Commons Sitting of 27 March 1996

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

  Local Government (Dorset)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Burns.]
  9.34 am
  Sir Jim Spicer: Thank you, Madam Speaker, for allowing Dorset Members of Parliament this debate on the future of local government in Dorset. Before I turn to the substance of my speech, I should like to make a heartfelt plea for the future of Dorset's farming community. Just one week ago, that future looked secure and prosperous. It is amazing how much can change in a week. Over the past week, we have seen how inextricably the prosperity of our farming community is linked with the future of our county.
  I therefore make a plea to every Member of this House—especially those representing Dorset—to our county, district and parish councillors, and to everyone else, to spread the word that British beef is 100 per cent. safe, and that we should all make it a point of honour to eat only British farm produce until the iniquitous and politically motivated ban on British food in Europe is lifted. My plea is directed particularly to those who have done their best in our county to spread alarm about the safety of British beef and to cast doubt on the integrity and competence of the members of the Spongiform Encephalopathy Advisory Committee, who have given such splendid scientific advice to the Government—advice that we have all hitherto supported.
  We want to stress our anxiety about what will happen to services and costs in what will remain of Dorset once Poole and Bournemouth depart in May 1997—although I well understand that that will not be the primary concern of my hon. Friend the Member for Bournemouth, East (Mr. Atkinson). In broad-brush terms, Poole and Bournemouth contribute 45 per cent. of our population, and almost the same percentage of our finance. So, from 1 May 1997, the new truncated and much smaller Dorset will have just half the population and half the budget that we have at our disposal for 1996–97—roughly £550 million.
  These are stark figures. If I were the chairman of a company about to lose half my customers and income, I would by now be imposing draconian disciplines and preparing the ground for major reconstruction and cuts in staff and services.
  Over the years that I have been in Dorset, our staff at county hall have served us remarkably well, but at this moment they must be feeling insecure and extremely unhappy. They must be looking for leadership of a quality that has perhaps been lacking in the past two years. I wish that I had confidence that the Liberal-controlled
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  administration was of sufficient calibre to bite the bullet and take the necessary tough and unpopular decisions. Unfortunately, its track record to date suggests that it is not.
  I offer one or two examples of what I mean. Until about three or four months before the last county council elections, leading Liberals on the county council were kept fully informed of plans for a waste disposal site at Holnest. They wholly approved of the purchase of the site, and agreed that it desperately needed to be brought into use as quickly as possible.
  Then it became politically expedient for them to disapprove totally, using as an explanation for that complete about-turn the proposition that Liberals
  "are in the vanguard of progress and therefore support a policy of waste to energy".
  They indicated at that time that they were totally opposed to any future use of landfill sites, which were so terrible for the environment.
  On the night after their victory—by one vote—the leader of the Liberal group, the leader of the Liberal Democrats and their supporters drank champagne at Holnest to celebrate the birth of this great new environmental dream. My hon. Friend the Member for South Dorset (Mr. Bruce) will no doubt tell the House just what has happened since that momentous gathering; all I will say is that the whole sorry saga adds up to a lack of backbone and an unwillingness to take tough and unpopular decisions. What did the reversal of the Liberals' support cost the council taxpayers of Dorset? I would like to see that figure quantified. I have never seen it, but I have heard used the figure of approximately £1 million.
  Of course, to cover their tracks, on this and all other things, the Liberals are always ready to "consult"—or at least when it suits them to do so. Just a month ago, we were informed that the BBC is to close its local radio station in Dorchester. There was no consultation with the people of Dorset, the district councils or, for that matter, anyone beyond a small group from the county council. One official who met the BBC agreed that it would be worth while, and that there was no alternative. That is not consultation.
  When it suits them, however, they consult. For example, quite recently, about 55,000 glossy consultation documents were sent out, in which the people of Dorset were asked one simple question:
  "What do you want to happen to your waste?"
  Approximately 4,000 replies were received, and, inevitably, the vast majority were in favour of a waste-to-energy policy. Had a box been provided for the question: "Are there any other points you would wish to make?" all those people who replied would have said, "Yes. Waste-to-energy, but not anywhere near my house." What a waste of time. We all know that people want their waste disposed of in the most effective way.
  Mrs. Diana Maddock: Is the hon. Gentleman aware that the Government asked county councils to consult on their waste plans, and that our consultation was part of that?
  Sir Jim Spicer: I am extremely grateful to the hon. Lady for raising that point. The consultation document was glossy in the extreme and implied all the way through that we were dealing with a caring council that had

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  marvellous views of its own and was committed to a waste-to-energy policy. As I said, my hon. Friend the Member for South Dorset will show only too clearly what has happened to that marvellous dream of waste-to-energy in Dorset in the face of opposition.
  As I have said, the BBC station in Dorchester will close on Friday. I regret that, and resent the way in which that has been done by the BBC, which did not consult me or any other Member of Parliament as far as I know—except, possibly, the hon. Member for Christchurch.
  My second example comes from Sherborne, and relates to the former playing fields at the grammar school there. Before the county council elections, Liberal candidates in the Sherborne area staunchly opposed the sale of the playing fields site. The inevitable "Focus" campaign leaflet condemned it as
  "selling off the family silver".
  Now, the same leading and formerly well-respected Liberals in the area are leading the charge to sell off that land for building.
  I caught one leading Liberal councillor slightly off guard, and asked, "Why on earth did you ever change your mind on this?" Unbelievably from a Liberal. I got an honest answer straight away. He said, "We never thought for a moment that we would win control of the county council." That says it all as far as I am concerned, and illustrates only too clearly the way in which some Liberals on our county council have behaved over the past two or three years.
  My hon. Friends and the hon. Lady will remember that, last year, we had a crucial and decisive meeting with the Minister of State at the Department of the Environment. At that meeting, the leader of the county council and his colleagues begged—I use that word advisedly—not only the Minister but all Dorset Members of Parliament to support the proposal for a rural Dorset county council as opposed to unitary authorities. They gave me—my hon. Friend the Member for North Dorset (Mr. Baker) was particularly concerned about this—a total assurance that they understood only too well just what this would mean in terms of a reduced service from county hall, and as a priority promised to ensure that the cost of the retention of the smaller county council would be kept to an absolute minimum.
  We asked for this debate because we are fearful that the present Liberal-controlled administration does not have the will, the stomach or, indeed, the ability to face the inevitable cuts that would result—if my hon. Friends the Members for Bournemouth, East (Mr. Atkinson) and for Bournemouth, West (Mr. Butterfill), who sadly is on a Committee this morning, were here, they would disagree with me—from the departure of Bournemouth and Poole from our county, as announced by the leader of the Liberal group, who said that the Liberals totally supported that, on the night of the county council elections. That closed off the option that most people in my part of Dorset wanted: to retain our county exactly as it is. The Liberals sold the pass on that, and then had to fall back on this much smaller rural county council.
