interest to me. There are some 2,800 employees still working for HMSO, despite the reductions that have taken place in recent years. Many of those people work in London and in Norwich, and some 500 work at Chadderton in Oldham—where a great number of my constituents work. My hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) has also asked me to point out his concerns for jobs in his constituency.
  Some vital documents are produced at the plant in Chadderton: passports, benefit books for the Benefits Agency and a variety of other printing and stationery tasks. My constituents are concerned for their jobs. Despite the so-called guarantees that we have had, they realise that those guarantees are not worth the paper they are written on—if, indeed, they were ever written on paper; it would be astonishing to see any such guarantees written on paper. My constituents are concerned that, if HMSO is sold off, it will be cherry-picked by a large printing or publishing organisation that takes its place; there will then be rationalisation and the plants in Chadderton, London and Norwich may close down regardless of what the Minister may say tonight. He has been given the opportunity to give guarantees on this, but he has specifically declined to do so.
  Mr. Nigel Evans: The hon. Gentleman has talked about his hope of securing as many jobs as possible within the newly privatised HMSO. The Coopers and Lybrand feasibility study of HMSO showed that privatisation was not only achievable but the best way of securing those jobs. What does the hon. Gentleman have to say about that report?
  Mr. Garrett: It did not say that.
  Mr. Davies: The answer to that question has been given by the hon. Member for Norwich, South (Mr. Garrett) from a sedentary position—that it did not say that. Again, we have come down to the ideological divide over what is the best way of securing jobs. Restrictions are placed on HMSO, as it exists at the moment, which prevent it from securing jobs in the way that many hon. Members believe that it should be able to do. Over the past 15 years, the staff of HMSO has been reduced from 6,300 to 2,800
  As a result of the changes introduced by management in that organisation, sales per head have increased substantially. Productivity has increased substantially. For

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  example, sales have increased from £41,000 per person to £121,000 per person. As an organisation, most aspects now have International Standards Organisation 9000 accreditation. HMSO is meeting the Treasury targets and paying money into the Treasury coffers.
  As other hon. Members have said, there has been a 10 per cent. cut in turnover in the past five years. The growth has been restricted by Government controls. We are told that, if HMSO remains in the public sector, its costs will continue to rise because it will not be able to win other business or use its equipment to capacity. We are told that a sale to the private sector is the only realistic course.
  From my perspective as a Liberal Democrat, I believe that that is the logic of the lunatic asylum. If HMSO cannot survive—despite the evidence that it is now doing well and management is meeting the targets set by the Government—it is because Treasury rules are restricting its development. But who makes those rules? The Government make those rules, and they can change them. They are not rules which apply in other countries of the European Union, where the targets for organisations in the public sector are different. The Government have the ability to change the rules.
  The Government cry that they cannot do that because HMSO would be able to compete unfairly because it would not have to pay corporation tax and could borrow more cheaply than organisations in the private sector. I accept those points—and they must be addressed. The playing field should be level. My party has no problem at all with the idea that these changes can be introduced to level the playing field, but the Government should lift the controls so that HMSO can go out and win business, pay tax and maintain the work force at its existing locations.
  What should we be looking for by way of return from this publicly owned organisation? It seems to me that the basic element that we should be looking for is that HMSO is able to provide printed requirements for Parliament and Government effectively and at no cost to the taxpayer because it generates enough money to meet that outlay through its work in the private sector.
  I understand that at present only about 10 per cent. of HMSO's turnover arises from Government and official publications. If it can generate a 10 per cent. return from the work that it gains in the private sector, it will be doing very well indeed. Any money paid to the Exchequer on top of that would be icing on the cake. That would be a very good deal for the country and its taxpayers.
  To return to the ideological divide, there is a belief that the private sector is good and the public sector is bad, and that only by sale to the private sector will the taxpayer get a good deal. I regard that as simplistic rubbish. With large organisations, it is not ownership that matters but the targets that are set for managers and the disciplines imposed on them.
  The Post Office has been transformed in recent years by the setting of clear targets for management, who have been expected to get on with the job and manage according to the disciplines of the private sector and the market. In fact, the Post Office is doing so well that the Government are using the price of stamps as a tax to subsidise the public purse.
  Strangely, railway managers did remarkably well throughout the 1980s. By the beginning of this decade, we had created the most cost-effective, least subsidised
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  railway system in Europe. The Government did not recognise that, but chose instead to put their ideological complaints about the public sector up front—to castigate managers. As a result, they now have the public relations mess that I am glad to pass on to them.
  In the past 15 years, managers in HMSO have demonstrated equally well their ability to turn what may have been an old-fashioned, out-of-date, lackadaisical organisation into one that is able to meet the tight disciplines of the marketplace, making the efficiencies that we would expect.
  The public sector has a bad name in this country because of its inefficiency, high costs and need for subsidies. It is remarkable that the Government do not claim a bit more credit for their successes when there are successes to claim credit for. The turnaround of unprofitable, uncompetitive public sector organisations into ones that are able to compete in the private sector is something to be proud of. The Government should welcome that development instead of immediately thinking that such organisations should be sold off.
  From my point of view—from the point of view of the Government's opponents—that is all to the good. The Government repeatedly throw out the baby with the bath water, not by accident but by design. As long as my party wishes to score political points at the expense of the Government, long may they continue to do so, but it is not good for the country that they continue to do so. Stripped of featherbedding and subsidy, it is good that some organisations in public ownership are seen to be doing well.
  The retention of HMSO in public ownership will help to keep the private sector, which dominates more than 95 per cent. of the market for printing and publishing requirements, on its toes. Moreover, it will be good if it can manage to survive competitively while the managers of the organisation pay themselves reasonable salaries instead of meeting the excesses of the private sector, which have become all too common in recent years, especially in organisations that have been privatised by the Government.
  I do not understand how selling a profitable, efficient organisation benefits the public. There will be a one-off payment to the Treasury and the public purse, but thereafter one loses the profits—the annual contribution to the country's coffers—which would be coming in for many years to come. Knowing the way the Government have privatised in the past, I suspect that the public cannot even be sure that they will receive the one-off payment.
  The assets of many industries that have been privatised—public assets—have been written off so that those organisations may be privatised, to such an extent that I see from the weekend newspapers that it is said that the public are now subsidising the shareholders of those privatised companies to the tune of £2,000 each because of the billions of pounds of public assets that have been written off.
  The public therefore cannot be confident that they will get a good deal from the privatisation of HMSO. I suspect that, in the accounts or the Treasury books, a trade-off will be made—a writing off of publicly owned assets— to make the sell-off of HMSO more attractive. Only later, if the right parliamentary questions are asked at the right time, will we belatedly discover the truth.

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  I urge the Government to put a stop to this dogmatic nonsense and to build on the existing success. I urge them to remember that the Stationery Office was set up 210 years ago to serve the needs of Government and Parliament and to benefit taxpayers, to prevent their being ripped off by organisations in the private sector which were in league to do down the public purse. I urge the Government to let the Stationery Office do its job.
  8.45 pm
  Mr. Robert Jackson: I shall be brief, and I intend to focus on access to Crown copyright material.
  First, a few remarks about privatisation. I served as Parliamentary Secretary to the Office of Public Service and Science with responsibility for HMSO when it was transferred from the Treasury to the Office of Public Service and Science in 1992. The House may be interested to know that there had been a full dress review of the issue of privatisation of HMSO in the Treasury only a year before that. This was conducted by my good friend John Maples, who is no longer with us but who we hope will return at the next election. That review in the Treasury concluded that HMSO should not be privatised.

  In 1992, when HMSO came to the Office of Public Service and Science, the issue was again raised, and I was instructed to go into the matter all over again. I concluded, once again, that HMSO should not be privatised.
  The wheels of Government grind on and now, four years later, we find that HMSO will, after all, be privatised. I have no particular quarrel with that decision because it seemed to me in 1992 to be a matter of finely balanced judgment, but I shall make three observations which I hope will be relevant.
  First, I wonder whether Ministers can imagine what it must have been like trying to manage HMSO and its thousands of employees during those years, when one review after another and one ministerial decision after another failed to settle such a fundamental question.
  Secondly, I put it to Ministers that the essential case for retaining an organisation such as HMSO is the case for collective bulk purchase. That point has hardly been mentioned in the debate, but it is the largest part of HMSO's business. When the Public Accounts Committee inquires into the performance of Government Departments as purchasers of their own office and other supplies, as I hope it will, I hope that it will find that the sum of their several efforts is as cost-effective—and as free from corruption—as the record of HMSO as a collective purchaser on their behalf has been. I doubt, however, that the PAC will find that this trend has been to the taxpayer's advantage.
  My final observation about privatisation is that I hope that, after last week's vote in the House of Lords on the privatisation of the Recruitment Advisory Service, the Government will not underestimate the perhaps sometimes sentimental resentment that a policy of apparently ruthless privatisation can promote. We heard something of that in the speech of the right hon. Member for Bishop Auckland (Mr. Foster). It is quite a sight to see him with his hon. Friend the Member for Hartlepool (Mr. Mandelson) at his side—the new Labour paladins of institutional conservatism.
  Not long ago, HMSO celebrated its 200th anniversary. Occasionally, a Conservative Government—like Labour Front Benchers—may like to recall that Conservatives
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  used to hold that antiquity is a merit and that a tradition of public service over a long period is worth preserving: I believe that it is called civic Conservatism.
  The specific matter that I want to consider today is the terms on which Government copyright material is made available for publication and for dissemination by the private sector, whatever happens in respect of the privatisation of HMSO.
  At this point, I declare an interest, albeit expired. In 1994, the commercial publishers asked me to give them some advice; I did so, and duly declared it in the Register of Members' Interests. My relations with the Publishers Permissions Group have long since ended but, as so often with such transactions—a point perhaps not sufficiently recognised in the Nolan debate—through my dealings with the group I was able to learn about an important issue. How should the undoubted public interest in offsetting the costs of the Government's publishing activities be balanced against the public interest—another public interest—in the widest possible access to Government publications?
  Three factors make that an increasingly important and difficult issue. The first is the advent of electronic publishing. Listening to the hon. Member for Glasgow, Springburn (Mr. Martin), who referred to such matters as storage, I wondered whether he understood the possible implications of electronic publication, which could transform the current position. Secondly, there is the increasing publication by Government of a vast range of non-statutory material, known in the jargon as "quasi-legislative material" or QLM. That includes a number of categories—planning policy guidance notes, circulars from the Department for Education and Employment, Home Office guidance on access to children in care—thousands of such documents are published every year. The third important factor is the growing commercialisation of government—both in HMSO in recent years and, in future, in Departments with delegated budgets, delegated authorities and a brief to maximise their earnings.
  Those developments are taking place against a background of long-standing arrangements between the Government, through HMSO, and the commercial publishers, in relation to the old-fashioned printed legislative material. We have had a simple royalties system and a non-bureaucratic approach to licensing, which has made possible the growth in the United Kingdom of large-scale, high value-added commercial publishing operations—whose exports, incidentally, have risen substantially—and which has developed extensive services for users in the courts and elsewhere. This has helped to secure the public interest in the widest and deepest dissemination of legislation and governmental material.
  However, with the emergence of the three factors that I mentioned earlier, those long-standing arrangements have come under increasing strain. The issue on which I advised the Publishers Permissions Group in 1994 related to its dispute with HMSO about the terms for the publication of quasi-legislative material in printed form, given that the growing commercialisation of HMSO was making it increasingly demanding in respect of royalties and licensing arrangements. That dispute was satisfactorily resolved, and I was able to help; but a dispute continues in regard to the electronic publishing both of legislative materials and of QLM.

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  What material are we talking about? My more technologically advanced colleagues will understand these matters better than I. They include multiple on-line information services, distributed databases—for example, CD-rom—self-standing electronic editions such as electronic books, multiple transaction support systems, licensed loadings on to user databases, and fax and satellite document delivery systems. All those are beginning to be important factors in the information marketplace.
  In relation to all those new forms of publication, the Government must now decide how to balance the narrow perceived public interest that Departments have in exploiting their control over the publication of Government material with the wider public interest in facilitating publication of that material by commercial publishers using the most advanced technologies. Of course, such issues are not unique to the United Kingdom. A statement from the Office of Management and the Budget in the United States sums them up admirably:
  "The information policies contained in the PRA"—
  the Paperwork Reduction Act—
  "are based on the premise that government information is a valuable national resource and that the economic benefits to society are maximised when government information is available in a timely and equitable manner to all."
  That is surely the central issue at stake.
  "Maximising the benefits of government information to society depends, in turn, on fostering diversity among the entities involved in disseminating it… some nations take advantage of their domestic copyright laws that do permit government copyright and assert a monopoly on certain categories of information to maximise revenues. Such arrangements tend to preclude other entities from developing markets for the information or otherwise disseminating the information in the public interest."
  I consider that an admirable statement of the position. I was pleased to note that in his statement on 13 December my right hon. Friend the Chancellor of the Duchy of Lancaster said—speaking on behalf of the Crown—said that he would like much greater access to Government documents to be provided. That is reported at column 998 of Hansard.
  I want to emphasise what the United States Office of Management and the Budget says about the way in which information markets develop and expand when a non-restrictive approach is followed. Not only is there an important public interest in promoting the use of new electronic media for disseminating information about Government; the commercial interest of Government in exploiting their copyright material will also be promoted if they pursue a less restrictive policy.
  With the delegation of many decisions from HMSO and the Office of Public Service to various Departments, I believe that there is a real danger that these wider public interests will be forgotten as fragmentation in Whitehall increases. We need strong and effective central guidance in regard to this issue. I welcomed what my right hon. Friend the Chancellor of the Duchy said, in response to an intervention, about the importance of such guidance, and I hope that the Parliamentary Secretary will take the opportunity to expand on that point about strong central guidance in connection with what I have said about electronic material. Let me add that, when it comes, such
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  guidance should be timely, and it should take account of the fact that, whatever Governments may be up to, their commercial partners have a business to run.
  8.56 pm
  Mr. John Garrett: As I pointed out in our debate on the privatisation of HMSO on 18 December, I have a strong constituency interest: 900 members of HMSO's staff work in its head office, which is in my constituency. Notwithstanding the Minister's compliments, the morale of those employees is now very low, mainly because of the lack of consultation—consultation that was promised, but not delivered, by the Government.
  Since that debate, all developments in HMSO have been shrouded in secrecy. The unions were told by Coopers and Lybrand, which is currently conducting the privatisation, that the sale timetable was confidential; yet it is known that that timetable has slipped. Will the Minister confirm that it is slipping more every day? The unions have not seen the information memorandum that goes to all bidders, or any other details of the tender. They have not seen the 1996 budget, although three months of the financial year have gone by. They have not seen the 1995 annual accounts, although such accounts are normally published in February. Although these accounts have not been published, it is believed that they show a huge and unprecedented loss—obviously as a result of the introduction of many exceptional items.
  Such items have been packed into the accounts—for example, £23 million for redundancies in 1995 and 1996, £3 million for property write-downs, £3.5 million for stock write-offs, the cost of commissioning a new passport line, the establishment of the Manchester site, and the launching of the Banner trademark and corporate identity.
  The Minister said that the aim of privatisation was to obtain more business from the private sector, but staff and managers, who know much more than he does, are not confident that that will happen. They also have no faith that the Transfer of Undertakings (Protection of Employment) Regulations will preserve their terms and conditions, given that the application of the regulations is weak in areas of technological change—and HMSO is an area of rapid technological change.
  The Minister says continually that there will no break-up of HMSO, and that the printing will not be split from the publishing. However, he never mentions the 40 per cent. of the business that comes from office supplies, which enables a spreading of the overhead and makes the printing and publishing activities more viable than they would be otherwise. In other words, HMSO could price itself out of the business if it lost its office supply activities. That fact is never mentioned. Will the Minister confirm that, when he says that there will be no break-up, he is referring to printing, publishing, office supplies and other services?
  The staff point out that their customers and suppliers are already holding back business because of HMSO's uncertain future. Some customers are not placing orders, and suppliers are not putting business their way. Why should they, when, under a privatisation arrangement, those suppliers could be in competition with HMSO? HMSO is no longer the publishing first choice for many of its former customers. Customers and suppliers, looking at the uncertainty hanging over it, are beginning to withdraw their business.