  What help can my hon. Friend the Minister give us and the people of Dorset to monitor the administration in county hall and to ensure that it has the determination to put in train the cuts that we all know will have to be
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  made? If the Government are not able to monitor in the way that we would want, and to force the county council to live up to the promises it gave, we all know that, on 1 May 1997, after the county council elections, the new Conservative-controlled county council will inherit the lack of will and determination that has been shown by the current Liberal administration in Dorset.
  Mrs. Maddock: Will the hon. Gentleman give way?
  Sir Jim Spicer: Not again—I am so sorry. I am sure that the hon. Lady will have her opportunity in a few moments.
  I make two further points. Liberals in Dorset are very much on the defensive at the moment, and rightly so. Two recent by-election results demonstrate that clearly—one in the Hamworth division of Poole, in which their majority was cut from 823 to 87, and the other in the Lodmoor division of Weymouth, in which their majority was cut from more than 900 to just 139.
  We all know that the Liberals are desperate—I do not blame them for that—to retain control at county hall. I fear that, over the next financial year, they might consider upgrading the priorities for schemes that might just retain, or even gain, votes in marginal county council seats. Such a course of action would put even more pressure on what is bound to be a very restricted budget from 1997 onwards. I hope that the Liberal Democrats in Dorset will not embark on such a devious course of action. I can assure them that, if they do, it will be noted and exposed.
  Equally, I hope that the Liberal Democrats will not continue to raise expectations in our schools by asking them what services they would like to have after 1997. They should warn our schools that the range of services available from county hall will almost certainly have to be curtailed, a fact that may encourage more schools to opt out and take full control of their budgets with no deductions by county hall, and then buy in whatever services they need from the best sources at the best prices.
  Local politicians must spell out the education system they want. As my hon. Friend the Member for Bournemouth, East will know only too well, there are very good grammar schools and a number of grant-maintained schools in the Bournemouth area. Presumably, under the new unitary authority they will not only remain but be encouraged, by Liberal as well as Conservative councils. We certainly hope that that will happen.
  Mr. David Atkinson: When the Liberal-controlled Bournemouth borough council took control in 1991, one of its first actions was to pass a motion seeking the abolition of grant-maintained schools. I fear that the future of grant-maintained status in Bournemouth will be in jeopardy if the Liberals retain control.
  Sir Jim Spicer: I am very sorry to hear it. I had always thought that Bournemouth would take the lead in that regard.
  We should like to know what the present county council feels about the education system that will emerge in our part of Dorset after the elections. Is it completely opposed to grammar schools? Does it see any merit in

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  grant-maintained schools? If not, is it intent on maintaining the comprehensive system? All those questions must be answered during the next few months; the size and shape of central education services at county hall will depend on the answers that are given.
  Having spoken for just over 15 minutes, I want to end as I began, by saying a little about the morale and quality of staff at county hall. They are a superbly dedicated group, but, inevitably, their morale has been lowered, and many of the more senior staff have announced their intention of leaving. Decision-making from the top will be desperately needed over the next year. If we are to have a chairman and a managing director, they will have to make decisions of the kind that many of us have had to make in business over the past 10 years when our companies have been cut right back. We have had to make those decisions, and we have had to carry our staff with us. I implore the present county hall administration to cut out the politics, to do what is right for the people of Dorset, and to carry their staff with them.
  I was distressed when, last Friday, the Liberals on West Dorset district council—which has been a shining light in local government—decided to turn it political. None of us in West Dorset wants that: it is entirely unnecessary. Let me end on that sad note, while expressing the hope that some of the thoughts that emerge from today's debate will strike a chord with people at county hall.
  9.52 am
  Mrs. Diana Maddock: The debate is very well timed. It takes place just a few days after the publication of the Audit Commission's league tables for local authorities; it also gives us an opportunity to assess the progress that the county is making during the current reorganisation. Moreover, it coincides with an appeal in the House of Lords relating to a case involving the Government and Dorset county council.
  The debate also gives us an opportunity to put the record straight. There has been misinformation in Dorset. The hon. Member for West Dorset (Sir J. Spicer) spoke of the need to take politics out of the county's affairs; I hope that he will do that himself, and that we Dorset Members will do our best to fight Dorset's corner here at Westminster.
  The Audit Commission's figures confirm what I have always believed—that the county council is very underfunded by Government. Although its spending is at the capping limit, expenditure per head in Dorset is the lowest in the country. Because of that, services might be expected to be poor, but the Audit Commission praises the county's efficient performance. Although it is the third lowest spender on education, its GCSE results are the sixth highest in England. As for the thorny problem of waste disposal, only two counties manage to recycle more than Dorset. It ranks fifth highest among the English counties in the provision of library books and other materials.
  If I had been allowed to intervene at the appropriate point, I would have asked the hon. Member for West Dorset when he last spoke to officers and councillors at Dorset county council about the progress they had made with reorganisation. As far as I know, the hon. Gentleman did not speak to officers, or even to the Conservative group leader, before today's debate—unless he has done so since yesterday morning.
  Sir Jim Spicer: That is absolute nonsense. I speak to the leader of the Conservative group on a weekly basis, and have done so ever since last year's crucial meeting. I do not take all my information from him, but I am told about some of the council's expenditure—such as the money spent on establishing a European office, which was wasteful and unnecessary. If you look after the pennies, the pounds will look after themselves.
  Mrs. Maddock: I am glad that the hon. Gentleman raised the question of Europe, because that is one of the issues on which there has been disinformation. Hon. Members will see that if they consult this Session's early-day motions. At a town council meeting in Verwood on Monday, I was asked why we were not receiving more money from Europe. Those who asked me that question had attended meetings in Devon and Cornwall; I explained that Dorset was slightly different. The county council had, in fact, saved money by uniting with Hampshire to try to ensure that we obtained what we could from the European Community, to which we pay a good deal of money.
  Mr. Ian Bruce: Will the hon. Lady give way?
  Mrs. Maddock: No. I want to make some progress.
  Let me say something about local government reorganisation. The Minister was responsible for a conference entitled "Partnership Across the Tiers". He pointed out that the districts were doing good work, and identified three issues that needed attention. One was good will.
  I believe that Dorset county council has tried to generate good will between itself and members of district councils at all levels. The Minister also wanted a systematic review of all services. There is an agreed programme for that in Dorset; much of the work has been undertaken at officer level, and reports will be submitted to the county's reorganisation committee. The chairmen of policy and resources meet every fortnight to discuss reorganisation.
  Only a few counties are working with all districts: that was the Minister's verdict. Dorset is one of those counties. Its chairman of policy and resources has written to the district councils assuring them of its good will. The door is open: members of district councils have been invited to attend and speak at meetings of the county council. I hope that the hon. Member for Bournemouth, East (Mr. Atkinson) will give credit where it is due. County council officers have given every help to Bournemouth and Poole in the run-up to unitary status.
  The hon. Member for West Dorset drew attention to the serious problem of funding during reorganisation. Dorset's budget could be reduced by up to 45 per cent. However, Bournemouth's budget will increase by 600 per cent. I know that it is taking on new powers, but even so, that is a large amount. Poole's budget will go up by about 700 per cent. Obviously, we will need to monitor with great care the massive transfer of staff and budgets and services.
  There will be a drastic reduction in chief officer posts in the county departments, and a reduction in the committee structure. There is a root-and-branch examination of staffing and the funding of county services. There are detailed discussions on specialist services, and discussions

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  are starting to ensure joint administration where possible, so that we do not duplicate what is happening in the two tiers. We also want meaningful dialogue between district, town and parish councils.
  I spoke about the meeting that I attended in Verwood on Monday. I knew that there would be a local government Minister in this debate, so I promised to raise the concern of the people at that meeting about funding. When the uniform business rate was introduced, part of their funding disappeared, and I should be grateful if the Minister could say whether he sees any other way of returning finance to the town and parish councils which do so much good work at local level.
  As we speak, an appeal is taking place in the House of Lords involving the county council and the Government. The Government have asked county councils to try to make sure that, where possible, services are put out to the private sector. Dorset has done that for residential homes for elderly people who need care. That has cost the council money, but the Government are not prepared to reimburse it. There was one appeal which the county won, but the Government are appealing against it; that is not the best way to support our county when it is going forward, and in view of its good record on providing services for the elderly. It has followed the Government's advice.
  Hon. Members have spoken about education and about what should be happening in Dorset. Over the years that I have been in this place, it has become clear that Dorset does not get a fair deal. That has also become clear to the local electorate. That is why, in the May elections, despite the points that were made by the hon. Member for West Dorset, the Liberals made an enormous number of gains and the Conservatives lost many seats. We gained 21, and the Conservatives lost somewhat fewer seats than that.
  Over some years, the verdict on the Liberal Democrats is that they like what they do. People are pleased that we consult them and listen to what they say. The hon. Member for West Dorset spoke about leadership. Leadership is also about working with people for the benefit of the community and listening to them. That is what Liberal Democrats have done in Dorset, and that is why they have been rewarded with votes.
  It is for the Government to look at why Dorset is the lowest spender and how they can help us. Rising numbers of children are entering our schools, and increasing numbers of elderly people need care, but we are not being given the grants to keep pace with those rising demands. It is up to the Government to recognise that Dorset is not the same as some of the counties in the south-west. They give extra help to counties in the south-east in recognition of the costs of providing services, and anyone who crosses the border from Hampshire to Dorset will see that the amount plummets.
  There is as much as £100 a head difference on each child in a school, and in the average first school that means an extra teacher. Some children in Highcliffe cannot get into the school, because there is not enough space and there are not enough teachers. If those children lived two or three miles down the road in Hampshire, there would be enough money to fund a teacher, and they would be able to attend school there.
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  The Government should reward Dorset for its increased good stewardship, but that has not been done. Dorset Members should unite. I ask Conservative Members to stop fighting the Westminster corner in Dorset, and join me in fighting Dorset's corner in Westminster for a fair deal. People in Dorset recognise that they are not getting a fair deal, and that is why they have voted for those who have spoken up for them.
  I am pleased to note that the hon. Member for West Dorset agrees that we need to encourage all those in county hall, and that we need to do our best. I ask him to join me in ensuring that we stop the knockabout and fight for a fair deal for Dorset.
  10.5 am
  Mr. Nicholas Baker: I congratulate my hon. Friend the Member for West Dorset (Sir J. Spicer) on securing this debate on local government in Dorset. The debate is timely and urgent. I associate myself with his remarks about BSE and its effect. I endorse his wish to restore confidence to people in Dorset, who eat beef, I am glad to say, and to the farming community. His remarks were timely and they have my complete support. The ban on beef in schools and its extension to Dorset county schools is not the way to address the scientific evidence or to restore confidence in that excellent product, British beef.
  The history of Dorset county council until 1993 under Conservative control was of a low-spending, low-charging authority that was free from borrowing. It was managed on sound and clear lines and had councillors who were good at listening, were free from party politics and worked for the benefit of Dorset people. Examples were the continued, responsible financial management of the county's affairs, a resistance to borrowing and steady improvements.
  Capital spending in the schools programme was noteworthy, and additional spending on, for example, the education of children with special needs was a substantial achievement. The roads programme was responsibly managed, and, thanks to good capital management, road maintenance and new road schemes were implemented. All those areas are currently under threat.
  I agree with my hon. Friend that Dorset county council has been blessed with high-quality officers and staff, to whom I pay tribute. They have followed their instructions and have done the best they could within them for the county. Any criticism in my speech is directed not at them but at their political masters.
  I return to the point succinctly made by my hon. Friend the Member for West Dorset. The local government review will have a substantial impact on Dorset, and I make no secret of the fact that the plans that are being implemented to allow Bournemouth and Poole to go their own way, for reasons that I understand, while the remainder of the county remains a one-county unit, were not my favoured solution. However, it was clearly agreed that, if that plan were decided by the Secretary of State, the county council would make strong endeavours to reduce the cost and administrative expenses in the county that remained, so that, after reorganisation, the level of services and charges, apart from reorganisation costs for my constituents, would be unaffected.
  County council leaders clearly recognised that that would involve a reduction in administration and the severing of offices between the county and the urban

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  authorities in Poole and Bournemouth, and that maximum co-operation would be ensured between elected representatives in Dorset at all necessary levels to achieve the necessary economies, contractions in administration and preservation of services.
  Mrs. Maddock: When was the last time the hon. Gentleman had discussions with the county council and with councillors? What progress has been made in the direction that he has mentioned?
  Mr. Baker: The answer to the hon. Lady's suggestion that I have not been in touch with the chief executive is that I received a written report from him in the past week. She has anticipated the next part of my speech.
  I requested a report on the current situation of the local government review. I was glad to receive the reply, but it was less than satisfactory. Necessary progress in achieving economies and reduction in bureaucracy and administration has not yet materialised, although the officers are, of course, doing what they can. They are doing an excellent job, as they always have done, but a funding shortfall of 5 per cent. to provide current standards of service will not do. There must be some political will and co-operation, which was agreed in my original discussions, to ensure that services for my constituents and all our rural constituents are preserved.
  Dorset county council must do a great deal—of course, there is a great deal that the district councils and district councillors must do as well—to reassure the people of Dorset that services will be maintained.
  Mr. Ian Bruce: Does my hon. Friend recall that the reports we were originally given by the district councils and the county council ruled out the current suggested reorganisation in Dorset, because it was financially unviable, as no savings were coming from unitary authorities for the rump of the county? Are we not criticising this county for deciding at the last minute to change its negotiating tactics, and providing something to Dorset taxpayers that will never be paid for?
  Mr. Baker: Yes; my hon. Friend is, of course, quite right. I think that it was explained to the county that, if it changed its mind in that way, there would be very severe financial implications for the administration and bureaucracy, which had to be attacked. We received an assurance that they would be attacked, because of the point that my hon. Friend rightly made.
  Mrs. Maddock: Will the hon. Gentleman give way?
  Mr. Baker: No; I am sorry, but I have given way once, and I have other things to say.