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  Recently, 100 jobs were lost, and 190 jobs will be lost in preparation for privatisation. The Minister must be aware that 90 of those jobs are from the south London Press. What will that do to parliamentary printing services? Of course, the most able people are leaving. Staff members have told me: "I've hardly done any of my proper work recently—I'm running around doing so much privatisation work".
  The efficiency and effectiveness of the present organisation is suffering already. Staff fear that any purchaser would want primarily to asset-strip HMSO— it would want not only its property but its customer list. A purchaser would cash in on the years of fine service that HMSO has provided to its customers, and collar the customer list.
  Mr. Nigel Evans: Will the hon. Gentleman give way?
  Mr. Garrett: No, not for the moment.
  Privatisation is purely ideologically driven: there are no strong arguments in its favour. In the public sector, HMSO can use that sector's purchasing power and huge economies of scale to hold down prices, and it can spread its purchasing across an enormous range of suppliers. Under public ownership, security is guaranteed: HMSO handles many secure and confidential Government and parliamentary papers with complete security. It has always been leak-proof, in spite of the very high security and confidentiality of the material that it prints and publishes.
  HMSO publishes important, but limited-interest, publications—for museums, for example—that a private publisher would not publish, because they are not sufficiently profitable. Prices will increase in that area, or the supply of publications will disappear altogether. Many jobs are at risk, as we know from previous privatisation experiences. Redundancy is always the first act of someone who takes control of an organisation in that sort of situation.
  Norwich is suffering record levels of unemployment, having lost at least 2,500 jobs in the past few years from Nestle, Norwich Union, gas and electricity, Anglia Television and Colman's. HMSO—an important constitutional safeguard—is to be flogged off cheaply at massive cost to my constituents and their families. There is no need for, and no benefit to be derived from, that act of vandalism.
  In his statement to the House on 13 December, the Chancellor of the Duchy of Lancaster said:
  "I pay tribute to the management and staff of HMSO for their commercial success in recent years".
  Why are the Government selling off such a successful enterprise—particularly when they have spent so much money on developing its services and slimming down its numbers?
  The Chancellor continued:
  "The public sector market in which HMSO competes is shrinking".
  HMSO is the largest print buyer in the country, so why is it not allowed to compete in the market outside Government? Why is it not allowed to compete more effectively in Europe? The public sector market in Europe is not shrinking—certainly not for an organisation with HMSO's success record.
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  The Chancellor said:
  "Under no circumstances will we offer the printing and publishing businesses separately".
  I have already said that that is not the worry: it is printing, publishing and office supplies that matter as the latter help to spread the overhead. The publishing side clearly includes bookshops and warehouses. I seek the Minister's assurance that he will return to Parliament if anything should arise that affects the guarantees that he is now giving to the House.
  The Chancellor of the Duchy went on:
  "The key point is that the buyer must be fully acceptable to Parliament".
  However, tonight he said that the buyer must be acceptable to the Government. Therefore, the House must be sure that, when a buyer is found, the matter will be referred back to Parliament for its approval.
  The Chancellor stated:
  "Parliament's requirements will be enshrined in a binding and enforceable contract".
  What would happen if, at some point, the new owner gave notice that the contract's requirements—including the overnight printing of Hansard—could not be met? Resorting to the courts for breach of contract is hardly an adequate remedy, as I pointed out on 18 December. What will we do in the meantime while we are dragging the owner through the courts?
  He continued:
  "The type of sale we envisage would mean the buyer taking on HMSO staff with their existing terms and conditions."
  There is already evidence that the terms and conditions of the staff are worsening. Do the existing terms and conditions include pensions? It is far from clear from my discussions with the management as to whether pensions are protected.
  Tonight's debate centres on the parliamentary concern, which is very great. I have already mentioned the future of the south London Press, which is so important for the production of Hansard. It is a costly operation, and could easily be sacrificed by a profit-driven contractor replacing HMSO. We need an absolute guarantee of overnight production facilities in London, and a guarantee of space and facilities for the House of Commons staff who work at the Parliamentary Press. The tender document should not omit that important consideration.
  I have also mentioned the information memorandum about HMSO's business that is being prepared for distribution to potential bidders. It will be absolutely essential to ensure that it contains an accurate description of the obligations that a purchaser will assume in regard to the provision of services to Parliament.
  Continuity of staff employment is needed in the preparation of parliamentary papers. It is a complex and specialist job. Although I know the printing and publishing industry very well, I cannot think of any organisation with that combination of skills.
  Any purchaser of HMSO must accept the new supply and service agreement with the House authorities, particularly in so far as it concerns the right of the House to regulate the production and reproduction of its documents in paper and in electronic form. I remind the Minister that, as I understood it—perhaps it will be made clear later in the debate—he said that Parliament could refuse to accept a bid from an outside private organisation

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  if the House of Commons Commission—of which I confess I am a member—considered that parliamentary services would not be adequately provided.
  We have to establish who is in charge, and who makes the final decision. Is it the Government? Is it Parliament or the House of Commons Commission? Certainly I shall insist that the Commission gets to the bottom of the problem.
  Any purchaser should be required to freeze the cost in real terms of the published papers and those supplied to the House. The House should be credited with a share of future savings arising from technological change and improvement. There should be safeguards to prevent the break-up of the business or its sale to an overseas buyer, and to take action if a private stationery office fails to provide the service we need. The Minister has always skated over that. Who carries the can for making sure that it happens? Who is ultimately accountable? Will the House have an opportunity to approve the bid when it comes in?
  On 18 December, I referred to the words of the Speaker:
  "HMSO staff and management acquire experience and knowledge of those complexities"—
  she was referring to parliamentary documents and procedures—
  "as they progress from job to job in the organisation; and they are brought up in the tradition that in all circumstances the requirements of Parliament are paramount."—[Official Report, 18 December 1995; Vol. 268, c. 989–990, 1296.]
  I do not believe that the requirements of Parliament can be guaranteed. I do not believe that jobs in Norwich can be guaranteed. I do not believe that anything can be guaranteed. It is a gamble with an important constitutional organisation. The privatisation is quite unnecessary, and certainly should be postponed.
  9.8 pm
  Sir Patrick Cormack: It will come as no surprise to my right hon. Friend the Chancellor of the Duchy to know that I am not an enthusiast for the Government's proposal. He defended it with a remarkable fastidiousness tonight and with the clarity and courtesy that we always expect of him. The same courtesy was extended to me last week when he kindly arranged for me to visit the Parliamentary Press. On a very busy day, he accompanied me and we spent an interesting and instructive two hours there. I hope that he will not mind my referring to that and to some of my conclusions following that visit.
  I must be quite plain with the House. As an old-fashioned Tory—and I make no apology for that— I am not a zealot for change. I believe in the old adage that if it is not necessary to change, it is necessary not to change.
  I have heard nothing over the last four months to persuade me that it is necessary to privatise HMSO. I am concerned across the whole range. I declare an entirely honorary interest as a Royal Commissioner of Historical Manuscripts whose publications are published by HMSO, and are among the quality publications produced in small numbers to which reference has been made.
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  I am concerned about the threat to continuity if there is a changeover, and whether any commercial publisher would really consider that these works of great erudition and scholarship merit publication. I will not talk about that aspect tonight, because my right hon. Friend has been extremely generous and has agreed to see the chairman of the commission, who is also the Master of the Rolls, myself and another leading commissioner, Lord Blake, to discuss our anxieties and concern. We look forward to that meeting, and it would be wrong of me to anticipate what might transpire.
  I will concentrate tonight on the Parliamentary Press. I happen to believe in the public service. I happen to believe that it is right and proper for the state to do certain things that are not necessarily appropriate—I will not say improper—to be done elsewhere. I put at the top of that list, in the context of tonight's debate, the prompt delivery of parliamentary and public papers.
  When I visited the Parliamentary Press with my right hon. Friend last week, I was impressed by the dedication of the people who work there—and by the experience and long service of many of them—and by the way that we in this House and our colleagues in the other place are served day after day, night after night. It is quite remarkable.
  I think back to my early days in the House in the early 1970s, when Hansard was in a different format, was set in hot metal and printed by letterpress, and all the rest of it. Today, the Parliamentary Press has all the wonders of modern technology at its disposal. It is remarkable that it maintained such a high degree of service in the old days, but I digress. The press certainly maintains that level of service today.
  During our visit, senior management showed us a video of the opening of the new works at Nine Elms by one of your distinguished predecessors, Mr. Deputy Speaker— Mr. Speaker Weatherill. In his speech at that opening, Mr. Speaker spoke of the high quality of service that the House had come not only to expect but to take for granted. We do take it for granted.
  As a Chairman of Committees, I can only echo and endorse the remarks of the hon. Member for Glasgow, Springburn (Mr. Martin). You will know, Mr. Deputy Speaker, from the days when you chaired Committees, that the first thing that happens if Hansard is not ready in time is that there is a string of points of order. I have suspended a Committee while its members have waited for papers, but that is a rare occurrence. Day after day, innumerable Committees sit. Day after day, Governments introduce orders and Bills that have to be printed with meticulous accuracy. One rarely finds mistakes, and it is rare for any sort of slip-up on a deadline to occur. I can hardly remember one such occasion.
  When hon. Members arrive here in the morning, they can collect their copy of Hansard from a very early hour. If any hon. Member is so minded, he or she can pick up a copy of Hansard before 8 o'clock tomorrow morning, and, if they have nothing better to do, read the speech that I am making this evening. We have almost come to take this remarkable service for granted.
  I worry about letting out this service to the commercial sector—not because I have doubts about the technical competence to print of outside firms, but because I believe it should be under public control. My right hon. Friend has questioned the wisdom of hiving off the service and the House accepting responsibility for the Nine Elms

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  works. I would not favour that as the best solution. It is true that 90 per cent. of what is published is parliamentary; virtually all the other 10 per cent. consists of the London Gazette, a highly specialised but necessary publication that comes out every day.
  I do not find it horrifying if some public subsidy is involved in the publication of these papers. In an age when this place is not exactly looked up to with admiration, it would be a very good thing if we disseminated our parliamentary papers more widely— specially to the young. It is a scandal that schools cannot afford to take Hansard, even though the price has come down to £5 a day. I wonder how many hon. Members realise what I noticed last week—that the weekly Hansard now costs only about £6, which represents one of the great bargains. It should be more heavily promoted, and I hope that more and more schools and colleges will take it.
  If there has to be a continuing public subsidy to ensure the quality production and regular delivery of parliamentary and state papers, will that be an indictment of the system? Of course not. I therefore ask my right hon. Friend to think about this matter very carefully. I know that he takes these points seriously, because he and I have discussed them. He spoke tonight with complete conviction and sincerity.
  Still, I return to a point that I raised in an earlier intervention—the future ownership of the Parliamentary Press. Let us imagine for the sake of argument that the sale of the press goes through and that the contract is drawn up scrupulously and on the best legal advice. Let us further imagine that the buying company does so with wholly honourable intentions.
  Then let us imagine another recession at some future date. That is not impossible—these things have happened before, and they might happen again, whoever is in charge. Let us then imagine that someone who is less scrupulous decides that he wants to buy and split up the company. Such a person may be cast in the mould of our former colleague, known affectionately when he was here as "the bouncing Czech": the late Robert Maxwell.
  I need not continue the analogy to show that no guarantee given at the Dispatch Box, however clearly and honourably spelt out, can guard against contingencies of this sort. Unless we keep control ourselves of a body owned by Parliament or by the Government, such a guarantee is impossible. I believe that we owe it to our constituents and to those we serve to be able to demonstrate that such a guarantee can be met.
  This is a small privatisation in the general scheme of things. I am one of those who had no misgivings about many of the privatisations that we have put through the House. I pay tribute to the ingenuity and dedication of those who brought them before us. I voted for them with varying degrees of enthusiasm, but without any feeling of real regret.
  I am unhappy about what is now proposed, and I hope that my unhappiness has transmitted itself to my exceptionally courteous right hon. Friend the Chancellor of the Duchy. I hope that, even at this late stage, he will think through once more the potential consequences of second and subsequent ownership for parliamentary democracy in general, and for the delivery of our papers in particular.
  9.20 pm
  Mrs. Gwyneth Dunwoody: It is a privilege to follow the hon. Member for South Staffordshire (Sir P. Cormack), because he has encapsulated the real worries about this crazy scheme. I shall not detail—as many of my colleagues have done so ably—the practical problems that the House of Commons and the other place will face if this bizarre privatisation goes ahead; I want simply to make one important point.
  It is not an accident that three members of the Chairmen's Panel have spoken tonight, from both sides of the House. It is not an accident that some of my colleagues who are waiting to speak have been Members of the House for a long time. People learn what is being done in their name because information about Government business is disseminated. The House of Commons has taken the power to control the Government, to question the Government, to choose as a House occasionally, and to oppose the Government because the people believe that they have the right to know what is happening and what is being done at every level.
  It is precisely that freedom of information that I believe is at risk. That may sound overly dramatic, but in a nation that receives less and less information about Parliament from the press, and that finds it more and more difficult to learn about day-to-day decisions that affect people at every level of their lives, what happens to parliamentary papers is so fundamental that it ceases to be a simple matter of whether more money could be made or less money could be spent if the contract were handed over to a private firm, and becomes something so essential that I should have thought even the present Government would have had some sense of how shameful it is to behave in this manner.
  The Chancellor is a reasonable man, which is why the Government eternally put him up to undertake their unreasonable projects, but the reality is that the House is deeply concerned. The views of the hon. Member for South Staffordshire on privatisation will be different from mine. I have seen the reality of the sale of state assets, including the immediate redundancies, the removal of pension rights, and the refusal to accept responsibility for the damage that is done to the lives of many who have shown enormous loyalty to the state all their working lives but are thrown aside for some bizarre doctrinal reason; but my objection to this privatisation is as a Member of the House of Commons. Unless people know what is happening to their taxation, to their social security and to all those enormous and important matters that are debated in the House, they will be not only poorer, but at risk.
  No one has convinced me that the sale of the printer of parliamentary papers to a private sector employer will protect the interests either of the House of Commons or of my constituents. No one has said anything that will convince me of that. The reason is simple. The Chancellor knows from his previous posts, and from his present one, that he cannot give those guarantees to Parliament. He cannot guarantee that, in future, Parliament will receive the service that it has always enjoyed from reliable and faithful printers. I am talking of a guarantee not for 10 years, but for many, many years.
  There has never been a leak of any parliamentary business from HMSO. No one has put his commercial interests ahead of the interests of Parliament. No one has

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  sold information. No one has found a way of making money from his responsibilities in HMSO. Let the Minister assure me that that will be the position in future. He knows that he cannot do that. He still has time to abandon this irresponsible and tatty little scheme. That is what it is. It is a contemptible little scheme, and it should be abandoned now.
  9.25 pm
  Mr. Robert G. Hughes: The arguments that we have heard in opposition to the scheme—they have been advanced mainly by Opposition Members—revolve around whether they have confidence in HMSO staff being able to compete with other printers and publishers on an equal basis. It seems that they do not, although they dress up their arguments in various ways. I shall take up, first, a suggestion that we have heard before from Liberal Members.
  This evening, the Liberal spokesman, the hon. Member for Littleborough and Saddleworth (Mr. Davies), said that, by remaining in the public sector, HMSO could compete with the private sector. He claimed that that would be entirely reasonable. We are told that HMSO lost millions of pounds in the past financial year. It is suggested that it could compete with private sector printers and publishers but would not be able to go bankrupt, that it would be able to borrow at lower rates than those available to the private sector and would not pay corporation tax. Apparently it would be perfectly reasonable for HMSO to be in competition with the private sector.
  I note that the hon. Member for Littleborough and Saddleworth shakes his head. I listened closely to what he said. I begin to have a great deal of sympathy with friends of mine who were members of the Social Democratic party, who were in partnership with the Liberals. Some of them are now in the Labour party and others are in the Conservative party. They told me horrendous tales of the Walter Mitty economics that they had to deal with when trying to deal with the Liberals. If the Liberals believe that it is reasonable to remain in the public sector and to enjoy all the advantages that go with that while competing with the private sector, they are not living in the real world.
  Mr. Chris Davies: Does the hon. Gentleman recall my saying that a level playing field should be established and that it would be perfectly reasonable for HMSO to pay corporation tax? If he did not, perhaps he should wash out his ears.
  Mr. Hughes: Being rude does not strengthen the hon. Gentleman's argument. He says that he wants a level playing field, but he is prepared to accept everything that would make it uneven.
  Members of HMSO's staff who are listening to the debate should understand that the Liberal party's approach is nonsense and could not possibly be implemented. It is not a serious proposition. It could never come to fruition. The hon. Member for Littleborough and Saddleworth does not serve the interests of his constituents. I have visited the Oldham works, and the staff there should not believe that the Liberals' approach is a runner.
  Serious remarks have been made about Parliament's work. We must take seriously the publication of parliamentary papers. It is the fact, however, that all the
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  points made in Madam Speaker's letter have been answered. We are only 78 days into the new supply and service agreement, which is legally binding, and trying to overturn it in that time period is a bit premature, even for the modern Labour party.
  The reality is that Parliament will be a major customer for whoever publishes Parliament's papers, takes over HMSO or gets the contract. If Parliament wants to lay down any criteria, such as that there should be a press in London and that that should be a part of the legally binding contract, as I think it should—I agree with others on that point—Parliament can do so.
  The answer to the question of the hon. Member for Norwich, South (Mr. Garrett) is that the decision on who buys HMSO lies with the Government, but it also lies with Parliament—although I hope not with Parliament on the Floor of the House. If there is to be a serious attempt to express Parliament's interests and to ensure that we have a proper contract, it will have to be done not through a reference back to Parliament, but through Committees and, in particular, through the House of Commons Commission. If Parliament wants to lay down any of those criteria, it can do so, and it will have a decisive say in the matter because Parliament is such a large customer.
  We have not really heard concern about parliamentary papers—[Interruption.] The hon. Member for Hartlepool (Mr. Mandelson) should not get too concerned about time—I am sure that he will get his quarter of an hour to speak. My hon. Friend the Minister has kindly allowed me a couple of minutes.
  Mr. Peter Mandelson: Do not worry; I shall take it out of his time.
  Mr. Hughes: That is fine. He is happy with that because he can make extremely good points in a very short time, unlike some—unlike me, and unlike the right hon. Member for Bishop Auckland (Mr. Foster).
  We have heard the normal knee-jerk response to privatisation. HMSO staff will have to consider what they got out of the Labour party today. There was no mention of them in the motion, and it would not be adequate to say that we debated the privatisation before Christmas. The employees must have believed that the assurances they were given by the Labour party before Christmas and the debate they were promised after Christmas related to them, but they clearly did not. They received no plan or promise to renationalise and no expressions of confidence in their ability to compete. In short, they got nothing— no promises, no hints and no policy—but a jumble of meaningless words. That will not help the staff at HMSO. Allowing them to compete in the private sector will help them, and that is why I back the Government's objectives.
  9.32 pm
  Mr. Peter Mandelson: The Minister argued, when opening this debate, that commercial freedom for HMSO will simultaneously offer opportunities for its growth, bringing jobs and security to employees, and ensure that Parliament's continuing public service needs will be paramount in the future operation of HMSO. I believe that the Minister's argument was well meaning but wholly unconvincing.
  I do not believe that the Minister can attempt to shoot a privatised HMSO into a commercial free orbit and keep it tied down by legally binding public service guy-ropes,