  My hon. Friend the Member for West Dorset described the Liberal Democrats' U-turn—supporting the landfill site at Holnest and then abandoning it when it proved unpopular, which unseated a distinguished and respected Conservative councillor—to achieve control of the county council at the election. That they abandoned the alternative of incineration when it proved unpopular was a disgraceful episode, and it has done nothing to improve the standing of politicians, particularly the standing of Liberal Democrats, in Dorset. I hope that such episodes will not be repeated.
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  In order to secure votes in the election, Liberal Democrats gave commitments to support capital expenditure on schools. Speaking as an outsider and one whose constituency was not affected by those commitments, I must say that the urgency of the commitments was questionable. They achieved power with the assistance of promises on school capital spending, but they found that they had so skewed the budget that vital revenue expenditure on education had to be cut.
  Instead of providing, for example, for part of the easily anticipated teachers' pay settlement—as the previous Conservative administration had done—at a time, I accept, of a very tight financial settlement, they failed to provide sufficiently for the settlement and simply passed on the costs and the problem to schools, urging them to deal with the matter and saying that it was all the Government's fault.
  The well-worn and substantially misplaced complaint that everything that is inconvenient or difficult is the fault of central Government may have fooled some of the people on that occasion, but it is increasingly failing to fool all of the people all of the time. The frequency with which the Government are blamed for facts of life such as budget constraints, awkward choices and other decisions that are local government's responsibility—which responsible local government should be willing to exercise—is not only wearing thin in Dorset but is eroding local responsibility for local matters.
  Dorset county council has grievously disappointed those of us who support the extension of nursery schools. It rejected the opportunity to act as a pilot for the nursery school voucher scheme, which would have benefited many parents in Dorset. Some courage, some leadership, and a decision that was not entirely easy to make were required to grasp that opportunity.
  My hon. Friend the Member for West Dorset, vigilant as ever, and others of us arranged for a visit to Dorchester by the Under-Secretary of State for Education and Employment, so that we could explain the scheme and extend the time in which Dorset county council might have joined in. That visit was to no avail. The minds of council leaders were made up on the matter, and—on party political and doctrinal grounds—the parents of Dorset were denied that opportunity.
  As an hon. Member has already said, I hope that the county council will respond positively to applications for grant-maintained status where schools and parents wish it. I should like to add a bouquet here. There have, hitherto, been no grant-maintained schools in my constituency, but I am very pleased to say that Beaucroft school, in Colehill, which is doing a first-class job of educating children with special needs, has been granted that status. I am sure that the county council joins me in wishing it well on its independent status, which I have no doubt will be to the benefit of all its students.
  One of the county council's responsibilities is, of course, social services and therefore implementation of care in the community, which has had the support of all political parties and everyone involved in social services. The total amount available to spend on social services through the special transitional grant and standard spending assessment is £93.8 million in 1996–97, which is an increase of £7.285 million—or 8.4 per cent. in cash terms—on 1995–96. Budget cuts below that provided for through the SSA by central Government grant have been a major setback for Dorset social services.

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  The very large hike in charges for non-residential care has also given rise to substantial concern among disabled people and others affected. I have the greatest sympathy with the social services department, which is gamely trying to provide a service against the financial background provided by its political masters, but the way in which this matter has been handled has surely called into question responsibility for care in the community, and whether it would not be better handled by the Department of Health and general practitioners. I know that my hon. Friends may have more to say on that matter.
  As I said earlier, I am concerned about the future of highway maintenance in the county. Many of us take the view that the days of large-scale road construction in Britain are over, and that the traffic schemes we have must increasingly be sensitively handled and justified in terms of cost. Part of our approach to roads in future has to be a much greater analysis of how each road is used, and how—by controlling traffic flows, using traffic calming measures and in other ways—the use of each square foot of road can be maximised without the expense of new road construction. It makes no sense, however, to downgrade road maintenance in a way that threatens road transport in the county, which only serves to defer the financial bill, as some of us have already had to point out.
  I am glad that we have played some part in persuading the county council to consider traffic calming measures and a more sophisticated use of roads. I hope that those measures are developed in the future. I pay tribute to the county surveyor and his staff for their continuing dedicated work.
  I have mentioned the perennial wail of Liberal Democrats at county hall about Dorset county council's budget and its standard spending assessment. I know that the Minister will address that point in his reply, but I must say that—in the years in which the Government have rightly reigned back on their own and on local governments' expenditure—Dorset has, with one exception, been treated fairly.
  The SSA settlement for the current year was increased by 2.9 per cent., and the education component was increased by 4.8 per cent. I will not be alone in Dorset, certainly among hon. Members, in saying that I regard education expenditure as a very important priority.
  The exception, to which I referred a moment ago, is the way in which Dorset is affected as a result of the area cost adjustment factor in the SSA. The hon. Lady also referred to that. Although Dorset and adjoining counties to the west are excluded from any beneficial treatment, it is true that Hampshire to the east has benefited under the formula in a way that can hardly be justified in comparison with Dorset. I am glad that the Secretary of State for the Environment has asked for that factor to be investigated, and that the relevant team is due to report in June. I hope that some adjustment to the formula will result, and we anxiously await the outcome of that investigation.
  I hope that the present regime at county hall will carefully consider its planning responsibilities. As part of those responsibilities, I am aware that it is conducting a consultation on Dorset's structure plan, and that it has said, as a regional guidance figure, that about 63,000 more homes will be built in Dorset by the year 2016. It is quite
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  clear that that figure has been found as a result of a mechanical extrapolation of existing trends. It is far too high.
  Mrs. Maddock: Will the hon. Gentleman give way?
  Mr. Baker: I am sorry, but I cannot give way. I must not shut out other hon. Friends, or I shall be lynched.
  The Minister for Local Government, Housing and Urban Regeneration has made it clear that he would like a debate to be held on the precise needs of each county, as well as an examination of the capability of each county to absorb increased development. I am pleased that he has also stated the aim that half of new developments should take place on existing developed land. I hope that that could be regarded as a minimum requirement in many parts of the country.
  I hope that the county council will try to assess properly the needs of the county, rather than swallow wholesale a figure arrived at mechanically, and then simply pass on responsibility for it to the Government. I expect, however, that it will do that. The greater say in local planning matters for which I and a number of my colleagues argued strongly in the past was not achieved in order to allow the county council to abandon responsibility for such housing figures. The people of Dorset do not want over-development of the county. They expect our precious environment to be respected and conserved, and so do I.
  It would be fair to summarise by saying that the current delivery of local government services in Dorset is a matter of concern to me and my constituents. One day, Dorset county will again have an excellent Conservative administration, as it enjoyed in the past, but until then I hope that hon. Members and county councillors of all parties can work together. I renew that wish, despite the criticisms I felt it right to make today.
  I hope that the Liberal Democrats who control Dorset county council will abandon partisan party politics for its own sake; consider the best interests of the people of Dorset; and have the courage to take the difficult decisions which are necessary to preserve the services that the people of Dorset deserve.
  10.22 am
  Mr. David Atkinson: I, too, welcome this timely opportunity to discuss local government in Dorset. As the House knows, the borough of my constituency and that of my hon. Friend the Member for Bournemouth, West (Mr. Butterfill), together with the borough of my hon. Friend the Member for Poole (Mr. Ward), who is present, are looking forward to becoming unitary authorities next year, to which elections will take place on 2 May.
  In our constituencies, there is near-universal acclamation at the prospect, now certain, of ending our direct relationship with county hall. We can then become responsible for our own destiny. The achievement of that break during the lifetime of this Parliament was one of the principal aims I set myself at the general election. That aim will now be delivered, despite the opposition of the Dorset county Labour party. Our constituents will applaud this Government for making it possible.
  In Bournemouth's case, the change represents a reversal of the injustice imposed in 1974 when it ceased to be a county borough council. We also lost our county,

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  Hampshire, and were moved into Dorset to underpin—that is, to subsidise—a predominantly rural economy. I am still receiving letters addressed to "Bournemouth, Hants", either as a result of continuing ignorance or in continuing protest.
  Even though Bournemouth did not choose to have its major services run by Dorset, I believe that it made every effort to make the new arrangements work. As we come to the end of our 23-year relationship with county hall, I hope that due tribute will be paid, as I pay it today, to all those who have represented Bournemouth and Poole for their contributions to the county of Dorset.
  Despite those contributions, however,it must have soon become clear that it would prove impossible to assimilate adequately the provision of services to the predominantly urban and expanding conurbations of Bournemouth and Poole with those of the predominantly rural county; and so it has proved. It has, however, only become apparent in more recent years that that credibility gap between county and district has widened, and certainly so following the election of a Liberal-controlled council in 1993, for the first time in the county's history.
  This winter is the first for three years that I, and I suspect all my Dorset colleagues, have not received waves of orchestrated letters from angry parents of primary school children complaining about overcrowded classrooms. They had every right to complain, as I saw for myself when I visited all the primary schools in my constituency in response to their letters. Of course we all pursued those concerns with Ministers, whose replies acknowledged the problem, but fairly pointed out that Dorset's SSA for education increased by 30 per cent. between 1991 and 1995—well above inflation. What has been the problem? My hon. Friend the Member for Bournemouth, West, with great assiduity, has exposed the fact that the cost of the provision of central services from county hall is at the heart of the problem. Dorset is spending £660 per pupil per year on county bureaucracy—far more than other shire counties.
  What cannot be challenged is that overcrowded classes in our primary schools represent a failure by the strategic authority—the county council—to match the provision of education with those planning permissions it has allowed, which has led to the increase in classroom populations. Yet it was the same county council which, 10 years before, closed down a much-loved school in my constituency, Beaufort, because it was surplus to requirements. Much of its site was sold for redevelopment.
  Another cause for concern that my hon. Friends the Members for Bournemouth, West and for Poole have asked me to raise is the continuing lack of speech therapy provision in Dorset's special schools, notably Winchelsea. I accept, of course, that the Health Commission is the providing authority. It seems that the local education authority and the Health Commission blame each other. It is hoped that the forthcoming reorganisation will produce a new determination to resolve that problem once and for all.
  Mrs. Maddock: Will the hon. Gentleman give way?
  Mr. Atkinson: No. I do not have much time, and I want to hear from other hon. Friends, the Opposition spokeswoman and the Minister.
  956
  In addition to primary school education, growing dissatisfaction has been expressed about the county-run library services in Bournemouth, because of reduced opening hours and threats to close down local libraries such as Springbourne and Strouden Park in my constituency.
  As my hon. Friend the Member for North Dorset (Mr. Baker) has said, undoubted dissatisfaction is felt at the dramatic increase in home help charges to the elderly and the housebound, particularly when it is realised that the county does not even spend its SSA-related grant for personal social services. There is also growing awareness of the dire consequences of the county's abandonment of the route that would have completed the link between our superb inner-urban highway, called Wessex way, from the east, with the equally good Dorset way, which leads to the west. I hope that the two new unitary authorities of Bournemouth and Poole will be able to rescue that completion as soon as possible.
  In the light of those experiences of a Liberal-run county council, it would be the greatest tragedy if, having once again become our own masters in Bournemouth, the Liberals were to be elected to run the new unitary authority in May. In that event, one would expect Bournemouth council, with a Liberal majority, to follow the official Liberal party policy. It is not awfully clear what that policy is, but I understand that the Liberals remain committed to a local income tax. That would mean that income tax payers would be taxed not once but twice, and someone at the town hall—it might be one's neighbour—would know all about our tax returns.
  The Liberals are also committed to higher income tax, so income tax payers would be not only paying twice, but paying more. That should come as no surprise, because, this year, Liberal-controlled councils have, on average, charged 20 per cent. more in council tax than Conservative-controlled councils. That is equivalent to an extra £112 on a band C house. The Liberals also want to get rid of the capping regime, so that they could spend even more than the Government allow them to spend at the moment.
  A Liberal-controlled council would be expected to follow official Liberal policy to abolish Bournemouth's grant-maintained schools—Bournemouth school for boys, Bournemouth school for girls, Avonbourne and St. Peter's in my constituency alone. They were good grammar and secondary modern schools before, but, as the league tables show, they have excelled since being free of bureaucratic LEA control.
  That, however, should come as no surprise, because, as I told my hon. Friend the Member for West Dorset (Sir J. Spicer), when Bournemouth council fell under Liberal control in 1991, one of its first actions was to pass a resolution committing itself to end grant-maintained status for schools. Its policy was to end the assisted places scheme for children from poor backgrounds to obtain places in independent schools, about which the vicar of St. John's, Boscombe recently wrote to me to thank me on behalf of his daughter, who goes to Talbot Woods independent school.
  After our experience with Liberal-controlled Dorset county council, any prospect of Liberal councillors, supported by Labour colleagues, taking control of our new authority, whose budget will rise fivefold up to

  957
  £150 million, and of our good schools, social services, libraries and highways, horrifies me. It should horrify my constituents.
  The voters of Bournemouth will want to know the Conservative alternative for our borough's future. Having read our draft manifesto, they will not be disappointed. It represents a clear strategy for the future that will carry the support of residents and businesses. It emphasises that Bournemouth's future success, like that of its past, lies in the promotion of the quality and value for money of its attractions and services.
  My constituents will welcome the 10-point plan to make Bournemouth safer from crime and from the criminal, including more security cameras, crime prevention initiatives and an increase in the police presence on our streets. We know that, following the Prime Minister's announcement of 5,000 more police nationwide, Dorset will receive 66 extra police, on top of the 128 extra officers that it has had since 1979, but there is no reason why our chief constable cannot add to those. He now no longer needs Home Office approval. He will have more money to do so—there will be an increase of £4.1 million, or 6.2 per cent., next year—and he has scope to replace deskbound police with civilian staff.
  We all welcome the recent announcement that, thanks to our persistent representations, council tax payers will no longer contribute to the cost of securing party conferences in Bournemouth. All that is different from what is suggested by the Liberal Democrats in their current propaganda campaign. I quote from the so-called "Parliamentary Spokesman for Bournemouth East"—obviously the Liberal Democrats' candidate to challenge me at the next election, but I can understand why he does not want to say so. He says:
  "For years the government refused to allow Dorset Police any extra officers."