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  as he has sought to argue tonight. Instead of lifting off, a privatised HMSO will find it impossible to leave its launch pad, which will pose a serious threat to job security in HMSO, and, in the ensuing chaos, Parliament's vital needs will be a very bad casualty.
  Since the proposal to privatise HMSO was first made, it has been understood and accepted that the measure and its effects on the supply of papers to Parliament will have to be acceptable to the House, regardless of the need for primary or secondary legislation. In our debate on 18 December, the Chancellor of the Duchy of Lancaster said:
  "I cannot dictate Parliament's wish or conclusions on the matter, and therefore it cannot proceed unless Parliament is satisfied."— [Official Report, 18 December 1995; Vol. 268, c. 1294.]
  It is, therefore, a serious indictment of the Government's handling of the matter that a debate in Government time was not arranged. Throughout, the Minister has shown an astonishing lack of understanding of the concern of hon. Members on both sides of the House, and even in this debate, initiated, I remind hon. Members, by the Opposition in our time, the Minister has failed abjectly— I say that in the nicest possible way—to offer any real assurances about the safeguarding of the services on which the House relies.
  The conditions of service and the protection sought for the work of HMSO were clearly set out in Madam Speaker's letter to the Leader of the House last autumn. The House of Commons Commission, on behalf of which Madam Speaker wrote, was rightly drawn not on the principle of privatisation but merely on the consideration of the matter in relation to Parliament's requirements. The Commission could not have been more explicit. In contrast, the Minister tonight could not have been more evasive or unconvincing.
  Let us remind ourselves of the concerns raised by the Commission. Madam Speaker's letter warned of the danger of a private sector owner experimenting with cheaper methods of providing the service presently provided by HMSO, leading to falling standards. The Minister has not given a guarantee that that will not happen, and he cannot.
  The Commission insisted that staff of the House should be guaranteed adequate space and facilities in the Parliamentary Press as long as the House required it. There is no guarantee of that beyond the first transfer of ownership. Madam Speaker's letter on behalf of the Commission sought an assurance of continuity in the staffing and management of HMSO, bearing in mind its experience and expertise, and called for adequate training for any new staff. No such binding undertaking has been given by the Minister tonight, because, as he knows, no private owner would ever agree to be bound by such a limitless commitment.
  The Commission wanted the Government to stipulate that there should be consultation before any changes were proposed in management or organisation. No private owner would be constrained in that way, and the Minister knows it. The Commission demanded that an individual in a privatised HMSO be personally responsible and directly accountable—an important word in this context—to the House if any aspect of the service provided went wrong. The Minister cannot deliver that, and has not pretended to do so. He speaks of legally binding contracts, but we know that such contracts can take an eternity to invoke
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  and a fortune to enforce. His only recourse is to threaten cancellation of the contract. Such a right to termination has little meaning when the consequence would be unmitigated chaos in the supply of Parliament's papers.
  The Commission went on to insist that the existing standards negotiated in the new supply and service agreement with HMSO should be maintained and that no attempts should be made to water them down without the agreement of the House authorities, but, as everyone knows, it will be nigh impossible to spot the slimming down, short cuts and cutting of corners—the considerations of cost and profit that privatisation will inevitably demand. Even if they are spotted in time, the House will have no real leverage to ensure that the dilution is stopped or reversed.
  Last, the Commission expressed a desire to see no increase in real terms in the charges paid by the House or the prices paid by the public. I suggest that that matter touches on the main issue under debate tonight. Once transferred to the private sector, market forces will take over, whatever the Minister says or tries to claim in the debate tonight. Parliament's influence over charges and prices, like everything else, will quickly fall away and be finished for ever. More fundamental and crucial in this debate, supplying the House with the papers it needs at the time of its choosing and in the exact place it requires cannot be determined by market forces or the power of commercial competition. That recognition is at the root of our disagreement with the Government's privatisation proposal.
  If ever there was a definition of public service, it is surely providing the essential wherewithal Parliament needs to carry out its business. The Minister is astonishingly cavalier about that; he can offer neither the satisfactory arrangements we need nor the power to enforce them. When the choice arises between meeting the requirements of Parliament, which are often costly and sometimes immediate, and almost always have to be met under pressure, and meeting the demands of equally insistent commercial customers, where will the loyalty and commitment of the privatised HMSO lie?
  Mr. Sutcliffe: My hon. Friend referred to loyalty and commitment. Is it not a fact that the whole privatisation episode is a betrayal of the work force, who are committed to providing the services that my hon. Friend is talking about? The work force were thought, in 1992, at the end of a commercialisation study, to need to be more effective and more efficient. The reality is that the seed was sown then for privatisation. People have been made redundant and they have not been shown the loyalty that they have given to the House through their service.
  Mr. Mandelson: I strongly agree with my hon. Friend, and I pay tribute to him, because he has been an effective and doughty champion of the work force at HMSO, as his remarks have just revealed.
  We know that, when the chips are down and market forces rule, and when the privatised HMSO inevitably has to face the rigour of competition, it will not be able to put its commitment to Parliament and our needs first. The Minister has praised the dedicated, cost-effective and high-quality service provided by HMSO at present, and he has spoken glowingly of the traditions and the culture of HMSO. In the light of those remarks and the light of all

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  the remarks made this evening about HMSO's tremendous contribution to the work of the House, we should not tamper or take risks with an organisation that works perfectly well as it is. There is no gain for us, no gain for Parliament and no gain for the public.
  This is not an argument about the broader merits and demerits of privatisation. This is a debate about a specific privatisation proposal and its very real implications for the House. It is possible to be generally well disposed towards the principle of privatisation without supporting its application in this case, as the hon. Member for South Staffordshire (Sir P. Cormack) demonstrated in a very commanding speech. Where doubt exists—I think that much doubt has arisen as a result of the Minister's hollow words of reassurance and the well-meaning but ultimately unsatisfactory sentiments he expressed tonight—it would be better to pause for further thought.
  We need time to consider the matter more thoroughly, especially as Parliament's ability to bind new owners after privatisation would be almost non-existent, as many hon. Members have observed this evening. On that basis, I urge all hon. Members to vote for the motion and to put this needless, pointless privatisation to rest once and for all.
  9.43 pm
  The Parliamentary Secretary, Office of Public Service (Mr. David Willetts): The first proposition that my right hon. Friend the Chancellor of the Duchy of Lancaster put to the House today was simply that HMSO could not carry on as it had for the past few years. HMSO has a problem in terms of its performance, its turnover and its market share. The figures—[Interruption.] I am about to give the figures which show the nature of the problem that HMSO confronts.
  In 1990, HMSO had a turnover of £389 million. The figure steadily fell until, in 1994, its turnover was down to £350 million. Similarly, it has been reducing its staff; the trends are downwards rather than upwards.
  Mr. Derek Foster: Will the Minister confirm that the turnover for the current year is likely to be £369 million, rather up on the figure that he quoted?
  Mr. Willetts: I am not prepared to confirm or deny any of the figures that the right hon. Gentleman has quoted, either now or earlier in his speech. However, I will say that they are broadly in line with the draft accounts that we have seen.
  The right hon. Gentleman has thrown around figures for HMSO's performance in 1995—for example, HMSO's losses. He was so excited about his leak that he forgot to consider the significance of those figures. That significance has nothing to do with privatisation. The figures for HMSO's losses were a consequence of the measures that it had to take simply to improve its competitiveness, so that it could continue selling its services to public sector purchasers who had a legitimate freedom to take their business elsewhere. It was nothing to do with privatisation.
  As the previous chief executive warned in June 1994, before we embarked on privatisation, HMSO faced the prospect of losing 30 per cent. of its staff simply to meet
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  the competitive challenge of other organisations free to sell their services to the public sector. That is the challenge that HMSO faces.
  We are told there is an easy option—to liberalise the regime under which HMSO currently operates so that it is no longer subject to the notorious Treasury rules that have been cited at various times in the debate. I assure the House that the Government have gone as far as is practicable to liberalise the regime under which HMSO operates, which is now far more liberal than it was just a few years ago. We have given it permission to sell its services to the public sector abroad. In the past year, we have allowed it to sell its services to the private sector where there is surplus capacity within the normal scope of its operations. However, that liberalisation goes absolutely to the limits of what is acceptable for a public sector body, and on its own will not bring HMSO out of the long-term decline that it faces.
  We have heardvarious pleas to go further. The hon. Member for Littleborough and Saddleworth (Mr. Davies) made a series of suggestions on how HMSO could have greater freedom. For example, he wanted it to have an arm's-length relationship with Ministers and to be exposed to paying corporation tax so that it would be free to compete with the private sector. What I did not hear from him—or, indeed, from any other hon. Member who spoke in the debate—was what he would say to a private printing firm or office supplier in his constituency if that firm suddenly found that it had lost business, for which previously it had a clear commercial contract with another private sector purchaser of its services, to HMSO. What would he say to someone who went to one of his surgeries and said that his firm had been put out of business or had lost business as a result of a public sector body operating as a public sector trading fund?
  Mr. Chris Davies: If there were a level playing field, which is what my party wants to establish, the simple answer would be that that is the way that the market operates. The organisation may be publicly owned, but the shareholders happen to be the taxpayers.
  Mr. Willetts: The hon. Gentleman wants a level playing field. We can imagine what it would look like— the organisation would pay corporation tax; it would have a genuinely arm's-length relationship with Ministers; it would have no guarantees for its borrowings; it would be at genuine risk of going bankrupt; and there would be no ministerial intervention. Yes, that is a level playing field and it is called privatisation. That is how we achieve a level playing field. It is muddled thinking to believe that we can have all those things without privatisation.
  Mr. Michael J. Martin: The Minister says that privatisation is the level playing field. Why does he not introduce a Bill so that there can be scrutiny in Committee and thorough examination of the safeguards that all hon. Members want?
  Mr. Willetts: There is no legislative requirement for a Bill, but there are legitimate practical questions about the form of the privatisation. The hon. Gentleman made a significant but short speech with a large number of such questions.
  Mr. Garrett: Will the Minister give way?
  Mr. Willetts: I am sorry, but I must make some progress in dealing with the practical questions.

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  I shall first try to answer the questions of my hon. Friend the Member for Norwich, North (Mr. Thompson), who spoke on behalf of his constituents. If there is time, I will then try to answer the hon. Member for Norwich, South (Mr. Garrett).
  Mr. Mandelson: This concerns the constituency of my hon. Friend the Member for Norwich, South.
  Mr. Willetts: I am answering the points made by my hon. Friend the Member for Norwich, North. First, he asked when TUPE would apply and what its limits would be. I can assure him that TUPE will apply at the point of sale, the point when all terms and conditions of employment are transferred to the new owner. It is not time limited. All employers are free to propose changes to employees' terms and conditions at any time, but they must do so reasonably if they are to avoid liability for breach of contract or constructive dismissal.
  Mr. Garrett: Will the Minister give way?
  Mr. Willetts: Let me finish dealing with the point made by my hon. Friend the Member for Norwich, North.
  A consultation period of 90 days is genuinely regarded by the courts as reasonable in this context. That has nothing specifically to do with TUPE, which applies at the moment the transfer takes place.
  Mr. Garrett: Now will the Minister give way?
  Mr. Willetts: Let me carry on with one more point. I am dealing with the questions raised by my hon. Friend the Member for Norwich, North. The hon. Member for Norwich, South must be patient.
  My hon. Friend the Member for Norwich, North asked what guarantees we could give to staff. The best guarantee for staff is a thriving business. The long-term prospects for staff in the private sector are far better than they would be if HMSO had to remain in a declining public sector market. I assure him that bidders will be asked about their plans for developing the business. Their plans for the future will be a crucial criterion in deciding a suitable new owner for HMSO. As for remaining in Norwich, I repeat the assurance that my right hon. Friend the Chancellor of the Duchy of Lancaster has already given on the point.
  Mr. Garrett: The Minister said that there was no need for legislation, but the Chancellor of the Duchy of Lancaster said that the legislature—Parliament—had a role in choosing the successful bidder for the tender. Who will give final approval for the successful bidder? Will it be done by the Government, by the House as a whole, by the Government tabling a motion for the House to approve, or by the Commission tabling a motion for the House to approve? The HMSO customer that we are discussing is the Commission. It is important that we straighten this out.
  Mr. Willetts: I am conscious of the need to answer that question because Madam Speaker is here. She has pronounced on that subject and made it clear, and the Government entirely follow her point, that the ultimate decision about to whom the business should be sold is a matter for the Government. But the House of Commons,
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  through the House of Commons Commission, has a crucial role in that the Commission will decide, and be able to put to the House, the contract that the House will have for the supply of its parliamentary papers. That is not a matter for the Government.
  Mr. Mandelson: The Chancellor of the Duchy of Lancaster said that the privatisation of HMSO would need to be to the satisfaction of, and have to be approved by, Parliament. In addition to the vote tonight, will the Minister give an undertaking that the other place will also have an opportunity to vote on this measure?
  Mr. Willetts: I shall speak tonight not about what should happen in the other place but about the questions raised by Opposition Members. Those questions essentially concerned the House's obvious crucial requirement to have a service that meets the high standards that it has come to expect. On that, and in answer to the question from the hon. Member for Norwich, South, let me explain in more detail how we see the proposal working.
  In an attempt to be helpful to the Commission, we have submitted a draft contract, which has been prepared with the aim of meeting the understandable concerns expressed, for example, in a letter from Madam Speaker on behalf of the House about the service that the House should expect. It is now for the Commission to consider that draft contract, which is merely an attempt to be helpful—it has no authority—and what it wishes to have as a contract so that it can be confident that its legitimate concerns about the service for the House can be met. The House has its responsibility in that area and we will simply try to help, so far as we can, the Commission's deliberations.
  Mr. Garrett: On a point of order, Madam Speaker. What the Minister is saying is not true, is it? You are the Chair of the Commission and you know very well that we delegated an Officer of the House to examine the contents of the proposed tender document. There is no question of the Commission deciding whether or not the successful tenderer should get the job.
  Madam Speaker: That is not a point for me; it is a matter that must be argued across the Floor of the House tonight.
  Mr. Garrett: Of course it is a matter for you, Madam Speaker.
  Madam Speaker: Order. It is not a matter for me. I have made my views very clear and they have been reported in Hansard for all to see. It is now a matter for debate in the House.
  Mr. Willetts: I am afraid that the hon. Member for Norwich, South misunderstood what I just said. I make it clear that the Government would take the decision on the sale of HMSO and the House of Commons Commission would formulate a contract, drawing on a draft that we have prepared. It is ultimately, however, a decision for the Commission to satisfy itself that any contract it has on behalf of the House of Commons for services provided to this place should meet the requirements of the Commission. That is a matter for the Commission, not for the Government.

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  A series of other questions were raised about the privatisation. What lay behind them was a fundamental uncertainty on the part of the Opposition about privatisation as a policy. The real point is that, after all these years, they still do not understand what privatisation is for and the benefits that it can bring. I am surprised about that, because I have read a book called "The Blair Revolution" by the hon. Member for Hartlepool (Mr. Mandelson). I am not sure whether his right hon. Friend the Member for Bishop Auckland (Mr. Foster) has read it. I have read it—not just that, I have even reviewed it, although, of course, not quite as savagely as the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). What that book says is quite clear:
  "Privatisation has brought about improvements in operating efficiency and facilitated new investment."
  That is precisely the argument for the privatisation of HMSO. It will enable new investment and create new opportunities for a business that cannot thrive in the public sector.
  We were all struck by the fact that the right hon. Member for Bishop Auckland went on and on about how terrible it would be to privatise HMSO, but the one thing he did not offer was any commitment to renationalise it. Perhaps that is no surprise, because in another relevant quotation the hon. Member for Hartlepool told his right hon. Friend what the policy on renationalisation should be. He said:
  "Privatisation has brought some increased productivity, and there will be no mass renationalisation under New Labour."
  Even if the Labour party were by any remote chance to form a Government, we know that it would not dare to renationalise, because by then HMSO would be thriving in the private sector. HMSO would still be free to sell its services—either its printing services or its office supply services—to any public sector body that wished to buy them. It would also enjoy the freedom that Opposition Members claim they wish it to enjoy—a freedom to sell its services to private sector providers. It would do so on the only fair and equitable basis—the only basis that would meet the requirement of the hon. Member for Littleborough and Saddleworth that it should have a level playing field.
  The only genuine level playing field HMSO could have would be as a privatised body that was no longer exempt from corporation tax, was no longer able to borrow from the national loans fund and no longer had the Government standing behind it as a guarantor of its borrowings. That is the right way forward for the HMSO, and it is the best way forward for the staff working for the HMSO. I commend it to the House.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 249, Noes 289.

  Division No. 79]

  [10.00 pm

  AYES

  Abbott, Ms Diane

  Armstrong, Hilary

  Ainger, Nick

  Ashton, Joe

  Ainsworth, Robert (Cov'try NE)

  Austin-Walker, John

  Allen, Graham

  Banks, Tony (Newham NW)

  Alton, David

  Barron, Kevin

  Anderson, Donald (Swansea E)

  Battle, John

  120

  Beckett, Rt Hon Margaret

  Godman, Dr Norman A

  Beith, Rt Hon A J

  Godsiff, Roger

  Bennett, Andrew F

  Golding, Mrs Llin

  Benton, Joe

  Gordon, Mildred

  Bermingham, Gerald

  Graham, Thomas

  Berry, Roger

  Grant, Bernie (Tottenham)

  Betts, Clive

  Griffiths, Nigel (Edinburgh S)

  Blunkett, David

  Griffiths, Win (Bridgend)

  Boateng, Paul

  Gunnell, John

  Bradley, Keith

  Hain, Peter

  Bray, Dr Jeremy

  Hall, Mike

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

  Hanson, David

  Bruce, Malcolm (Gordon)

  Harman, Ms Harriet

  Burden, Richard

  Harvey, Nick

  Byers, Stephen

  Hattersley, Rt Hon Roy

  Caborn, Richard

  Heppell, John

  Campbell, Mrs Anne (C'bridge)

  Hill, Keith (Streatham)

  Campbell, Menzies (Fife NE)

  Hinchliffe, David

  Campbell, Ronnie (Blyth V)

  Hodge, Margaret

  Campbell-Savours, D N

  Hoey, Kate

  Canavan, Dennis

  Hogg, Norman (Cumbernauld)

  Cann, Jamie

  Home Robertson, John

  Carlile, Alexander (Montgomery)

  Hoon, Geoffrey

  Chidgey, David

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

  Chisholm, Malcolm

  Howarth, George (Knowsley North)

  Church, Judith

  Howells, Dr Kim (Pontypridd)

  Clapham, Michael

  Hoyle, Doug

  Clark, Dr David (South Shields)

  Hughes, Robert (Aberdeen N)

  Clarke, Eric (Midlothian)

  Hughes, Roy (Newport E)

  Clarke, Tom (Monklands W)

  Hughes, Simon (Southwark)

  Clwyd, Mrs Ann

  Jackson, Glenda (H'stead)

  Coffey, Ann

  Jackson, Helen (Shef'ld, H)

  Cohen, Harry

  Jamieson, David

  Connarty, Michael

  Jones, Barry (Alyn and D'side)

  Cook, Frank (Stockton N)

  Jones, Jon Owen (Cardiff C)

  Corbett, Robin

  Jones, Lynne (B'ham S O)

  Corbyn, Jeremy

  Jones, Nigel (Cheltenham)

  Cousins, Jim

  Jowell, Tessa

  Cunliffe, Lawrence

  Kaufman, Rt Hon Gerald

  Cunningham, Jim (Cov'try SE)

  Keen, Alan

  Cunningham, Rt Hon Dr John

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

  Dafis, Cynog

  Khabra, Piara S

  Dalyell, Tam

  Kilfoyle, Peter

  Darling, Alistair

  Lestor, Joan (Eccles)

  Davidson, Ian

  Liddell, Mrs Helen

  Davies, Bryan (Oldham C'tral)

  Litherland, Robert

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

  Livingstone, Ken

  Davies, Rt Hon Denzil (Llanelli)

  Lloyd, Tony (Stretford)

  Davies, Ron (Caerphilly)