  We know that that is not true. He goes on:
  "Recorded crime is rising in Dorset according to Home Office figures."
  I hope that he will withdraw that statement in the light of yesterday's figures that, last year, recorded crime fell in Dorset as well as in the rest of the country.
  My constituents will welcome our Conservative manifesto commitment to improve standards in bedsits and hostels, the so-called houses in multiple occupation. I commend the Government on going further than they were originally prepared to go in the Housing Bill, which is before the House, to give town halls the powers they need to deal with the problems, which, if left unchecked, would have destroyed tourism in our town and, ultimately, the town itself.
  That will require, however, a council with the will and determination to use the new powers to their fullest extent to hold to account the seedy landlords and their organisations, so that it may remove this cancer from our midst. Only a Conservative council will do that. Our voters will respond to that message in particular.
  It will, I hope, be clear to my constituents that the outcome of the elections on 2 May will be crucial to Bournemouth's future. It was Conservative councillors who laid the foundations and built the Bournemouth of which we were proud. The past five years of Liberal
  958
  leadership, with Labour in support, have proved no better and, in many ways, much worse, as last week's Audit Commission report has shown. As our relationship with Dorset county council becomes history, I hope that our voters will have the good sense to return a Conservative council again, to take Bournemouth into the 21st century.
  10.34 am
  Mr. Ian Bruce: I also congratulate my hon. Friend the Member for West Dorset (Sir H. Spicer) on securing this timely debate. I especially welcome the opportunity to nail once and for all the biggest lie in Dorset. That lie has been mentioned by the hon. Member for Christchurch (Mrs. Maddock). It is that Members of Parliament for Dorset and the previous administration in county hall have not fought Dorset's corner. Nothing could be further from the truth.
  I cast no aspersions on other people's ability to fight for Dorset, but any Member of Parliament who comes to this place knows that they represent their constituents, and that no one else will fight for a better share of national resources for Dorset. I therefore become angry when I read headlines trying to steal the thunder of Members of Parliament, all of whom have been in this place much longer than me and have done an extremely good job, constantly bringing to Ministers' attention what we need for our Dorset constituents.
  That should never remove from our minds the way in which we correctly use money in Dorset, and the fact that. throughout the decades, our officers have been extremely skilful in dealing with the low resources coming to Dorset. The hon. Member for Christchurch mentioned what good education we achieve with virtually the lowest spending on education. That must be reflected at the beginning of all our remarks. We must be proud of teachers in Dorset and of how they achieve value for money. Many people could learn front what we do in Dorset. We are proud of everything we do in our national health service and other such organisations. I hope that any robust comments I make should not reflect on the abilities of the people who work in those organisations.
  At our first meeting with the new administration, the leader of the Liberal Democrats and the new chairman of the policies and resources committee came to see us in a spirit of co-operation. We had what seemed to be an extremely positive and sensible exchange of views. I did not agree with Councillor Trevor Jones's view that we would be wasting our time if we continued to press the Government on several issues. That was annoying.
  One of the issues was the area cost adjustment. Councillor Jones said that we had been banging on about it for many years, and that the Government simply would not listen. To a certain extent, we were becoming worried that that was true.
  Another issue was the funding of the police. At the meeting, he specifically said—I have noted it down; I was a little surprised—that we should concentrate on increasing the standard spending assessment for education and on other sectors, arid remove from our campaigning tactics the area cost adjustment and the funding of the Conservative conference for the police force. Councillors agreed, however, that we should still bang on about those issues and press the Government.
  The Government have now said—belatedly, but it is to be welcomed—that they are considering the area cost adjustment, and that a report will be published this

  959
  summer. I hope that the inequities of the policy will at long last be clear to everyone. It will be shown that area cost adjustments were a fiddle factor for high-spending inner-city authorities, and that the Labour party could not have continued such high spending if the authorities, especially those in London, had received only their fair share. It shows that the south-east has been receiving far too much of the national cake.
  Given what has happened, it has been difficult to get at the facts and figures of the low SSA, as newspaper headlines on the latest settlement have shown. The Government will know that Dorset has just received the best settlement ever. One only has to read Councillor Trevor Jones's speech to discover that that is exactly what he thinks. One headline said, however, that there would be £4.7 million-worth of cuts. The council came to that wonderful figure simply because it decided that it would like to increase its budgets across the board by 7 per cent., and when it received only an increase of 6 per cent., the difference was £4.7 million.
  Mrs. Maddock: Conservative Members seem to be afraid of facing the facts. Is the hon. Gentleman aware that at the end of Trevor Jones's excellent budget speech—I understand that Mr. Jones is yet to receive a reply from the hon. Member for South Dorset (Mr. Bruce) to questions on some of the points that the hon. Gentleman has raised in the press that appear not to be quite right—all his Conservative colleagues said that, although the proposed budget was excellent, they were not prepared to vote for it, which is pretty poor, and that they sat on their hands? They did not propose another budget. I have yet to hear how Conservative Members think that all the wonderful services that they think are necessary should be paid for.
  Sir Jim Spicer: Just get on with your speech.
  Mr. Bruce: My hon. Friend the Member for West Dorset (Sir J. Spicer) suggests that it would be a good idea if I got on with my speech and did not give way. It clearly would have been wise not to allow the hon. Lady her to make a fool of herself over that issue.
  We all know—I am glad that the hon. Member for Christchurch (Mrs. Maddock) emphasised it—that this year Dorset county council received its best ever settlement. Despite that, it issued press releases saying that it was losing £4.7 million, and my constituents believed that all their services would be cut. Yet the truth is that budgets will increase by 6 per cent., which most councils would have been amazed to receive from the Government in such a tight spending round.
  Mrs. Maddock rose
  Mr. Bruce: If the hon. Lady can contain herself a little more, I shall try to explain exactly why it was so difficult to get to the truth about the county's financial arrangements.
  When Dorset received what we all agree was its worst settlement, we had great difficulty in understanding why, when the Government allocated only half the cost of the increase in teachers' salaries, the Liberal Democrat-controlled county council decided not to allocate even that amount to schools. It gave the schools zero per pupil from that amount. The newspapers then of course reported how terrible that was and advised people to write to all their lousy Conservative Members of Parliament about it.
  960
  At the end of that year, when we were looking for about £5 million to give to schools, we found that the county council had been able to put away, apparently in its back pocket, £10 million. Some people have been rather upset about my use of the word "filched" concerning that money, and I withdrew it in December in a letter to the chief executive.
  I should explain to hon. Members exactly what happened. I had the greatest difficulty understanding the reports on the county's funding. Although it said that it had been able to put £5.5 million in one year into its balances, I could not find the other £4.5 million that it claimed it had underspent. I wrote to the chief executive and received a rather interesting reply. Rather than what I had expected him to say—that the money was to be found in this fund or that—I was told:
  "The cost centre underspends in 1994–95 are not included in the general balances; as explained they are earmarked for spending in the current year and are playing a vital contribution to maintaining existing services."