  Llwyd, Elfyn

  Denham, John

  Loyden, Eddie

  Dewar, Donald

  Lynne, Ms Liz

  Dixon, Don

  McAllion, John

  Dobson, Frank

  McCartney, Ian

  Donohoe, Brian H

  Macdonald, Calum

  Dowd, Jim

  McFall, John

  Dunwoody, Mrs Gwyneth

  McKelvey, William

  Eagle, Ms Angela

  Mackinlay, Andrew

  Eastham, Ken

  McLeish, Henry

  Etherington, Bill

  McMaster, Gordon

  Evans, John (St Helens N)

  McNamara, Kevin

  Fatchett, Derek

  MacShane, Denis

  Faulds, Andrew

  McWilliam, John

  Field, Frank (Birkenhead)

  Madden, Max

  Fisher, Mark

  Maddock, Diana

  Flynn, Paul

  Maginnis, Ken

  Foster, Rt Hon Derek

  Mahon, Alice

  Foster, Don (Bath)

  Mandelson, Peter

  Foulkes, George

  Marek, Dr John

  Fyfe, Maria

  Marshall, David (Shettleston)

  Galbraith, Sam

  Martin, Michael J (Springburn)

  Galloway, George

  Martlew, Eric

  Gapes, Mike

  Maxton, John

  Garrett, John

  Meacher, Michael

  George, Bruce

  Meale, Alan

  Gerrard, Neil

  Michael, Alun

  Gilbert, Rt Hon Dr John

  Michie, Bill (Sheffield Heeley)

  121

  Michie, Mrs Ray (Argyll & Bute)

  Short, Clare

  Milburn, Alan

  Simpson, Alan

  Miller, Andrew

  Skinner, Dennis

  Mitchell, Austin (Gt Grimsby)

  Smith, Andrew (Oxford E)

  Molyneaux, Rt Hon Sir James

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

  Moonie, Dr Lewis

  Smith, Llew (Blaenau Gwent)

  Morgan, Rhodri

  Smyth, The Rev Martin (Belfast S)

  Morley, Elliot

  Snape, Peter

  Morris, Rt Hon Alfred (Wy'nshawe)

  Soley, Clive

  Morris, Estelle (B'ham Yardley)

  Spearing, Nigel

  Mowlam, Marjorie

  Spellar, John

  Mudie, George

  Squire, Rachel (Dunfermline W)

  Mullin, Chris

  Steinberg, Gerry

  Nicholson, Emma (Devon West)

  Stott, Roger

  Oakes, Rt Hon Gordon

  Strang, Dr. Gavin

  O'Brien, Mike (N W'kshire)

  Straw, Jack

  O'Brien, William (Normanton)

  Sutcliffe, Gerry

  O'Hara, Edward

  Taylor, Mrs Ann (Dewsbury)

  Olner, Bill

  Taylor, Matthew (Truro)

  O'Neill, Martin

  Timms, Stephen

  Orme, Rt Hon Stanley

  Tipping, Paddy

  Parry, Robert

  Touhig, Don

  Pearson, Ian

  Trickett, Jon

  Pendry, Tom

  Turner, Dennis

  Pickthall, Colin

  Tyler, Paul

  Vaz, Keith

  Pike, Peter L

  Walker, Rt Hon Sir Harold

  Pope, Greg

  Walley, Joan

  Powell, Ray (Ogmore)

  Wardell, Gareth (Gower)

  Prentice, Gordon (Pendle)

  Wareinq, Robert N

  Primarolo, Dawn

  Watson, Mike

  Randall, Stuart

  Welsh, Andrew

  Raynsford, Nick

  Wicks, Malcolm

  Rendel, David

  Wigley, Dafydd

  Robinson, Geoffrey (Co'try NW)

  Williams, Rt Hon Alan (Sw'n W)

  Roche, Mrs Barbara

  Williams, Alan W (Carmarthen)

  Rogers, Allan

  Wilson, Brian

  Ross, Ernie (Dundee W)

  Wise, Audrey

  Ross, William (E Londonderry)

  Worthington, Tony

  Rowlands, Ted

  Wray, Jimmy

  Ruddock, Joan

  Wright, Dr Tony

  Sedgemore, Brian

  Sheerman, Barry

  Tellers for the Ayes:

  Sheldon, Rt Hon Robert

  Mr. John Cummings and

  Shore, Rt Hon Peter

  Ms Janet Anderson.

  NOES

  Ainsworth, Peter (East Surrey)

  Brandreth, Gyles

  Alexander, Richard

  Brazier, Julian

  Alison, Rt Hon Michael (Selby)

  Bright, Sir Graham

  Allason, Rupert (Torbay)

  Brooke, Rt Hon Peter

  Amess, David

  Brown, M (Brigg & Cl'thorpes)

  Ancram, Rt Hon Michael

  Browning, Mrs Angela

  Arbuthnot, James

  Bruce, Ian (South Dorset)

  Arnold, Jacques (Gravesham)

  Budgen, Nicholas

  Arnold, Sir Thomas (Hazel Grv)

  Burt, Alistair

  Ashby, David

  Butcher, John

  Atkins, Rt Hon Robert

  Butler, Peter

  Atkinson, Peter (Hexham)

  Butterfill, John

  Baker, Rt Hon Kenneth (Mole V)

  Carlisle, John (Luton North)

  Baker, Nicholas (North Dorset)

  Carlisle, Sir Kenneth (Lincoln)

  Banks, Matthew (Southport)

  Carrington, Matthew

  Banks, Robert (Harrogate)

  Cash, William

  Batiste, Spencer

  Channon, Rt Hon Paul

  Bellingham, Henry

  Chapman, Sir Sydney

  Bendall, Vivian

  Churchill, Mr

  Beresford, Sir Paul

  Clappison, James

  Biffen, Rt Hon John

  Clark, Dr Michael (Rochford)

  Body, Sir Richard

  Clifton-Brown, Geoffrey

  Bonsor, Sir Nicholas

  Coe, Sebastian

  Booth, Hartley

  Colvin, Michael

  Boswell, Tim

  Congdon, David

  Bottomley, Peter (Eltham)

  Conway, Derek

  Bottomley, Rt Hon Virginia

  Coombs, Anthony (Wyre For'st)

  Bowis, John

  Coombs, Simon (Swindon)

  Boyson, Rt Hon Sir Rhodes

  Cope, Rt Hon Sir John

  122

  Couchman, James

  Hurd, Rt Hon Douglas

  Cran, James

  Jack, Michael

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

  Jackson, Robert (Wantage)

  Curry, David (Skipton & Ripon)

  Jenkin, Bernard

  Davis, David (Boothferry)

  Jessel, Toby

  Day, Stephen

  Johnson Smith, Sir Geoffrey

  Deva, Nirj Joseph

  Jones, Gwilym (Cardiff N)

  Devlin, Tim

  Jones, Robert B (W Hertfdshr)

  Dicks, Terry

  Jopling, Rt Hon Michael

  Dorrell, Rt Hon Stephen

  Kellett-Bowman, Dame Elaine

  Douglas-Hamilton, Lord James

  Key, Robert

  Dover, Den

  King, Rt Hon Tom

  Duncan-Smith, Iain

  Kirkhope, Timothy

  Dunn, Bob

  Knapman, Roger

  Durant, Sir Anthony

  Knight, Mrs Angela (Erewash)

  Eggar, Rt Hon Tim

  Knight, Rt Hon Greg (Derby N)

  Elletson, Harold

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

  Emery, Rt Hon Sir Peter

  Lait, Mrs Jacqui

  Evans, David (Welwyn Hatfield)

  Lamont, Rt Hon Norman

  Evans, Jonathan (Brecon)

  Lang, Rt Hon Ian

  Evans, Nigel (Ribble Valley)

  Lawrence, Sir Ivan

  Evans, Roger (Monmouth)

  Legg, Barry

  Evennett, David

  Leigh, Edward

  Faber, David

  Lennox-Boyd, Sir Mark

  Fabricant, Michael

  Lester, Sir James (Broxtowe)

  Fenner, Dame Peggy

  Lidington, David

  Field, Barry (Isle of Wight)

  Lilley, Rt Hon Peter

  Fishburn, Dudley

  Lloyd, Rt Hon Sir Peter (Fareham)

  Forman, Nigel

  Lord, Michael

  Forth, Eric

  Luff, Peter

  Fowler, Rt Hon Sir Norman

  Lyell, Rt Hon Sir Nicholas

  Fox, Dr Liam (Woodspring)

  MacGregor, Rt Hon John

  Fox, Rt Hon Sir Marcus (Shipley)

  MacKay, Andrew

  Freeman, Rt Hon Roger

  Maclean, Rt Hon David

  French, Douglas

  McLoughlin, Patrick

  Fry, Sir Peter

  McNair-Wilson, Sir Patrick

  Gale, Roger

  Major, Rt Hon John

  Gallie, Phil

  Malone, Gerald

  Gardiner, Sir George

  Mans, Keith

  Garnier, Edward

  Marland, Paul

  Gill, Christopher

  Marshall, John (Hendon S)

  Gillan, Cheryl

  Martin, David (Portsmouth S)

  Goodlad, Rt Hon Alastair

  Mates, Michael

  Goodson-Wickes, Dr Charles

  Mawhinney, Rt Hon Dr Brian

  Gorman, Mrs Teresa

  Mayhew, Rt Hon Sir Patrick

  Gorst, Sir John

  Mellor, Rt Hon David

  Grant, Sir A (SW Cambs)

  Merchant, Piers

  Greenway, Harry (Ealing N)

  Mills, Iain

  Greenway, John (Ryedale)

  Mitchell, Andrew (Gedling)

  Griffiths, Peter (Portsmouth, N)

  Mitchell, Sir David (NW Hants)

  Grylls, Sir Michael

  Moate, Sir Roger

  Hague, Rt Hon William

  Monro, Rt Hon Sir Hector

  Hamilton, Rt Hon Sir Archibald

  Montgomery, Sir Fergus

  Hamilton, Neil (Tatton)

  Needham, Rt Hon Richard

  Hampson, Dr Keith

  Nelson, Anthony

  Hanley, Rt Hon Jeremy

  Neubert, Sir Michael

  Hannam, Sir John

  Newton, Rt Hon Tony

  Hargreaves, Andrew

  Nicholls, Patrick

  Haselhurst, Sir Alan

  Norris, Steve

  Hawkins, Nick

  Onslow, Rt Hon Sir Cranley

  Hawksley, Warren

  Oppenheim, Phillip

  Hayes, Jerry

  Ottaway, Richard

  Heald, Oliver

  Page, Richard

  Heathcoat-Amory, Rt Hon David

  Paice, James

  Hendry, Charles

  Patnick, Sir Irvine

  Heseltine, Rt Hon Michael

  Patten, Rt Hon John

  Hill, James (Southampton Test)

  Pattie, Rt Hon Sir Geoffrey

  Hogg, Rt Hon Douglas (G'tham)

  Pawsey, James

  Horam, John

  Peacock, Mrs Elizabeth

  Hordern, Rt Hon Sir Peter

  Pickles, Eric

  Howell, Rt Hon David (G'dford)

  Porter, Barry (Wirral S)

  Howell, Sir Ralph (N Norfolk)

  Porter, David (Waveney)

  Hughes, Robert G (Harrow W)

  Portillo, Rt Hon Michael

  Hunt, Rt Hon David (Wirral W)

  Powell, William (Corby)

  Hunt, Sir John (Ravensbourne)

  Rathbone, Tim

  Hunter, Andrew

  Redwood, Rt Hon John

  123

  Renton, Rt Hon Tim

  Taylor, John M (Solihull)

  Richards, Rod

  Taylor, Sir Teddy (Southend, E)

  Riddick, Graham

  Temple-Morris, Peter

  Rifkind, Rt Hon Malcolm

  Thomason, Roy

  Robathan, Andrew

  Thompson, Sir Donald (C'er V)

  Roberts, Rt Hon Sir Wyn

  Thompson, Patrick (Norwich N)

  Robertson, Raymond (Ab'd'n S)

  Thornton, Sir Malcolm

  Robinson, Mark (Somerton)

  Thurnham, Peter

  Roe, Mrs Marion (Broxbourne)

  Townend, John (Bridlington)

  Rowe, Andrew (Mid Kent)

  Townsend, Cyril D (Bexl'yh'th)

  Rumbold, Rt Hon Dame Angela

  Tracey, Richard

  Sainsbury, Rt Hon Sir Timothy

  Tredinnick, David

  Scott, Rt Hon Sir Nicholas

  Trend, Michael

  Shaw, David (Dover)

  Twinn, Dr Ian

  Shaw, Sir Giles (Pudsey)

  Vaughan, Sir Gerard

  Shephard, Rt Hon Gillian

  Viggers, Peter

  Shepherd, Sir Colin (Hereford)

  Waldegrave, Rt Hon William

  Shepherd, Richard (Aldridge)

  Walden, George

  Shersby, Sir Michael

  Walker, Bill (N Tayside)

  Waller, Gary

  Sims, Roger

  Ward, John

  Skeet, Sir Trevor

  Wardle, Charles (Bexhill)

  Soames, Nicholas

  Waterson, Nigel

  Speed, Sir Keith

  Watts, John

  Spencer, Sir Derek

  Wells, Bowen

  Spicer, Sir James (W Dorset)

  Whitney, Ray

  Spicer, Sir Michael (S Worcs)

  Whittingdale, John

  Spink, Dr Robert

  Widdecombe, Ann

  Spring, Richard

  Wiggin, Sir Jerry

  Sproat, Iain

  Wilkinson, John

  Squire, Robin (Hornchurch)

  Willetts, David

  Stanley, Rt Hon Sir John

  Wilshire, David

  Steen, Anthony

  Winterton, Mrs Ann (Congleton)

  Stephen, Michael

  Winterton, Nicholas (Macc'f'ld)

  Stern, Michael

  Wolfson, Mark

  Stewart, Allan

  Wood, Timothy

  Streeter, Gary

  Yeo, Tim

  Sumberg, David

  Young, Rt Hon Sir George

  Sweeney, Walter

  Sykes, John

  Tellers for the Noes:

  Tapsell, Sir Peter

  Mr. Simon Burns and Mr. Michael Bates.

  Taylor, Ian (Esher)

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
  MADAM SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House welcomes the Government's policy with regard to the privatisation of HMSO and the proposed safeguards to protect standards of service to Parliament and other customers.

  Education (School Premises)
  10.16 pm
  Mr. David Blunkett: I beg to move,
  That an humble Address be presented to Her Majesty, praying that the Education (School Premises) Regulations 1996 (S.I., 1996, No. 360), dated 22nd February 1996, a copy of which was laid before this House on 22nd February, be annulled.
  In moving the annulment of the order, I feel a little like the groom who had a second chance after the bride turned up early at the church and he missed the service. We are having a second bite of the cherry tonight. [Interruption.] I think that Conservative Members are making assertions about the bride, so perhaps I should protect her from Norman Blackwell and the policy unit at No. 10. [Interruption.]
  Madam Speaker: Order.
  Mr. Blunkett: Thank you, Madam Speaker, it was a little like an east end pantomime for a moment.
  However, there is nothing pantomime about the orders. There is nothing clever about a Government who, having agonised for almost six years, have now decided to deregulate the space available in our classrooms and the area available for leisure and recreation. There is nothing clever about a Government who think that the operation of the free market involves removing the basic safeguards that have existed since they introduced them in 1981 in order to protect our children and our schools.
  Dame Elaine Kellett-Bowman: Will the hon. Gentleman give way?
  Mr. Blunkett: Yes, I will—I always enjoy such occasions.
  Dame Elaine Kellett-Bowman: The orders are very important to village schools, as some—although they are excellent schools—would not be able to meet the new standards. Many village schools would have to close and no one wants to see that happen.
  Mr. Blunkett: I have heard many interventions from the hon. Lady in my time in this place, but that is one of the most stupid. Tonight we are debating the deregulating of regulations that the Government introduced in 1981 in order to protect schools. I can do no better than quote the following:
  "It is clear that, despite efforts to deal with more serious problems, a significant number of schools have problems with their buildings. At least one primary school in seven and one secondary school in five suffers from some shortfall in accommodation, such as cramped classroom spaces, poor or non-existent facilities for art, design and technology or science, or a limited playground area",
  I did not say that. Nor was it said by small schools in Lancashire. It was said by Chris Woodhead, the chief inspector of schools, in his 1996 annual report. He continued:
  "Teachers who lack proper resources or who work in poor buildings experience problems which at best frustrate and at worst defeat their best efforts to do a decent job."

  125
  Obviously, if the schools do not have the space available, there are two answers. The Government can either provide the resources to ensure that they have the space and the safeguards, or they can deregulate and pretend that the problem does not exist.
  The issue raised by the hon. Member for Lancaster (Dame E. Kellett-Bowman) was raised starkly by the then Secretary of State for Education, the right hon. Member for Oxford, West and Abingdon (Mr. Patten), in a letter to the right hon. Member for Wirral, West (Mr. Hunt) on 26 April 1993, when he stated:
  "The main purpose of the review"—
  that is, the review that has now been concluded—
  "was to decide how to resolve the increasing difficulty of having minimum standards for which costs of compliance were well beyond any realistic prospect for the capital expenditure which is likely to be made available."
  That is the absolute essence of why we are debating the regulations tonight. We are debating them because the Government are not prepared to make the capital available—at least in the maintained sector—to ensure that there is adequate space available for children.
  The same Secretary of State wrote to the right hon. Member for Wokingham (Mr. Redwood) on 10 June 1993 as follows:
  "In the interests of overall Government policy, we are proposing deregulation not only in area accommodation for school land, but also in the more central and sensitive area of teaching space standards. I do not think it would be defensible for us to deregulate the one and not the other."
  Apparently it is defensible tonight.
  The Government are deregulating the one but not the other purely on the premise that the Prime Minister stumbled into making a speech in which he promised to protect playing fields—5,000 of which have already been sold off—and was therefore concerned that the Secretary of State for Education and Employment did not directly contradict him. She does her best inadvertently to contradict him every time he stumbles into other mistakes. On this occasion, it was an attempt to ensure that the policy unit and speeches that were written for the Prime Minister were not directly overturned in the regulations. Although a substantial amount has already been sold off, playing field space is not to be deregulated, but space in the classroom and playing space is.
  Changing facilities are also to be deregulated so that children up to the age of 11 will no longer have segregated changing areas and will have to use classrooms. Presumably boys and girls will change in different classrooms to ensure that there is no embarrassment.
  There are no safeguards in terms of health and safety because health and safety regulations and fire regulations apply to teachers, but not to pupils. The Government are prepared to put others at risk to ensure that they are not embarrassed by a set of regulations which they tolerated for nine years before they initiated the review.
  Dr. Keith Hampson: Why does the hon. Gentleman assume that local authorities—the vast majority of which are controlled by his party—are incapable of judging what is the right amount of space? They are building the schools; they should design something that they consider appropriate. Why does the hon. Gentleman want to return to those post-war days
  126
  when, for example, the Parker Morris standards in council housing were imposed by central Government on councils? The Labour party said that, if we abolished them, everything would collapse. It certainly did not. We gave freedom to local authorities: why will he not do so?
  Mr. Blunkett: I thought that the hon. Gentleman knew something about education and the way in which design specifications and the regulations go hand in hand. The answer is very simple. If local authorities do not have minimum space design regulations on which capital allocations can be made, planning consents are given and the Department is permitted to intervene. One cannot blame the local authority if it ends up squeezing space to build or extend a school under DEE regulations for capital, supplementary or original approval when the local authority does not have access to the capital on the markets.
  Tomorrow, the House will consider the remaining stages of regulations that will allow grant-maintained schools, but not maintained schools, to borrow against certain assets. We will debate again tomorrow the facilities and provisions for redeeming nursery vouchers in the pilot and substantive schemes, which will not be subject to any regulations concerning the space that must be made available for the small children in question. The hon. Member for Leeds, North-West (Dr. Hampson) and his party are prepared to tolerate small children having totally inadequate facilities and accommodation, so that the Government can deregulate and put to one side the sensible provision that is already available.
  On 15 February, the Under-Secretary of State replied to my question about what had happened to the review.
  Mr. Graham Riddick: Which Under-Secretary?
  Mr. Blunkett: What does the hon. Gentleman mean, "Which Parliamentary Under-Secretary?" I refer to the Under-Secretary of State who answered my question on 15 February—who, as the hon. Gentleman ought to know, is seated opposite me and is responsible for answering such questions. We do not want silly interventions from hon. Members. The hon. Gentleman may have had a good dinner, but some of us had to forgo dinner to be able to debate the issue properly.
  On 15 February, the Under-Secretary of State answered my question by suggesting that, in the review, a large number of local authorities were prepared to accept the deregulation being debated tonight. I wrote to those local authorities, and every one of them—whether Hounslow, Lancashire, Oxfordshire or Bedfordshire—answered that they had written to the Department saying that they were against the deregulation proposals. The material placed in the Library as late as this afternoon shows that out of the consultation exercise that the Minister of State had not been prepared to reveal on 19 July 1995, one local authority—Wandsworth—and one school out of all those that responded were in favour of deregulation, while one Church body submitted a query. Of all the parties that responded to the consultation that was set in motion on 14 July 1995, only three said that, one way or another, they were prepared to accept deregulation.
  If that consultation led the Government to believe that they had legitimacy in introducing the regulations, I am a Dutchman. There is no legitimacy in or justification for

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  the proposals. They are a petty measure designed to bring the marketplace further into the education service, to the detriment of the children we serve. It is time to ensure that we protect people rather than use them as political pawns. I hope that the Secretary of State will accept tonight that, in carrying out a policy begun by her predecessor and implementing proposals that meet the demands of the policy unit but not the education service, the right hon. Lady is again bowing and capitulating to right-wing pressures on her, rather than meeting the needs of the service and making the provision required to improve our children's educational standards and to ensure the proper teaching that classroom staff want to deliver to the children in their charge.
  10.28 pm
  The Secretary of State for Education and Employment (Mrs. Gillian Shephard): I ask the House to reject the motion. I thank the hon. Member for Sheffield, Brightside (Mr. Blunkett) for turning up this evening. It is good that his team is accompanying him too. Last time, they felt so strongly about the issue that they did not turn up at all.
  I should like to make three main points about the regulations: first, the need for them; secondly, the consultation process applied to them; and, thirdly, what we propose to do between now and 1 September, when the new regulations are intended to come into effect. I shall also deal with the criticisms conveyed by Opposition Members both to Madam Speaker—about the laying of the regulations—and in the Standing Committee considering the Nursery Education and Grant-Maintained Schools Bill.
  I shall start, if I may, at the beginning. The holder of my office is required by section 10 of the Education Act 1944 to make regulations prescribing the standards to which the premises of maintained schools shall conform. Because the education system evolves and changes— unlike the views of Opposition Members—over the years, it has proved necessary every decade or so to review the regulations. Alongside them, it has been the practice for there to be non-statutory professional advice and guidance from architects and building branch professionals in my Department. That, too, has been regularly revised as educational practice has developed.
  The regulations will supersede and revoke the Education (School Premises) Regulations 1981 with effect from 1 September. There are a number of detailed technical changes, but the essential point is that the regulations continue to cover structural requirements, and health, safety and welfare matters—including washrooms and sanitary facilities, boarding accommodation and playing fields. The new regulations will no longer include prescriptive minimum areas for teaching accommodation and recreation areas.
  Ms Joan Walley: I refer the right hon. Lady to a new nursery school in my constituency that was built to the then current regulations. The teachers had to make the strongest possible protest about the fact that even those regulations were inadequate. There were too many children in the classroom, and the
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  noise and crowding made teaching impossible. Without enough capital financing, how will such schools manage under the new regulations?
  Mrs. Shephard: The hon. Lady makes my point for me—she seems to be arguing for deregulation, which is what we are providing for.
  New non-statutory guidance documents will be provided on both teaching accommodation and school grounds. There will also be non-statutory guidance on boarding accommodation. All three documents are placed in the Library of the House.
  As my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) has said, it is obviously difficult for a single set of regulations to apply detailed area standards sensibly to every kind of school on every kind of site. I am thinking in particular of schools on restricted sites where there is no prospect of expansion, and of schools that are difficult to remodel or adapt. Those schools are often in solidly built Victorian and Edwardian buildings. Many are on inner-city sites, but some are in the green belt or in remote villages. The buildings themselves are often in good condition, but the playground might be too small or the rooms may be inconveniently sized. Many of the schools are Church schools; many are very popular.
  Ms Margaret Hodge: Does the Secretary of State believe that space standards have anything to do with the quality of the education offered to our children?
  Dame Elaine Kellett-Bowman: It is the teaching that matters.
  Mrs. Shephard: As my hon. Friend says—she is always right on these matters—it is the quality of teaching that counts, a point repeatedly made by the chief inspector of schools.
  There were other reasons why a review of the 1981 regulations was needed. In those regulations, space per pupil reduces on a stepped scale relating to the actual number of pupils. That means, for instance, that a primary school with 301 pupils needs about 40 sq m less teaching area, according to the regulations, than one with 300 pupils. And a primary school with 181 pupils needs 10 sq m less than one with 180.
  Mr. Nigel Speaing rose—
  Mrs. Shephard: I shall give way to the hon. Gentleman, but it may be the last intervention I shall take.
  Mr. Spearing: The Secretary of State mentioned the alleged difficulty of calculating minimum appropriate areas for schools of different types. In view of the Government's emphasis on the need for more nursery education, why are they taking away the standards specifically laid down for nursery schools, both indoors and outdoors, which have been a feature of that form of education almost since its inception?
  Mrs. Shephard: That is not the case. I am surprised at the hon. Gentleman, who I know produced a learned work on those matters in 1965, which I have read with some interest. He will know that nursery classes in maintained

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  schools will have to conform to the revised regulations and nursery education in voluntary and privately provided premises will have to conform to the Children Act 1989.
  By contrast, minimum recreation areas are broadly in proportion to the pupil numbers. That is another anomaly. If a school had a temporary increase in pupil numbers and had to put up a mobile classroom in the playground, it might risk breaching the regulation on recreation areas. The school might have to come to the holder of my office for a special exemption, but that would be an example of over-prescription leading to undue bureaucracy. Those examples illustrate the anomalies that can arise from over-regulation.
  There is a transitional waiver for part of the 1981 regulations for buildings already existing in 1981. That expires on 1 September and has given some useful flexibility. But it would be absurd to perpetuate a system that depended on transitional arrangements. It would be quite wrong to put good schools and sensible LEAs and governors in a position in which they could be held to account for a breach of what had become unrealistic requirements.
  Mr. Alan Howarth: Will the Secretary of State give way?
  Mrs. Shephard: I will give way, for the last time.
  Mr. Howarth: Has the Secretary of State considered the representations on recreation space put to her by the Learning Through Landscapes Trust, the foundation of which I supported when I was a Minister? The deregulation measure will allow recreational space around existing school buildings to be built on and, in the case of new schools, the space will not have to be provided in the first instance. Will the Secretary of State acknowledge the importance—for the education and development of children—of available space for play and social interaction, for environmental education through gardens and wildlife habitats and for artistic displays and activities?
  Mrs. Shephard: Learning Through Landscapes has made a valuable contribution to the draft guidance documents that have been placed in the Library. The hon. Gentleman will be able to see that if he examines those documents. The trust has been in to see my hon. Friend the Under-Secretary of State for Education and Employment.
  The Opposition apparently wish to retain the regulations on teaching areas, but they would be in a dilemma. What would they do about schools on restricted sites? Would they close the school? Would they restrict admission? Would they place compulsory purchase orders on adjacent buildings? How much would they spend? Have they made a spending pledge? Would they come to the holder of my office to seek an exemption each time? Do they want to force a choice on LEAs and governors? Do they want a system that relies on waivers for schools built before 1981? In other words, this is a classic case in which regulations are no longer necessary. I am not arguing that they were necessarily wrong in the past, perhaps as recently as 1981, but that was 15 years ago. And there is more to it than that.
  It is not disputed on either side of the House that the revolution—that is not too strong a word—in the management of schools over the past decade has been
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  outstandingly successful. We have given more responsibility to parents and governors than ever before. We know from our experience of local management of schools that we need have no hesitation in leaving important and detailed decisions to them. If the governors can take decisions about admissions and staffing—and they can—surely they can be trusted to take decisions about the size of teaching accommodation, recreation areas and storage space. [Interruption.]
  Madam Deputy Speaker (Dame Janet Fookes): Order. I do not expect seated interventions from hon. Members in any part of the House, least of all from those on the Front Bench.
  Mrs. Shephard: I cannot believe that the Opposition are really saying that LEAs and school governors cannot be relied on to act responsibly. If they are, the argument seems to sit very oddly with their desire to give powers to LEAs at the expense of parents, Churches and governors in other areas of policy.
  My right hon. Friend the Member for Norfolk, South (Mr. MacGregor) announced in 1990 that we would be reviewing the 1981 regulations. The review was part of the day-to-day work of the Department. It was not an external, public review and it was never intended to be so, but we did listen to the comments made. We have not been able to take them all on board.
  My hon. Friend the Under-Secretary of State, the hon. Member for Hornchurch (Mr. Squire), announced the Government's conclusions to the House on 14 July last year. A draft of the proposed new regulations and a covering circular were issued for further consultation last August. Some 1,600 schools and organisations were consulted, including all the local education authorities. Only 119 responses were received in England and Wales. It was a very low response rate—only 7 per cent. of the schools and organisations that were consulted. That level of response does not suggest that we are facing the end of civilised education as we know it.
  On 10 January the Under-Secretary of State, my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan), announced the Government's decisions in the light of the consultation. She said that the Government expected to lay the regulations in February.
  On 30 January, in the Standing Committee that considered the Nursery Education and Grant-Maintained Schools Bill, Opposition Members argued that there was a link between the Bill and the regulations and that it would be essential to see the regulations before the Committee had completed its consideration of the Bill. My hon. Friend the Under-Secretary of State therefore undertook to ensure that the regulations were tabled as soon as reasonably possible. They were the subject of expedited printing and were laid on 22 February in an amended proof copy.
  The form of the draft, which included manuscript additions, has been criticised by Opposition Members and by the Select Committee on Statutory Instruments. I take the opportunity to apologise to the House if, in our eagerness to comply with the wishes of the Standing Committee, we cut a corner that we should not have done. It was done with the best of intentions. It is a pity that it was not accepted by Opposition Members in that spirit. The consultation has been full and open and we have

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  worked hard to lay the regulations quickly. We have extended the time of their coming into effect from March to September.
  What do we intend to do between now and when the regulations come into force on 1 September? As is the usual practice, we propose to issue a circular to explain the regulations in layman's terms. A draft of that circular was issued with the draft regulations in August. We shall issue the final version of the circular in the spring or early summer.
  At the same time, non-statutory guidance will be issued on teaching accommodation, school grounds and boarding accommodation. Drafts of the guidance documents are in the Library. We hope to publish a final version of them in the summer.
  There was quite a lot of comment about the regulations during consideration of the Nursery Education and Grant-Maintained Schools Bill. It was suggested that they would lead to overcrowding in individual schools, as there would no longer be a statutory minimum teaching area per pupil. I should remind Opposition Members that the standard admission numbers for schools will not be changed by the regulations. Decisions on how many pupils to admit will still be for the individual admission authorities to take, whether local education authorities or governing bodies.
  It has been suggested that the new regulations will lead to an increase in class size. That is not so. It is a long time since the Government prescribed limits on class sizes. Opposition Members will be interested to hear that it was a Labour Secretary of State, Mr. Edward Short, as he then was, who abolished the regulations on class sizes in 1969. The 1981 regulations certainly do not limit class sizes. The minimum areas relate to the total size of the accommodation, not to individual classes.
  The final argument advanced by Opposition Members—it is one of the silliest—is that LEAs and governors will not know how much teaching space they should be allocating for a given number of pupils. It is as if local education officers and education committees will suddenly be at the mercy of their finance committees, which will be interested only in cutting costs.
  I think that the House will realise that the arguments of Opposition Members are a sham. They are purely tactical in their relationship to the Bill. It is characteristic of them to yearn for detailed rules, to prescribe, to know best, to regulate, to impose and to fossilise matters.
  I have explained to the House that the school premises regulations retain a large number of provisions relating to health, safety and welfare. Where the standards are necessary and practical, we are keeping them. Where they are outdated and bureaucratic, we are removing them. That is a pragmatic and realistic approach. I commend it to the House. It means rejecting the motion.
  10.44 pm
  Ms Margaret Hodge: It is almost second nature to the Government, when they want to change things, to act in an arrogant and autocratic way. That was their intent in changing the school premises regulations. If it had not been for the persistence of our Front-Bench team, we would not be sitting here tonight, even at this
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  late hour, subjecting the proposals to some sort of public debate and justification. This is not proper scrutiny— I have already learnt, in my brief time in the House, that the Government rarely allow proper scrutiny of their proposals—but at least we have this limited opportunity to question and challenge them on their proposals.
  First, let us ask ourselves why the Government wanted to rush these important changes through the House without subjecting them to debate. Was it that they knew that they could not rationally justify the proposals? Was it that they knew that there was almost universal opposition to the proposals? Was it that the Secretary of State knew in her heart of hearts that the new regulations were yet one further step in the wrong direction; yet one further step which would work against raising standards in our schools?
  The new proposals will lower standards, not improve them. They will prepare the ground for further cuts in capital investment in our schools, not lead to the much-needed physical improvement in our schools for which we are crying out. They will reduce opportunity for children, not enhance it. They will turn the clock back, not prepare us for the challenges of the next century.
  The quality of the school premises in which our children are taught is a vital factor in ensuring a high-quality educational offer—not the only factor, but a vital one. Everyone acknowledges that, and the Secretary of State, as a former teacher and inspector, knows it to be true. That is why we regulate school premises. Regulation here is not some old-fashioned bit of bureaucratic nonsense. It is not about a lot of mandarins and Ministers wanting to add to their sense of self-importance by shifting bits of paper around the system. It is about sensible rules laid down by Parliament to ensure that minimum standards are enjoyed by all our children in all schools.
  No one wants the unnecessary, time-consuming and wasteful bureaucracy which over-regulation can bring, but equally, allowing an obsession with deregulation to destroy those elements of our statutory framework which are an essential basis for good teaching is wicked and wrong. It is putting dogma before common sense, and allowing one value and one policy to undermine other more important values and policies. It is sacrificing the needs of our children on the altar of yet another piece of Tory ideology.
  The Government often quote the words of Her Majesty's chief inspector of schools to justify their policies and actions, yet they hear only what they want to hear. When his words do not suit the Government's preconceived purpose, as my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) has shown, the Government choose to ignore them.
  It was the chief inspector who said that space standards were not good enough. No doubt, in 12 or 15 months' time, when the chickens start coming home to roost on this bit of legislation, when stories start appearing in the press about even more overcrowded classrooms and inadequate facilities to teach the national curriculum, what will the Government do? They will play their usual trick and blame the schools, the teachers, the governors— anyone and everyone but themselves.
  In this area, as in so many others, the Government have changed their mind. It was, ironically, a Government under the stronger control of the far more dogma-driven

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  Baroness Thatcher who introduced the Education (School Premises) Regulations 1981. She realised that school premises were an appropriate and important area for Government regulation. What has happened to make this Government change their mind?
  The answer lies in the Government's bungling mismanagement of the public expenditure budget. Instead of spending our money on investing in our children's future—a future that must include the state of the buildings in which they are taught—they waste our money keeping families on the dole. They then panic. They want to go into the next election with tax cuts, and the only way in which they can do that is by doing away with essential expenditure demands, such as the demand for capital investment in our schools.
  The regulations have nothing to do with setting schools free. They have everything to do with setting the Government free from their obligation to ensure appropriate physical standards in our schools.
  Let us look at what the Minister responsible, the right hon. Member for Brent, North (Sir R. Boyson), said when the 1981 regulations were introduced. He started by saying that
  "the regulations … would have been introduced by whatever Government was in power."
  There was a universal acknowledgement of the importance of regulation in this sphere.
  The right hon. Gentleman went on to applaud the fact that the 1981 regulations would introduce a bigger minimum teaching area for the upper junior and middle school age ranges. He stressed:
  "These are minimum standards, since any local authority … can provide more."—[Official Report, Fourth Standing Committee on Statutory Instruments, &c., 28 July 1981; c. 3.]
  Looking back at that debate, we can see how dire the standards in our schools were then. We lay at the bottom of the league of northern European countries in terms of the teaching area available per child. My guess is that the position has probably got worse relative to the rest of Europe over the past 15 years, as an inevitable consequence of the cuts in capital spending. Perhaps the Minister can tell us; but I doubt that she will.
  The 1981 regulations were, and remain, sensible measures to ensure minimum standards so that schools are fit for their purpose—to provide the best and only first chance children have to enjoy a good-quality education. The Government are failing in their proper duty if they ask the House to agree to the regulations tonight, and stop taking responsibility for space standards in all our schools.
  Mr. Spearing: As the Government have a national curriculum, and as they have issued guidelines to schools, is there not a moral obligation on them to work out the cost of the necessary space for that curriculum, in the light of the guidelines, and then to work out a minimum construction cost per place for each variety of school?
  Ms Hodge: I take that point entirely. [Laughter.] Time is limited.
  What freedom is being promoted? What about the rights and freedoms of our children and their parents? They should feel secure and free in the knowledge that
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  they do not have to worry about minimum space standards. The truth is that this nasty piece of legislation is not about handing freedoms to anybody: it is about lowering standards—levelling down, not levelling up. It is about cuts.
  The regulations are bad, short-sighted and wrong. They should not be introduced, and they cannot stand the test of time. They are wrong for our schools, they are wrong for our teachers, and, most importantly, they are wrong for our children. The Secretary of State, if she is listening, knows that. She should never have introduced them. I thought that she had a greater commitment to the education system for which she is responsible. The regulations deserve the same fate that the Government deserve—swift rejection, and a long term in oblivion.
  10.24 pm
  Mr. Richard Tracey: I am grateful to be called in this debate, Madam Deputy Speaker. Indeed, I am glad that the debate has happened at last. I am glad that the hon. Member for Sheffield, Brightside (Mr. Blunkett) has made it to the late shift tonight.
  I felt deeply frustrated 10 days ago when my right hon. Friend the Secretary of State, my hon. Friend the Under-Secretary, the hon. Member for Bath (Mr. Foster) and I were here, but the hon. Member for Brightside was not here to move the Labour party's motion on this important subject. Now, tonight, we are all here, able to notch up more than 48 hours in this working week doing our stuff on behalf of our constituents and the important pupils in our constituencies.
  I welcome the aspect of the regulations that protects school playing fields. About 10 years ago, my local authority area of Kingston upon Thames had a Liberal council—unfortunately, we now have one again—which sold two areas of school playing fields. Such sales are deeply opposed by Conservative Members. I certainly opposed the sale of sports fields during my time as Minister for Sport, as did my hon. Friend the Member for Luton, North (Mr. Carlisle) and the hon. Member for Stalybridge and Hyde (Mr. Pendry). I am therefore glad that these regulations—very much in response to what my right hon. Friend the Prime Minister has said—protect school playing fields.
  At the same time, the regulations provide valuable deregulation. As my right hon. Friend the Secretary of State pointed out, there has been far too much over-regulation and far too little flexibility in schools regulations. The Government have tried to give greater and greater responsibility to local education authorities—too many of which, as my hon. Friend the Member for Leeds, North-West (Dr. Hampson) pointed out, are now controlled by the Labour and Liberal Democrat parties, which is always a recipe for disaster. Nevertheless, they must have more delegated powers, and, more importantly, schools must have local management powers. That is what we are trying to achieve through deregulation.