  In other words, one can look as hard as one wants at the county's accounts and one will not find that money. How can councillors, Members of Parliament and head teachers put a case for funding to the county when money is hidden so well?
  I should like to turn to local government reorganisation, where I am afraid that again we find the Liberal Democrats' sleight of hand, at which they seem to be so adept. It is interesting that, when the county council suddenly changed its policy on the way in which the county should be divided, a campaign, financed at county hall, was launched to keep the county as one body, and resulted in the distribution of petitions, posters and all sorts of literature, which were so misleading it was unbelievable. The official line was in fact that the county should be split into three and that all the district councils should be retained.
  The House will be pleased to know that the leader of the Liberal Democrats, Geoffrey Tapper, wrote to me when I made allegations about that campaign and passed them to the district auditor. He said on 29 April:
  "I shall not lie awake at nights worrying about the district auditor checking out your allegations."
  I hate to tell Geoffrey Tapper, but I spoke to the district auditor this morning and discovered that he will be having a meeting on 3 April with the county council's chief executive. That will give the council the chance to comment on the district auditor's report. I think that Geoffrey Tapper ought to start having a few sleepless nights.
  The allegations have been levelled not only by the Labour mayor of Dorchester and myself, but by many others. I discovered them at a dinner party where a lady arrived late because she had to load into her car all the material that was being produced and photocopied in county hall in order to spend the first few hours of the following morning passing the stuff out to all the education institutions. When I challenged the county council about whether such a practice was a proper use of council funds—I assumed that it must have voted on it—I was told that the cost had been absorbed in the budget. Which budget? It was of course the education budget, the one that was under such pressure that all the allocation could not be spent. We ought to find out what is going on.
  The hon. Member for Christchurch wanted to jump to her feet to challenge the fact that there have been fewer police officers recently, which is right. The reason for

  961
  that, however, is that, when the council became Liberal Democrat-controlled, it got rid in a by-election of Chips Selby-Bennett. who had been the biggest campaigner among the Conservatives for more bobbies on the beat.
  The Liberal Democrats attacked him on the premise that the Conservatives were not doing enough for the police, yet the first thing they did was pass an emergency budget to cut police spending. The proposal was sent off to the police committee, which was not Liberal Democrat-controlled and included magistrates and all sorts of other representatives. The committee of course threw out the proposal, and forced the council to think again and retain the Conservative commitment to spend an extra £2 million every year on policing.
  When the Government decided that policing should be funded separately, the county could still have allocated that £2 million to the police force if it had wanted to and if it had believed its own propaganda that was being sent out week after week. Of course it did not. It said that the funding was separate, and it was therefore able to dump it without being blamed. Press releases then said that the council had to get rid of some of its police officers. That is the sort of lie that we shall nail in this debate.
  We have heard a little about the European office. Does it cost £50,000? Does it cost £100,000? Direct costs may be about £50,000, but we would like to know all about the indirect costs of having officers in this country.
  The hon. Member for Christchurch talked about a parish council asking, "Where can we get help?" Well, when I asked councillors from Weymouth and Portland council, which is not controlled by my party, how much help they got from the county council's spending on the office in Europe, they replied, "Nothing." They do not even know where it is, and have never had a report from it. Nor has any Member of Parliament. We have never heard anything from that office.
  I have told councils time and time again that we are allowed at least one free visit to Europe every year, and that we have an excellent Member of the European Parliament in Bryan Cassidy, who knows everybody. "Please use him," I say. Of course they do not, because that would not give them the headlines, or allow councillors to go and open offices and have freebies in Europe.
  Another forthcoming report suggests that we join yet another such organisation. That would be fine if it saved us money or got us more money, but if it does not, we must find out what is happening.
  I know that I am rapidly running out of time, but I must say something about waste disposal. In my constituency there is a site at Crossways, and I worked with local people who were upset about the life of that tip being extended. I also worked closely with the Liberal Democrats—they were in the Social Democratic party then—and the campaign was successful. It was fought on the planning issues, and the application was turned down, so we thought that there would be no tip there.
  Then the county spent a lot of money—about £1 million, I think—deciding on Holnest, which my hon. Friend the Member for West Dorset has mentioned. It spent that money producing a scheme that had the total support of all the political parties—until election time came round. Then
  962
  the Liberal Democrats went out and campaigned with other people, many of whom were Conservative supporters, against a tip at Holnest. They promised to dump the idea straight away and choose another type of waste removal.
  The council then decided on an incinerator, and even negotiated a contract with a company, which must have spent tens of thousands of pounds getting it organised, with details of the pricing for the incinerator and everything else. But of course, when a decision had to be made on the siting—the choice was between two sites in my constituency—the local people would not have it. Indeed, the local Liberal Democrats would not have it, either, and they campaigned against it. So that idea was knocked on the head. We are now back to Crossways.
  I know about the difficulties of waste disposal, and the county's problems. None the less, the Liberal Democrats cannot keep marching their troops up to the top of the hill, spending millions of pounds on plans and then, as soon as there is some resistance, saying, "Sorry, officers. Rip all that up and do something else." That is Liberal Democrats through and through. They are not willing to take difficult decisions; they just want to moan and tell people that it is somebody else who is stopping them spending the money.
  We were also told that, if the council were allowed a higher cap, it would not spend all the money. But needless to say, as soon as it was given a higher cap, it spent right up to the limit. I hope that we shall get some good news for Dorset from the Minister. He can rest assured that Conservative Members will ensure that any money is spent correctly.
  10.53 am
  The Parliamentary Under-Secretary of State for the Environment (Sir Paul Beresford): Like everybody else, I congratulate my hon. Friend the Member for West Dorset (Sir J. Spicer) on securing the debate. I congratulate, too, my hon. Friends on having joined in, and, of course, the hon. Member for Christchurch (Mrs. Maddock).
  Today, a number of markers have been put down for local authorities, especially Dorset county council, which will be called upon to meet those targets—targets which in many ways it has set for itself. The hon. Member for Christchurch was to some extent trying to defend the indefensible—but we shall wait and see; the results will come forward.
  In defence of the council, the hon. Lady mentioned the Audit Commission report. I do not think that I have ever seen an Audit Commission report on a council that could not be called a curate's egg, so obviously she can pick out some of the nice bits and leave some of the more distasteful bits for other Members to ponder upon. I hope that they will do so.
  The hon. Lady also made comparisons of costs with other counties. That is difficult to do. As she will be aware, one must consider standard spending assessments and other factors, and also the nature of the other members of the family. Those factors alone are enough to suggest that savings would be available.
  The hon. Lady made the standard complaint about expenditure vis-a-vis Government expenditure. We must recognise that, as has been said, the SSA for the county increased by 2.9 per cent, its SSA for education rose by 4.9 per cent., that for the fire service by 9 per cent., and

  963
  the capping limit by 3.3 per cent. Those figures are not targets but ceilings, and I am sure that the county council could spend well within and below them.