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  Inevitably, parents, governors and head teachers have worries.
  Mr. Edward O'Hara: What responsibilities have been given to local authorities in recent years that are relevant to the regulations?
  Mr. Tracey: There is local management of schools. Management is a broad area, including finance and the regulation of schools—
  Mr. O'Hara rose—
  Mr. Tracey: No, the hon. Gentleman has had his chance to intervene. Now he must take his chance to catch your eye, Madam Deputy Speaker, when he can make his own speech.
  In the short time that I will allow myself, I want to speak on behalf of parents in my constituency, especially those who belong to the Kingston Campaign for Smaller Classes. They have been in touch with me and with my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) about the regulations.
  The campaign is rightly concerned, although I believe that its concerns have largely been met by what my right hon. Friend the Secretary of State said, and by a letter that I received today from my hon. Friend the Parliamentary Under-Secretary of State for Employment and Education, the Member for Chesham and Amersham (Mrs. Gillan), that there is no upper limit on class sizes. It is worried that
  "Health and safety legislation against overcrowding applies only to employees—not to pupils and not to classrooms."
  It is also concerned about what will happen, if standard numbers are not a limit, if more children are admitted on appeal.
  Those are reasonable questions. My right hon. Friend the Secretary of State has dealt in part with them, and no doubt my hon. Friend the Under-Secretary will do so further. One of the leaders of the Kingston Parents Campaign for Smaller Classes wrote me a letter in which she admits that, as a result of the delay caused by the failure of the hon. Member for Brightside to turn up and move the motion, she has investigated the amendments further. She says:
  "I do see that there may be some lack of flexibility in the way the current regulations are presented, and that it would be helpful if there were a revised definition of teaching and non-teaching areas."
  She goes on to say that the regulations
  "are needed to protect children against the worst that can—and already does—happen. This is very much a health and safety issue. Too many children crammed within restricted classroom areas for all their class-based activities constitute a hazard, as do undersized playgrounds. This is especially the case in primary schools, where children's movements are often very far from controlled or predictable."
  She concludes:
  "Thank you again for taking such an interest in this."
  That is what the Government are doing. There has been a problem with the lack of flexibility, and the Government are moving to deal with it. As hon. Members know, I represent a highly successful education authority area. As my right hon. Friend the Secretary of State knows,
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  Kingston upon Thames is top of the league of education authorities. We are proud of that, but conscious of the need to preserve the high quality of our schools, especially of our primary schools, and of our education authority generally. I therefore welcome what my right hon. Friend has said, but I shall listen with interest to the Under-Secretary's reply.
  11.3 pm
  Mr. Don Foster: The hon. Member for Surbiton (Mr. Tracey) told the House that the Secretary of State has, at least in part, dealt with his constituents' concern about rising class sizes. I do not think that any other hon. Member thought that she dealt with it satisfactorily. She would have some difficulty in doing so, given the massive increase in class sizes over the past few years, with more than 1 million primary school pupils in classes of more than 30, and over 100,000 in classes of more than 36.
  The hon. Member was right about the importance of deregulation and getting rid of unnecessary red tape and bureaucracy, but we are not dealing this evening with unnecessary bureaucracy or red tape. The removal of the regulations governing space from the earlier Education (School Premises) Regulations 1981 is not the same as getting rid of something unnecessary. That view is shared by many educationists.
  As the Secretary of State will know, in September, a letter appeared in The Independent that was signed by nearly all the organisations representing teachers, governors, parents and local education authorities. They were united in their expression of major reservations about the removal of the regulations governing space. They were concerned, just as I am, that their removal and replacement with mere guidelines offers inadequate protection against the very concerns about overcrowding expressed by the hon. Member for Surbiton. That concern is justifiable given the significant increases in class sizes.
  Hon. Members were interested in the intervention of the hon. Member for Lancaster (Dame E. Kellett-Bowman). When the hon. Member for Sheffield, Brightside (Mr. Blunkett) expressed concern about the problems of overcrowding and poor accommodation, the hon. Lady told the House that they were not a problem, and that what mattered were the teachers.
  Dame Elaine Kellett-Bowman: The hon. Member, having had the great privilege of being educated in Lancaster, should know that at least one school in the centre of the city, which is extremely popular, cannot extend in any direction. It would be a disaster were that school to close. If we do not get rid of some of the regulations, the same problem will apply to at least three village schools.
  Mr. Foster: The hon. Lady should say why she, or least her Government, supported the initial regulations in 1981. The hon. Lady might reflect on the what the chief inspector of schools said in this year's report. It is worth repeating:
  "Teachers who lack proper resources or who work in poor buildings experience problems which at best frustrate and at worst defeat their best efforts to do a decent job."
  Teachers need the tools to do the job and the proper premises in which to work in order to give the very best to our children.

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  In common with many other people, I am extremely concerned that the Secretary of State again repeated the information that there has been a five-year long review of the 1981 regulations. A detailed review has been conducted, but the Secretary of State has not offered any hon. Member the opportunity to review any of the information gathered in those five years. The right hon. Lady should consider whether she is prepared to make available to the House details of the internal memoranda that were written in other places about that review.
  Many of the arguments against the removal of the space regulations have been rehearsed, and I do not wish to repeat them. I hope that the Under-Secretary will respond to another issue. The House will be aware that, on 15 December 1981, the United Kingdom ratified the United Nations convention on the rights of the child. Article 3 states:
  "In all actions concerning children … the best interests of the child shall be of primary consideration … State parties shall ensure that the institutions, services and facilities responsible for the care or protection of children shall conform with the standards established by competent authorities".
  Along with the convention, the UN established a committee on the rights of the child to monitor the convention's implementation.
  In January 1995, the United Kingdom Government appeared before the committee and were heavily criticised for failing to give adequate scrutiny to all relevant legislation to see that it complied with the convention. I have recently had discussions with the head of the United Kingdom branch of the children's rights development unit, which was set up to monitor the United Nations convention. She believes that the removal of the space regulations would be a further example of this country's breach of the convention.
  Schools are now required to take extra pupils on appeal, they are not required to comply with the usual health and safety legislation, there is no legal limit on class size and there will be no statutory minimum space legislation. There is now no legislation to prevent overcrowding, and voluntary guidelines are no substitute because they cannot be challenged in law, and they are not enforceable.
  Removing the space regulations is a charter for overcrowded classrooms and playgrounds. Children are having their right to space removed, which is contrary to the commitment this country gave when it signed the United Nations convention to ensure that the best interests of the child be given primary consideration. These regulations amend the Education (School Premises) Regulations 1981, and do so for the worse. Therefore, they should not be approved this evening.
  11.10 pm
  Mr. David Congdon: The hon. Member for Bath (Mr. Foster) was trying to over-egg a weak pudding of an argument. I have heard some strange arguments to justify a particular line of attack, but his beats the lot. Today's debate is somewhat strange. One would think that we were going from a situation of complete tight regulation to having absolutely nothing in its place. As I understand it, we are actually moving from a situation in which the Education (School Premises) Regulations 1981 lay down minimum teaching areas to one in which there are gross area guidelines.
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  Hon. Members do not want children to be taught in seriously overcrowded classrooms, but it is difficult to define precisely the number of square metres that is suitable for children. I have visited many schools and, regardless of whether they are in line with or out of line with the regulations, some seem more crowded than others, depending on the design of the building, when it was built, the layout, the amount of light in the room, and so on.
  I have looked at the proposals to replace the minimum teaching areas by gross area guidelines, and I am afraid that they are not as Opposition Members have portrayed them. The guidelines lay down a range of space that should be available in gross area terms—not minimum teaching area terms—including corridors and other space. A primary school with two forms of entry would have between 3.8 and 4.3 sq m per pupil, and a secondary school with eight forms of entry would have between 6.5 and 7.1 sq m per pupil. That does not strike me as a regime with no interest whatever in the amount of space that is available in the school.
  There is a distinction to be made. The guidelines refer to gross area, not minimum teaching area, thus avoiding the problem of having to define what is a teaching space and what is not a teaching space. When one visits schools, one finds that they use space in all sorts of imaginative ways. [Interruption.] Labour Members may laugh, but as my hon. Friend the Member for Leeds, North-West (Dr. Hampson) has said, there are all sorts of open plans and arrangements which make gross area guidelines much more appropriate.
  Mr. Spearing: I ask the hon. Member for Croydon, North-East (Mr. Congdon) to look at the Committee debate, to which I contributed. Does he agree that 6 sq m is much too small? In any case, he is talking about guidelines that are not statutory, so there is an absence of figures of any sort for teaching space in the regulations.
  Mr. Congdon: I think the last point is correct, but I am not sure that it matters because the gross area guidelines have been drawn up and the graphs have been produced in such a way that, as a rule of thumb, 60 per cent. of the space will be used as teaching space. That meets the hon. Gentleman's point.
  Opposition Members place much emphasis on teaching space and buildings. They concentrate far too much on buildings and not enough on the quality of education. There is no correlation between the quality of buildings and the quality of education. Significantly, in all education debates—of which there have been many down the years—Opposition Members love to concentrate on those issues, because it means that they can avoid the real debates about the quality of education, about testing and about publication of results. They prefer to concentrate on irrelevancies.
  I am happy to support the guidelines rather than a minimum teaching area.
  11.15 pm
  Mr. Peter Kilfoyle: The Government have made one of the tawdriest defences I have heard for the indefensible. The governing party apparently cannot distinguish between small classes and smaller classrooms and between guidelines and regulations.

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  My hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) mentioned the leaked letter from the right hon. Member for Oxford, West and Abingdon (Mr. Patten), who spoke of
  "how to resolve the increasing difficulty of having minimum standards for which the costs of compliance go well beyond any realistic prospect of the capital expenditure which is likely to be made available."
  How prescient he was.
  In the 10 years from 1974 to 1984, education capital spending declined in real terms from £1.82 billion to £604 million. This year, according to "DfEE News", it is running at £621 million. Place that in the context of a capital deficit estimated by the National Audit Office in 1988 at £2 billion, the current request by local education authorities for £1.9 billion for essential maintenance and repairs—but of course they receive only £416 million— and a country whose capital investment in education is only 3.9 per cent. of its total, compared with a European average of 8 per cent., and one has a Government who have scandalously run down their educational capital stock.
  The regulations remove minimum standards for teaching area, for recreation space, and for study areas for post-16 students. Never mind that a recent Observer and Association of Teachers and Lecturers survey reported that 88 per cent. of our classes are overcrowded. The message is clear and unequivocal: cram them in.
  The Government have minimum standards for piglets, calves and hens, but they are removing similar protection from our children at a time when the population is expanding and when 86,000 more children are due to enter education next year. On those matters, it behoves Opposition Members to agree with Her Majesty's chief inspector, who rightly said in his recent annual report:
  "One in seven primary schools has weaknesses in accommodation which frustrate teaching".
  He commented:
  "Where no grassed area is conveniently available and playground services are poorly maintained—and where indoor gymnasiums are ill equipped—pupils' attitudes are damaged and standards are depressed."
  We will take no lectures on standards from Conservative Members.
  Dr. Hampson: That is the third time tonight that the chief inspector has been grossly misrepresented. Surely the hon. Gentleman agrees that, although those criticisms were made, the central argument was that style, standard and quality of teaching were relatable to class size and that that was most important for standards—not the size of classrooms, for heaven's sake.
  Mr. Kilfoyle: As they say, "There is no show without Punch." The hon. Gentleman claimed in Committee that, when Baroness Thatcher was Prime Minister, she gave way only because of the bullying tactics of the National Union of Teachers and the education lobby; that is how divorced from reality the hon. Gentleman is.
  As my hon. Friend the Member for Brightside said, there has been a protracted process of review and consultation. Of 1,500 schools consulted—according to the Secretary of State, the number has increased magically
  140
  to 1,600—just 119 responded. Ministers originally claimed that there were two advocates of change— Wandsworth and East Sussex—but omitted to say that East Sussex wanted the regulations tightened, not abolished.
  Miraculously, we see a copy of the responses from the people who bothered to respond. Again, Wandsworth was the only authority that responded of which one could honestly say that it unequivocally welcomed the Government's proposals.
  No research was done into the potential impact of the proposals on learning, health, safety and discipline. I assume that Ministers had already taken the opinion of Her Majesty's chief inspector, although they clearly rejected it subsequently. The results that emerged from the consultation are truly dreadful. When we recently finished the Committee stage of the Nursery Education and Grant-Maintained Schools Bill, we considered the likely impact of the proposals in detail. If this statutory instrument is approved, it will send a clear message to those in the private and voluntary sectors in nursery education that the Government expect lower standards of accommodation for our children.
  I hope that the Under-Secretary of State will enlighten me in regard to something that I learned only today, when I was in Trafford. There was a consensus there between the political parties about the provision that they wanted to make, particularly in regard to special needs. Special units were incorporated in schools. Will the Under-Secretary tell us whether those special units will come under the aegis of special schools, or that of mainstream schools?
  Mr. O'Hara: Will my hon. Friend give way?
  Mr. Kilfoyle: No, I must make some progress.
  Whereas the current regulations make specific provision for our children, all references to the particular needs of nursery children are removed. That is a disgrace: it shows an abysmal lack of understanding of the spatial needs of toddlers. Why do the new regulations not recognise the particular needs of emotionally and behaviourally disturbed children? Do Ministers not realise that overcrowding exacerbates their problems? There is, for example, nothing to deal with the passage of young children in wheelchairs and their integration; there is nothing to help the visually impaired, who need uncluttered corridors. It is a disgrace that the Government have neglected people with special needs.
  In a letter to the Prime Minister on 6 October 1995, Lord Remnant, chair of Learning Through Landscapes, said that the proposals would
  "put pressure on schools and LEAs to realise hard assets".
  Do the Government not understand that? They will say— and no doubt the hon. Member for Surbiton (Mr. Tracey) will agree—that playing fields are being protected: obviously, that is another whim of the Prime Minister's. But what will they say in response to the charge that, under their protection, 5,000 playing fields have been sold off, with a further 2,600 sales in the pipeline?
  This is all about the physical education curriculum. Do the Government not understand—as the Secretary of State for National Heritage clearly does—the need for playgrounds? The Secretary of State supports lottery

  141
  money for playground games, while Ministers from the Department for Education and Employment want to take their protected status away. There seems to be a contradiction. I would prefer to put my money with the Secretary of State for National Heritage on this issue.
  Has the Minister looked at paragraph 7 of part II of the regulations? Does it mean that children under 11 will not have proper changing accommodation? That is the only interpretation that we can put on it—but, if it is correct, what does that mean for pubescent girls of that age? In particular, what does it mean for girls who have religious considerations to complicate their position?
  Like my hon. Friend the Member for Barking (Ms Hodge), I consulted the report of the Standing Committee sitting of 28 July 1981. The then Under-Secretary of State for Education and Science, the right hon. Member for Brent, North (Sir R. Boyson), boasted:
  "there are bigger minimum teaching areas",
  and went on to announce
  "the minimum … area for a school site area … That is particularly important."…[Official Report, Fourth Standing Committee on Statutory Instruments, 28 July 1981; c. 3–4.]
  I hasten to add that I agree with what the right hon. Gentleman said on that occasion. However, the only change that has taken place since then is the introduction of the national curriculum.
  To any objective observer, the introduction of the national curriculum would imply that we need to take more account of such needs, particularly in technology, physical education and a raft of other areas governed by the national curriculum. The right hon. Member for Brent, North was right: these are important issues. However, the right hon. Gentleman predicted falling pupil numbers. As those numbers continue to rise, it seems to Labour Members that the Government are intent on lowering standards in the school environment.
  As to the quality of teaching, my hon. Friends have pointed out that every authority, parents, governors and teachers—all those who have the interests of children at heart—have said repeatedly that the school environment and the space in which they operate is crucial to raising standards. We can only conclude that this is a cheap move on the part of the Government at our children's expense. It has no support outside Government, as evidenced in the responses to the consultation. There were only 119 respondents—some 7 per cent.—from the 1,600 organisations whose views were sought. Of those, only one organisation—Wandsworth council—unequivocally welcomed the Government's recommendations.
  The Secretary of State referred to the five-year review and to standard admissions. I am reluctant to add that the Secretary of State obviously does not understand how the standard number was arrived at or whether the measure will affect overcrowding. The formula was based on school numbers in 1979–80, which was a boom year. It was then changed on the basis of 1989, and that roll was bigger than that of 1979–80.
  I urge my colleagues to recognise that the measure is churlish, ideological nonsense that should be dumped along with this discredited Government. I urge the House to vote against the regulations.
  11.26 pm
  The Parliamentary Under-Secretary of State for Education and Employment (Mrs. Cheryl Gillan): I have listened to the debate for more than an hour, and I have heard no new arguments of substance from the Opposition. In her opening speech, my right hon. Friend the Secretary of State reminded Labour Members that today's schools are very different from those of 1981. Even the most dogmatic diehards on the Opposition Benches cannot deny that schools have benefited from— even thrived on—our local management policy.
  Schools have shown that they can be treated like grown-ups, so why can Opposition Members not accept a more adult approach to school premises and land? Our proposed changes are all about deregulation—which is still a dirty word in some circles. Deregulation puts responsibility into the hands of those on the ground— local education authorities and school governors. I am amazed that Opposition Members are fighting measures that give greater responsibility to LEAs and to schools. They say that the Labour party supports local democracy—but sometimes I wonder.
  Remember the absurdities that my right hon. Friend the Secretary of State cited earlier. Would they exist if the people who ran the schools were in charge? Remember also that we are keeping—even strengthening—key standards that protect pupils' health and safety. Change of any kind is not popular with everyone; no change, however badly needed, will please everyone. However, it is crystal clear from the responses to the consultation and from the questions and the letters that have landed on my desk since then that the old myths, misinformation and scaremongering that the Opposition love so dearly are still going strong.
  Tonight's debate gives us a welcome opportunity to knock those fairy tales on the head—for the last time, I hope. I have said it a dozen times—my right hon. Friend said it with admirable clarity at the beginning of the debate—but I shall say it once more, as ideas seem to take an eon to filter through to Opposition Members. We can forget the scare stories. The new regulations will not affect admission numbers or class sizes. Regulations never did cover class sizes. I remind the House that a Labour Secretary of State abolished the regulations on class sizes in 1969. Governors and LEAs will control admissions just as they do now.
  Opposition Members want us to believe that LEAs see the new regulations as nothing but trouble, but even Sunderland said:
  "It is surely time for the Department for Education … to produce clear and authoritative guidance".
  That is exactly what we have planned. Opposition Members are still in love with the nanny state. They want to surround schools and LEAs with endless regulations. We trust LEAs and school governors to manage their school premises and to make sensible decisions on admitting pupils. Managing schools is a job for the people on the ground, not central Government. I ask the House to reject the motion.
  Question put:—
  The House divided: Ayes 238, Noes 280.

  Division No. 80]

  [11.30 pm

  AYES

  Abbott, Ms Diane

  Faulds, Andrew

  Ainger, Nick

  Field, Frank (Birkenhead)

  Ainsworth, Robert (Cov'try NE)

  Fisher, Mark

  Allen, Graham

  Flynn, Paul

  Anderson, Donald (Swansea E)

  Foster, Rt Hon Derek

  Anderson, Ms Janet (Ros'dale)

  Foster, Don (Bath)

  Armstrong, Hilary

  Foulkes, George

  Ashton, Joe

  Fyfe, Maria

  Austin-Walker, John

  Galbraith, Sam

  Banks, Tony (Newham NW)

  Galloway, George

  Barron, Kevin

  Gapes, Mike

  Battle, John

  George, Bruce

  Beckett, Rt Hon Margaret

  Gerrard, Neil

  Beith, Rt Hon A J

  Gilbert, Rt Hon Dr John

  Bennett, Andrew F

  Godman, Dr Norman A

  Benton, Joe

  Godsiff, Roger

  Bermingham, Gerald

  Golding, Mrs Llin

  Berry, Roger

  Gordon, Mildred

  Betts, Clive

  Graham, Thomas

  Blunkett, David

  Grant, Bernie (Tottenham)

  Boateng, Paul

  Griffiths, Nigel (Edinburgh S)

  Bradley, Keith

  Griffiths, Win (Bridgend)

  Bray, Dr Jeremy

  Gunnell, John

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

  Hain, Peter

  Bruce, Malcolm (Gordon)

  Hall, Mike

  Burden, Richard

  Hanson, David

  Byers, Stephen

  Harman, Ms Harriet

  Caborn, Richard

  Harvey, Nick

  Campbell, Mrs Anne (C'bridge)

  Heppell, John

  Campbell, Menzies (Fife NE)

  Hill, Keith (Streatham)

  Campbell, Ronnie (Blyth V)

  Hinchliffe, David

  Canavan, Dennis

  Hodge, Margaret

  Cann, Jamie

  Hoey, Kate

  Carlile, Alexander (Montgomery)

  Hogg, Norman (Cumbernauld)

  Chidgey, David

  Home Robertson, John

  Chisholm, Malcolm

  Hoon, Geoffrey

  Church, Judith

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

  Clapham, Michael

  Howarth, George (Knowsley North)

  Clark, Dr David (South Shields)

  Howells, Dr Kim (Pontypridd)

  Clarke, Eric (Midlothian)

  Hoyle, Doug

  Clarke, Tom (Monklands W)

  Hughes, Robert (Aberdeen N)

  Clwyd, Mrs Ann

  Hughes, Roy (Newport E)

  Coffey, Ann

  Hughes, Simon (Southwark)

  Cohen, Harry

  Jackson, Glenda (H'stead)

  Connarty, Michael

  Jackson, Helen (Shef'ld, H)

  Cook, Frank (Stockton N)

  Jamieson, David

  Cook, Robin (Livingston)

  Jones, Barry (Alyn and D'side)

  Corbett, Robin

  Jones, Ieuan Wyn (Ynys Môn)

  Corbyn, Jeremy

  Jones, Lynne (B'ham S 0)

  Cousins, Jim

  Jones, Nigel (Cheltenham)

  Cummings, John

  Jowell, Tessa

  Cunliffe, Lawrence

  Kaufman, Rt Hon Gerald

  Cunningham, Jim (Covy SE)

  Keen, Alan

  Cunningham, Rt Hon Dr John

  Khabra, Piara S

  Dafis, Cynog

  Kilfoyle, Peter

  Dalyell, Tam

  Kirkwood, Archy

  Darling, Alistair

  Lestor, Joan (Eccles)

  Davidson, Ian

  Liddell, Mrs Helen

  Davies, Bryan (Oldham C'tral)

  Litherland, Robert

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

  Livingstone, Ken

  Davies, Ron (Caerphilly)

  Lloyd, Tony (Stretford)

  Denham, John

  Llwyd, Elfyn

  Dewar, Donald

  Loyden, Eddie

  Dixon, Don

  Lynne, Ms Liz

  Dobson, Frank

  McAllion, John

  Donohoe, Brian H

  McCartney, Ian

  Dowd, Jim

  Macdonald, Calum

  Dunwoody, Mrs Gwyneth

  McFall, John

  Eagle, Ms Angela

  McKelvey, William

  Eastham, Ken

  Mackinlay, Andrew

  Etherington, Bill

  McLeish, Henry

  Evans, John (St Helens N)

  McMaster, Gordon

  Fatchett, Derek

  McNamara, Kevin

  144

  MacShane, Denis

  Roche, Mrs Barbara

  McWilliam, John

  Rogers, Allan

  Madden, Max

  Ross, Ernie (Dundee W)

  Maddock, Diana

  Rowlands, Ted

  Mahon, Alice

  Ruddock, Joan

  Mandelson, Peter

  Sedgemore, Brian

  Marek, Dr John

  Sheerman, Barry

  Marshall, David (Shettleston)

  Sheldon, Rt Hon Robert

  Martin, Michael J (Springburn)

  Shore, Rt Hon Peter

  Martlew, Eric

  Short, Clare

  Maxton, John

  Simpson, Alan

  Meacher, Michael

  Skinner, Dennis

  Meale, Alan

  Smith, Andrew (Oxford E)

  Michael, Alun

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

  Michie, Bill (Sheffield Heeley)

  Smith, Llew (Blaenau Gwent)

  Michie, Mrs Ray (Argyll & Bute)

  Snape, Peter

  Milburn, Alan

  Soley, Clive

  Miller, Andrew

  Spearing, Nigel

  Mitchell, Austin (Gt Grimsby)

  Spellar, John

  Moonie, Dr Lewis

  Squire, Rachel (Dunfermline W)

  Morgan, Rhodri

  Steinberg, Gerry

  Morley, Elliot

  Strang, Dr. Gavin

  Morris, Estelle (B'ham Yardley)

  Straw, Jack

  Mudie, George

  Sutcliffe, Gerry

  Mullin, Chris

  Taylor, Matthew (Truro)

  Nicholson, Emma (Devon West)

  Timms, Stephen

  Oakes, Rt Hon Gordon

  Tipping, Paddy

  O'Brien, Mike (N W'kshire)

  Touhig, Don

  O'Brien, William (Normanton)

  Trickett, Jon

  O'Hara, Edward

  Turner, Dennis

  Olner, Bill

  Tyler, Paul

  O'Neill, Martin

  Vaz, Keith

  Orme, Rt Hon Stanley

  Walley, Joan

  Parry, Robert

  Wardell, Gareth (Gower)

  Pearson, Ian

  Wareing, Robert N

  Pendry, Tom

  Watson, Mike

  Pickthall, Colin

  Wicks, Malcolm

  Pike, Peter L

  Williams, Rt Hon Alan (Sw'n W)

  Pope, Greg

  Williams, Alan W (Carmarthen)

  Powell, Ray (Ogmore)

  Wilson, Brian

  Prentice, Bridget (Lew'm E)

  Wise, Audrey

  Prentice, Gordon (Pendle)

  Worthington, Tony

  Primarolo, Dawn

  Wray, Jimmy

  Randall, Stuart

  Wright, Dr Tony

  Raynsford, Nick

  Reid, Dr John

  Tellers for the Ayes:

  Rendel, David

  Mrs. Jane Kennedy and Mr. Jon Owen Jones.

  Robinson, Geoffrey (Co'try NW)

  NOES

  Ainsworth, Peter (East Surrey)

  Bowis, John

  Alison, Rt Hon Michael (Selby)

  Boyson, Rt Hon Sir Rhodes

  Allason, Rupert (Torbay)

  Brandreth, Gyles

  Amess, David

  Brazier, Julian

  Ancram, Rt Hon Michael

  Bright, Sir Graham

  Arbuthnot, James

  Brooke, Rt Hon Peter

  Arnold, Jacques (Gravesham)

  Brown, M (Brigg & Cl'thorpes)

  Arnold, Sir Thomas (Hazel Grv)

  Browning, Mrs Angela

  Ashby, David

  Bruce, Ian (South Dorset)

  Atkins, Rt Hon Robert

  Budgen, Nicholas

  Atkinson, Peter (Hexham)

  Burns, Simon

  Baker, Rt Hon Kenneth (Mole V)

  Burt, Alistair

  Baker, Nicholas (North Dorset)

  Butcher, John

  Banks, Matthew (Southport)

  Butler, Peter

  Banks, Robert (Harrogate)

  Butterfill, John

  Bates, Michael

  Carlisle, Sir Kenneth (Lincoln)

  Batiste, Spencer

  Carrington, Matthew

  Bellingham, Henry

  Cash, William

  Bendall, Vivian

  Channon, Rt Hon Paul

  Beresford, Sir Paul

  Chapman, Sir Sydney

  Biffen, Rt Hon John

  Churchill, Mr

  Bonsor, Sir Nicholas

  Clappison, James

  Booth, Hartley

  Clark, Dr Michael (Rochford)

  Boswell, Tim

  Clifton-Brown, Geoffrey

  Bottomley, Peter (Eltham)

  Coe, Sebastian

  Bottomley, Rt Hon Virginia

  Colvin, Michael

  145

  Congdon, David

  Heald, Oliver

  Conway, Derek

  Heathcoat-Amory, Rt Hon David

  Coombs, Anthony (Wyre For'st)

  Hendry, Charles

  Coombs, Simon (Swindon)

  Heseltine, Rt Hon Michael

  Cope, Rt Hon Sir John

  Hill, James (Southampton Test)

  Couchman, James

  Hogg, Rt Hon Douglas (G'tham)

  Cran, James

  Horam, John

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

  Hordern, Rt Hon Sir Peter

  Curry, David (Skipton & Ripon)

  Howell, Rt Hon David (G'dford)

  Davis, David (Boothferry)

  Howell, Sir Ralph (N Norfolk)

  Day, Stephen

  Hughes, Robert G (Harrow W)

  Deva, Nirj Joseph

  Hunt, Rt Hon David (Wirral W)

  Dicks, Terry

  Hunt, Sir John (Ravensbourne)

  Dorrell, Rt Hon Stephen

  Hunter, Andrew

  Douglas-Hamilton, Lord James

  Hurd, Rt Hon Douglas

  Dover, Den

  Jack, Michael

  Duncan-Smith, Iain

  Jackson, Robert (Wantage)

  Dunn, Bob

  Jenkin, Bernard

  Durant, Sir Anthony

  Jessel, Toby

  Eggar, Rt Hon Tim

  Johnson Smith, Sir Geoffrey

  Elletson, Harold

  Jones, Gwilym (Cardiff N)

  Emery, Rt Hon Sir Peter

  Jones, Robert B (W Hertfdshr)

  Evans, David (Welwyn Hatfield)

  Jopling, Rt Hon Michael

  Evans, Jonathan (Brecon)

  Kellett-Bowman, Dame Elaine

  Evans, Nigel (Ribble Valley)

  Key, Robert

  Evans, Roger (Monmouth)

  King, Rt Hon Tom

  Evennett, David

  Kirkhope, Timothy

  Faber, David

  Knapman, Roger

  Fabricant, Michael

  Knight, Mrs Angela (Erewash)

  Fenner, Dame Peggy

  Knight, Rt Hon Greg (Derby N)

  Field, Barry (Isle of Wight)

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

  Fishburn, Dudley

  Lait, Mrs Jacqui

  Forman, Nigel

  Lamont, Rt Hon Norman

  Forth, Eric

  Lang, Rt Hon Ian

  Fowler, Rt Hon Sir Norman

  Lawrence, Sir Ivan

  Fox, Dr Liam (Woodspring)

  Legg, Barry

  Fox, Rt Hon Sir Marcus (Shipley)

  Leigh, Edward

  Freeman, Rt Hon Roger

  Lennox-Boyd, Sir Mark

  French, Douglas

  Lester, Sir James (Broxtowe)

  Fry, Sir Peter

  Lidington, David

  Gale, Roger

  Lilley, Rt Hon Peter

  Gallie, Phil

  Lloyd, Rt Hon Sir Peter (Fareham)

  Garel-Jones, Rt Hon Tristan

  Lord, Michael

  Garnier, Edward

  Luff, Peter

  Gillan, Cheryl

  Lyell, Rt Hon Sir Nicholas

  Goodlad, Rt Hon Alastair

  MacGregor, Rt Hon John

  Goodson-Wickes, Dr Charles

  MacKay, Andrew

  Gorman, Mrs Teresa

  Maclean, Rt Hon David

  Gorst, Sir John

  McLoughlin, Patrick

  Grant, Sir A (SW Cambs)

  McNair-Wilson, Sir Patrick

  Greenway, Harry (Ealing N)

  Malone, Gerald

  Greenway, John (Ryedale)

  Mans, Keith

  Griffiths, Peter (Portsmouth, N)

  Marland, Paul

  Grylls, Sir Michael

  Martin, David (Portsmouth S)

  Hague, Rt Hon William

  Mates, Michael

  Hamilton, Rt Hon Sir Archibald

  Mawhinney, Rt Hon Dr Brian

  Hamilton, Neil (Tatton)

  Mayhew, Rt Hon Sir Patrick

  Hampson, Dr Keith

  Mellor, Rt Hon David

  Hanley, Rt Hon Jeremy

  Merchant, Piers

  Hannam, Sir John

  Mills, Iain

  Hargreaves, Andrew

  Mitchell, Andrew (Gedling)

  Haselhurst, Sir Alan

  Mitchell, Sir David (NW Hants)

  Hawkins, Nick

  Moate, Sir Roger

  Hawksley, Warren

  Monro, Rt Hon Sir Hector

  Hayes, Jerry

  Montgomery, Sir Fergus

  146

  Needham, Rt Hon Richard

  Sproat, Iain

  Nelson, Anthony

  Squire, Robin (Hornchurch)

  Neubert, Sir Michael

  Stanley, Rt Hon Sir John

  Newton, Rt Hon Tony

  Steen, Anthony

  Nicholls, Patrick

  Stephen, Michael

  Norris, Steve

  Stewart, Allan

  Onslow, Rt Hon Sir Cranley

  Sumberg, David

  Oppenheim, Phillip

  Sweeney, Walter

  Page, Richard

  Sykes, John

  Paice, James

  Tapsell, Sir Peter

  Patnick, Sir Irvine

  Taylor, Ian (Esher)

  Patten, Rt Hon John

  Taylor, John M (Solihull)

  Pattie, Rt Hon Sir Geoffrey

  Taylor, Sir Teddy (Southend, E)

  Pawsey, James

  Temple-Morris, Peter

  Peacock, Mrs Elizabeth

  Thomason, Roy

  Pickles, Eric

  Thompson, Sir Donald (C'er V)

  Porter, Barry (Wirral S)

  Thompson, Patrick (Norwich N)

  Porter, David (Waveney)

  Thornton, Sir Malcolm

  Portillo, Rt Hon Michael

  Thurnham, Peter

  Powell, William (Corby)

  Townend, John (Bridlington)

  Rathbone, Tim

  Townsend, Cyril D (Bexl'yh'th)

  Redwood, Rt Hon John

  Tracey, Richard

  Renton, Rt Hon Tim

  Tredinnick, David

  Richards, Rod

  Trend, Michael

  Twinn, Dr Ian

  Riddick, Graham

  Vaughan, Sir Gerard

  Rifkind, Rt Hon Malcolm

  Waldegrave, Rt Hon William

  Robathan, Andrew

  Walden, George

  Roberts, Rt Hon Sir Wyn

  Walker, Bill (N Tayside)

  Robertson, Raymond (Ab'd'n S)

  Waller, Gary

  Robinson, Mark (Somerton)

  Ward, John

  Roe, Mrs Marion (Broxbourne)

  Wardle, Charles (Bexhill)

  Rowe, Andrew (Mid Kent)

  Waterson, Nigel

  Rumbold, Rt Hon Dame Angela

  Watts, John

  Sackville, Tom

  Wells, Bowen

  Sainsbury, Rt Hon Sir Timothy

  Whitney, Ray

  Scott, Rt Hon Sir Nicholas

  Whittingdale, John

  Shaw, David (Dover)

  Widdecombe, Ann

  Shaw, Sir Giles (Pudsey)

  Wiggin, Sir Jerry

  Shephard, Rt Hon Gillian

  Wilkinson, John

  Shepherd, Sir Colin (Hereford)

  Willetts, David

  Shepherd, Richard (Aldridge)

  Wilshire, David

  Shersby, Sir Michael

  Winterton, Mrs Ann (Congleton)

  Sims, Roger

  Winterton, Nicholas (Macc'f'ld)

  Skeet, Sir Trevor

  Wolfson, Mark

  Soames, Nicholas

  Wood, Timothy

  Speed, Sir Keith

  Yeo, Tim

  Spencer, Sir Derek

  Young, Rt Hon Sir George

  Spicer, Sir James (W Dorset)

  Spicer, Sir Michael (S Worcs)

  Tellers for the Noes:

  Spink, Dr Robert

  Mr. Richard Ottaway and Mr. Gary Streeter.

  Spring, Richard

  Question accordingly negatived.

  EDUCATION AND EMPLOYMENT
  Ordered,
  That Mr. Don Foster, Mr. Harry Greenway, Mr. Warren Hawksley, Margaret Hodge, Sir Ralph Howell, Mr. David Jamieson, Mr. Iain Mills, Mr. David Nicholson, Mr. Edward O'Hara, Mr. David Porter, Mr. Ernie Ross, Mr. Gerry Steinberg and Sir Malcolm Thornton be members of the Education and Employment Committee.—[Sir Fergus Montgomery, on behalf of the Committee of Selection.]

  Council Housing
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. McLoughlin.]
  11.42 pm
  Mr. Chris Davies: This is the third Adjournment debate that I have been lucky enough to secure during my five months in the House. I am delighted to have the chance to face the Minister so soon after the last one. I hope that he will recall that this is my third time and that he will ensure that I am third time lucky by granting my requests on behalf of my constituents and others throughout the country.
  I am becoming something of an old hand at these debates. I have learnt that Ministers tend to speak from a prepared brief in reply, usually without hesitation or deviation but sometimes with a little repetition.
  I am concerned about the fact that the best housing stock owned by our local authorities is deteriorating rapidly. The problems are, in essence, to do with money. The funding is being reduced year after year. It is therefore time that the Government held out some prospect of change.
  This debate is about older housing. I offer the Minister, as examples, the Alt and Roundthorn estates in the Lees ward of Oldham, where there are about 800 houses and a few flats and bungalows. On the Holt, Bentgate and Hough estates in the Milnrow and Newhey ward of neighbouring Rochdale, there are some 500 properties. Almost all are houses, but a few are bungalows. All were built in the 10-year periods either side of the war. Roundthorn was started in 1936 and Alt was finished by the mid-1950s.
  The houses are typical examples of some of the best council housing built in Britain in the middle years of this century. They are mostly semi-detached, they have gardens to the front and rear, they were well constructed and they are good, solid, middle-of-the-road housing. Generally, because of their age, they are now paid for, and there are very few debts outstanding to be paid by the local authority.
  Hundreds and thousands of such council houses were built throughout Britain. They proved popular with people when the right-to-buy legislation was first introduced and they are typical of the houses that were snatched up on council estates. As it happens, not many of the properties on the estates that I have mentioned have been sold—only 10 per cent. have—but they are pepper-potted around the estates and are a clear demonstration of the commitment of local tenants, now owner-occupiers, towards the areas in which they live.
  For all the good qualities of the bricks and mortar and the design of the homes, people on the estates now all too often feel somewhat forgotten. They see work being carried out in other parts of the boroughs, but nothing substantial done to their own homes. The local authorities' position is understandable. With limited finance, it is almost inevitable that the money that is available goes to properties in greatest need.
  Unfortunately, the qualities of such mid-century council housing do not always carry on, decade after decade, without decline. Buildings constructed from the
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  1950s onwards, such as mid-rise walk-ups and system-built concrete structures, have generated real problems that local authorities have to face and treat as priorities. That housing has caused difficulties that are expensive to resolve, and the result is that estates that are sliding gently into decline, such as those I have mentioned, are overlooked time and again. They never get priority attention and they can, at best, look forward to getting some of the crumbs from the table.
  The simple truth is that 50-year-old housing, which was good for its time, is not so good now. The refurbishment work that is needed is important to the very fabric of the buildings—it involves pointing and cleaning brickwork as it becomes unsightly. From across the street, one can see that the roofs are starting to sag. Besides essential maintenance on a scale greater than the day-to-day repairs budget will ever provide, the properties really need full refurbishment to equip them for another 50 years of life.
  The stock simply no longer meets modern expectations. Ideally, it should be refurbished from top to bottom and the kitchens and bathrooms modernised. The entire interior layout should be remodelled after—in these days, when tenants' wishes are taken into account—a proper period of consultation. That does not happen because the money is not available. On the Alt estate, the best that local residents can expect is a window replacement programme, but the programme is on such a small scale that it is likely to take years to complete.
  Other details of the estates are likely to require attention. For example, the roads were not designed with the expectation that cars would be parked all over them. It was never in the architect's mind that minibus services would operate around the estate. That has happened, of course, as a result of deregulation, greater competition and some innovation in the bus industry.
  In the absence of proper refurbishment, there is gradual decline. I have no doubt that, for many years, the properties will be comparatively popular and easy to let. That is bound to change, however, as time passes. As the fabric decays, demand will gradually lessen. The deterioration will affect both council tenants and home owners.
  The Institute of Housing estimates that Britain needs additional investment of about £20 billion to catch up with the backlog of council housing refurbishment. That is in addition to the money that is already being spent by councils throughout the country in accordance with the housing investment programme allocations that are awarded to them annually.
  I hope that the Minister will accept what to most is an obvious truth—that the size of the repair bill will inevitably increase the longer we wait for the problems that I have outlined to be recognised and dealt with. If the problem is not addressed, property is bound to decay further.
  The resources that are available for the task are hopelessly inadequate. Even taking account of the money that is being devoted to the tail-end of estate action schemes—they are no longer being authorised afresh— and moneys in single regeneration budgets, the cake is becoming smaller. Investment in council housing in 1979–80 was £7 billion. I understand that last year it was about £3 billion.
  Rochdale housing department tells me that essential planned maintenance is now being financed from the revenue account. It points, however, to the urgent need

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  for rewiring, the replacement of heating systems, re-roofing and window replacement merely to maintain the basic fabric, let alone any attempt to modernise to meet the wishes of tenants who look to property that is appropriate for the 1990s.
  Rochdale housing department argues, as do local authorities throughout the country, that more resources are urgently needed. Oldham housing authority tells me that it could easily spend 10 times its current allocation, and that it would still take years to make a mark on the need, such is the scale of the backlog.
  The Institute of Housing has proposed some changes to the Treasury rules, which restrict the way in which allocations are made to council housing. Its thoughts are not entirely dissimilar to those of my party. The Liberal Democrats would argue strongly for increased capital investment in housing. Local authorities should be allowed to spend their capital receipts. There is a need to change the Treasury rules to allow local authorities to deal with the backlog that I have described.
  The Institute of Housing suggests that there should be a shift of emphasis from the Treasury's reliance, as its marker, on the public sector borrowing requirement towards the general Government financial deficit, which is not a term that I had come across before preparing for the debate. I understand that such a move would bring the United Kingdom into line with general European practice.
  The institute proposes the establishment of local housing corporations and the transfer of estates to organisations controlled and established by local authorities, with elected councillors serving on them. By a change in the paper work and a reinterpretation of the rules, local authorities would be allowed to invest more in the housing stock.
  I have now been associated with local authorities for some 16 years. I have been a councillor on two authorities and the chairman of the housing committee of one. When I looked round some of the rapidly deteriorating estates in Liverpool in the early 1980s and saw the poor quality of some of the housing built in the immediate post-war years when the problems caused by the blitz and the need for slum clearance were so acute, I would never have believed that, in the closing years of the 20th century, we would still not be able to deal with the problems. In fact, the problem has got worse. I see no end to it.
  I should like the Minister to offer to my constituents in Oldham some hope, and some suggestion that the time is coming when, in practice, the capital resources necessary to deal with the rapidly growing problems will at last be made available to local authorities.
  11.55 pm
  The Parliamentary Under-Secretary of State for the Environment (Mr. James Clappison): I do not know whether the hon. Member for Littleborough and Saddleworth (Mr. Davies) will consider that he has been lucky for the third time, but I welcome this opportunity to set out to him and to the House details of our policies for housing. I hope that he and his constituents will find in what I have to say answers to a number, if not all, of the questions that he posed.
  I commend to the hon. Gentleman as a starting point the White Paper on housing which we published last year, "Our Future Homes", which set out the Government's
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  housing policies for the next decade. The White Paper highlighted the key role of local authorities in setting strategies for their areas—shaping the provision of new social housing, making effective use of existing houses in all sectors and getting new investment in council housing.
  Every year, each local housing authority prepares its housing strategy and publishes a statement setting out its main objectives, policies and programmes for the next three years. When preparing its strategy, the authority has to consider its priorities in the context of the resources that it has available and it is up to the local authority to identify where these resources should go.
  The strategies play a major part in central Government decisions on how capital resources are allocated to authorities under the housing investment programme. This programme is the main source of Government funding for local authority housing, and in 1996–97 local authorities will receive more than £1.2 billion under the programme. Within that, £943 million is for general purpose allocations, the housing annual capital guidelines, which are distributed to individual local authorities—40 per cent. on a formulaic basis and 60 per cent. competitively.
  The formula used to guide the ACG allocations is something called the generalised needs indicator, which is a relative measure of the need for investment in each local authority area. To ensure that the distribution of capital housing resources was based on robust and stable indicators of the need to invest in each area, the Department recently carried out a comprehensive review of the generalised needs indicator. The purpose of the review was to establish indices which were based on the relative need to invest, which derived from the most reliable data sources available, which took into account both supply and demand and which were as straightforward and comprehensible as possible. The review was completed last year, and the 1996–97 allocations are based on the revised indicator.
  The main criterion for the competitive portion of the allocation is the relative efficiency and effectiveness of an authority in meeting local housing needs. One of the key factors used to assess that is the quality of the local authority's housing strategy. The others are programme delivery, performance in the enabling role, management practices in the landlord role, and tenant and resident consultation and participation—something by which we set great store.
  The Government believe that this allocation on the basis of need and performance has stimulated improved strategic planning and service delivery. Our Government offices for the regions, which assess all the authorities in their region each year, consider that the competitive system has led to an improvement in local authorities' performance. In 1994, Capita Consultants was employed to conduct a review of the HIP process. In its report, it wrote:
  "According to both the Government Offices and the local authorities the present competitive HIP process appears to be succeeding in its primary objective of improving local authority performance in relation to housing strategies and the delivery of housing programmes".
  The Government therefore propose to increase the competitive element of the housing investment programme, and we are consulting the local authority associations on that matter.
  The housing investment programme is, of course, not the only source of Government funding for investment in council housing. Over the past 10 years—the

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  hon. Gentleman adverted to this in passing—the Government have provided considerable additional resources to council estates through estate action and, within the single regeneration budget, £256 million of resources will provide support for the estate action programme in 1996–97.
  I understand that the local authorities in the hon. Gentleman's constituency have benefited from estate action schemes. I see that the hon. Gentleman appreciates and fully accepts that point. Oldham has received about £18 million from the estate action programme towards improving nearly 6,000 properties on eight estates, while in Rochdale more than 6,000 properties have been improved on 16 estates at a cost of more than £36 million to estate action.
  The improvement of housing and housing conditions for local people through physical improvement, better maintenance, improved management and greater choice and diversity is a key objective for the single regeneration budget and schemes with a significant housing element are among those receiving funding from the SRB challenge fund.
  Mr. Chris Davies: I give credit to the estate action money. Within the ward I represent as a councillor in my constituency—the Holt village ward—almost 1,000 properties have benefited hugely from the project. Down the road, the estates to which I referred—Alt and Roundthorn—have identical housing, but as a result of being unlikely to meet the single regeneration bid rules, they could well languish in an unmodernised state while, across the road, their neighbours have benefited. Does the Minister hold out any prospect of the overall size of the cake being increased?
  Mr. Clappison: I am pleased that the hon. Gentleman accepts that the estate action programme has benefited the parts of his constituency to which he referred. He has referred to other parts of his constituency—the Alt and Roundthorn estates. I will draw attention to ways in which such estates can benefit, especially from new sources of capital funding. I draw the attention of the hon. Gentleman and his constituents to those sources of funding.
  The challenge fund for the single regeneration budget promotes an integrated approach to local regeneration, and it is not possible to identify separately the exact resources directed at housing. However, about 70 of the schemes approved in the first round of the single regeneration budget challenge fund have a significant housing content. Those schemes received about £70 million of SRB resources in 1995–96 and will receive a further £150 million in 1996–97. Schemes with a significant housing content were even more successful in the second round of the challenge fund, and will receive more than £100 million in the first two years.
  Both Oldham and Rochdale have been successful in bidding for the SRB challenge fund—Rochdale in rounds 1 and 2 for Canalside and Middleton Pride respectively, and Oldham in round 2 for Westwood. The local authorities will receive more than £30 million in total from the SRB for those schemes. I hope that they will bid for the third round of the challenge fund, which will be launched at Easter this year, and be equally successful.
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  I turn to other sources of funding and begin with the housing partnership fund under which local authorities can also bid for resources. In 1995–96, £30 million has been awarded to 220 housing schemes and the combination of public and private sector money means that up to £108 million will be invested to meet local housing need, help stimulate local economic growth and create jobs. The projects funded involve a wide range of schemes, from conversion of warehouses to provide social housing, to energy efficiency schemes, and they bring long-lasting benefit to local communities.
  Last December, we invited bids from local authorities for the 1996–97 scheme. This year, we will be placing particular emphasis on schemes that bring empty properties into use from both the private and the public sectors. The response from local authorities has been very encouraging, and we will be making an announcement on the successful bids shortly.
  Challenge funding of local authority spending has developed rapidly over recent years, and has proved its value. It drives up standards of service and ensures that public funds are directed where they can achieve most. We intend to build on the success of current programmes and continue the drive towards challenge funding. We are therefore considering the introduction of a capital challenge fund for distribution of Government support for local authorities' mainstream capital spending. Consultation on that proposal ended on Friday 15 March, and we are now considering the responses.
  Government funding is, of course, not the only source of resources for expenditure on housing. Local authorities can also fund capital expenditure on housing from revenue contributions to capital and from their usable capital receipts. Of course, local authorities must set aside 75 per cent. of housing receipts and 50 per cent. of other receipts for debt repayment. We believe that it is right that local authorities should set aside a portion of their receipts for the repayment of debt. That reduces the burden on council tax payers of servicing local authority debt and has wider benefits for the economy. However, local authorities are free to spend the remainder as they wish. They should therefore regularly consider whether they can generate additional capital receipts.
  In addition, as public funding is limited, local authorities should consider ways of increasing private investment. The single regeneration budget challenge fund and the housing partnership fund have shown that local authorities can form partnerships with the private sector, thus securing private finance in addition to public funds for projects that benefit the community.
  I come to another important option in the context of the hon. Gentleman's remarks. We would urge all authorities to consider the transfer of their housing stocks to a private sector landlord. We have in place a very successful programme of voluntary transfers, bringing considerable benefits to local authorities and to their tenants. Transfer is one of the best ways of bringing in private finance to improve the condition of social housing stock. Authorities gain a sizeable receipt, which is used first to pay off housing debt.
  In addition, authorities will usually also have receipts that they can invest in social housing in their area. Tenants benefit from improvements to their homes, rent guarantees from their recipient landlords and a greater say in the management of their homes. To date, 47 local

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  authorities have transferred almost 213,000 properties to new landlords. Those transfers have attracted almost £3.5 billion of private sector funding and have generated receipts of well over £2 billion for local authorities.
  Transfers to date have not been confined to the south of England; there have been a number in the north of England not too many miles away from the hon. Gentleman's constituency, including areas such as South Ribble. We expect that Manchester city council will shortly be transferring 1,400 properties on its Partington estate to Manchester and District housing association.
  So far, most large-scale voluntary transfers have taken place in shire districts where the stock is small and in relatively good condition, but we are keen to bring the benefits of transfer to urban and inner-city areas with non-traditional housing. We are committed in the Housing Bill, which is currently being considered by the House, to widening the range of recipient landlords to include local housing companies. The proposed legislation will, for the first time, enable a wider range of non-profit-making landlords to provide social housing—either by receiving stock transferred by local authorities or by acquiring or constructing houses with Housing Corporation grants.
  In addition, last year the Secretary of State announced a new challenge fund, the estates renewal challenge fund, designed to facilitate the transfer of poor-quality council housing estates to new social landlords to secure their improvement through increased investment. The type of estates that will benefit are those where low or negative valuations or poor asset cover means that transfer in the usual way, which I have just described, is not a viable proposition.
  More than £300 million will be made available through the scheme over the next three years. Grant may be paid towards a range of costs associated with transfer, including the costs of dowries to new landlords where the
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  stock has a negative value, essential repair, maintenance and capital works and the preparatory and set-up costs for the new landlord. The scheme is, of course, voluntary, and transfers will go ahead only where both the local authority and the tenants are in favour.
  Grants will be awarded on a competitive bidding basis. Local authorities were invited just before Christmas to start drawing up outline bid proposals to be submitted by mid-February. There has been a very encouraging response. More than 30 local authorities have submitted bids for funding, totalling some £100 million during the first year. They are being considered and authorities will be invited to work up the most promising into detailed bids for submission by the end of April.
  We will invite bids for the second year, 1997–98, in September 1996, and I understand that both Oldham and Rochdale will consider the applicability of the fund to them when preparing their housing strategies in 1996.
  In summary, local authorities have a key role to play in ensuring that housing needs are met in their areas. They are responsible for setting housing objectives and implementing strategies to meet them, while making best use of the resources available. However, public expenditure will always be limited and local authorities cannot spend as much as they would like on improving their housing. They should therefore consider some of the options that I have outlined, including transferring their stock to private landlords because that can benefit both the tenants and the local authority.
  I hope that I have answered many of the hon. Gentleman's questions and set out ways in which his constituents in the estates to which he referred can benefit from our housing policies.
  Question put and agreed to.
  Adjourned accordingly at twelve minutes past Twelve midnight.