  The other predominant factor in the debate was the result of the recommendations of the Local Government Commission. As has been said, my right hon. Friend the Secretary of State considered the commission's report and the representations that he had received, and on 21 March last year he announced his decision. He accepted the recommendation that there should be unitary authorities for Bournemouth and Poole, but decided that the rest of the county should remain with two-tier local government.
  As my hon. Friends have pointed out, that hybrid solution was promoted by the county council itself.
  Mrs. Maddock: Will the Minister give way?
  Sir Paul Beresford: I have only about five minutes, and I have already cut my speech considerably. I shall just run through a few points.
  Mrs. Maddock: I realise that time is short, but to blame Dorset county council for what happened over local government reorganisation is amazing. It was a Government-inspired operation, and there was no agreement in Dorset among anyone—county council, district councils or Members of Parliament—about what should happen. In the end, we have all had to suffer a hybrid position that very few people wanted.
  Sir Jim Spicer: Who inspired it?
  Sir Paul Beresford: If the hon. Lady is having some problems with private grief over her own disabilities and so on, I shall leave her to struggle with it. The fact is that the hybrid solution was ultimately promoted by the county council. To my mind, that means that the county council must make it work.
  The order to make Bournemouth and Poole unitary was made on 11 July last year. All-out elections to those authorities will be held in May this year, and reorganisation will take effect on 1 April 1997.
  The county council has said that it is committed to carrying out a fundamental review of the division of functions and finances between the two tiers. As part of that service review, it proposes to delegate decision making and service delivery where appropriate, and carry out service audits jointly with the districts. It is committed to streamlining service provision in collaboration with the district and other councils. It also proposes sharing principles and objectives with the districts—for example, for trading standards and for libraries.
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  During the local government review, many local authorities made such undertakings. We made it plain that we expected local authorities not only to make such undertakings but to put them into practice.
  As the hon. Member for Christchurch said, I was at a conference on Monday at which the Local Government Management Board launched a report analysing the commitments given to the Local Government Commission during the review. The report shows that some authorities are putting their words into action and introducing many innovative improvements.
  On the other hand, it is clear that progress across England has been patchy. That is true not only of the nature and scale of improvements, but also of the range of people involved. Dorset was not one of the areas used as a case study, but there is some evidence of intentions, and we expect those intentions to be fulfilled.
  Mention has been made of costings, expenditure and the anticipated standard spending assessments of the authorities affected by reorganisation. The methodology for each service will be the same as it is now. Indicative 1996–97 SSAs will be available in May. That gives a short but physically possible time in which authorities can organise themselves.
  Of course, Government offices will be keeping watch over progress towards reorganisation date; their interest will be directed towards particular local authority services in which they have a special interest. However, it would be fair to say that we shall not see clearly how things are developing until after the elections to the unitary authorities in May. Indeed, the regulations placing powers and duties on authorities to prepare for reorganisation reserve much of the power to make policy decisions to the councillors who will be elected then.
  Apart from the Government office, the Audit Commission and the district auditors are in a unique position to see what is happening in each authority, and the Audit Commission has a statutory duty to promote efficient, effective and economic local government. Preparation for reorganisation and developing co-ordination and co-operation across the tiers form a part of the agenda.
  As authorities consider their performance, external auditors will be able to help councils assess how successfully they are working with each other and will suggest areas where improvements can be made. It is fairly obvious that my hon. Friends will also do exactly that. I encourage them to do so, because it will help decide whether their constituents are successfully served by their county councils or not. I hope that my hon. Friends will continue to put pressure on authorities, as they have done this morning.

  Swimming (Schools)
  10.59 am
  Miss Kate Hoey: I welcome the opportunity for a slightly longer debate than I had perhaps expected. Wednesday mornings are useful in that they provide time for the House to consider issues which do not necessarily hit the headlines but which are important to millions of people.
  The Under-Secretary of State for Education and Employment, the hon. Member for South-East Cambridgeshire (Mr. Paice), is probably wondering what he is doing here. I could not see swimming mentioned anywhere in his job specification. That suggests that there is a problem with responsibility for the matter. I would have liked to debate swimming generally, but there was a problem with finding the appropriate Minister. I decided that I wanted to deal mainly with swimming in schools and the attitude of local authorities to the subject, and the Under-Secretary of State for Education and Employment has been chosen to reply.
  I would have liked the Minister with responsibility for sport to be here, but he might not have been able to answer the debate because the Department for Education and Employment is responsible. The situation is unclear, and the departmental cross-responsibility shows the need for co-ordination and strategy. Nevertheless, I welcome the presence of the Under-Secretary of State for Education and Employment. In all my dealings with him, he has been generous with his time and prepared to listen to arguments.
  I wish to start by dwelling on the importance of swimming. The ability to swim combines a worthwhile and pleasurable activity with a skill that could one day save a life. Not for nothing is swimming sometimes referred to as a life skill. It is also medically advantageous to general physical and mental health and it has special benefits for people with disabilities. It is a very fine way to establish mobility and a feeling of balance and control.
  The difference between swimming and other sports is that, as well as being a superb recreational activity, the ability to swim is a critical factor in reducing the risk of accidental death by drowning. Research among all age groups has shown that the risk of drowning is more significant for non-swimmers and in the 10 to 24-year-old age group non-swimmers were three and a half times more at risk than swimmers. That may seem a somewhat obvious point, but it is worth making.
  The debate is timely, as it follows the successful Olympic swimming trials at the Ponds Forge international pool in Sheffield last weekend. I congratulate the Amateur Swimming Association and its chief executive David Sparks on the organisation of the event. The trials involved choosing not only the teams for the summer games in Atlanta but the those for the Paralympics that will follow. This was a first in British sport in that both able-bodied and disabled athletes were selected at the same event.
  Most of the 28 members of the British team for the summer Olympics are young—the youngest, a 16-year-old, is still at school. Our team is in the top 16 in the world, and I am sure that we all wish them every success.
  Mr. Peter Bottomley: My question may be slightly apart from the main thrust of the debate, but does
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  the hon. Lady agree that we should send a message to the Amateur Swimming Association and to those who help fund the British Olympic team that getting the coaches of some of our major swimmers to join the coaching team would be of great advantage? It seems odd that coaches who help swimmers to get chosen for the team and to have a chance of winning a medal are denied the opportunity to accompany those swimmers.
  Miss Hoey: The hon. Member raises an important point. Anyone involved in competitive sport realises the importance of a coach to an individual athlete. The relationship of an athlete or swimmer in the team representing their country with their coach is crucial, and I will pass on the hon. Gentleman's comment to the ASA.
  The members of the Olympic team are the stars of today, but my research suggests that there is widespread concern about what is happening in schools and about how schools are teaching and providing opportunities to swim. In the 1980s, despite the undoubted link between swimming ability and safety, many schools and education authorities had no requirement at all for schools to provide swimming lessons. Although many authorities did bear the costs of pool hire, transport and the provision of instructors, and although many schools raised enormous amounts of funding for themselves, until recently there was no legal compulsion for swimming teaching to he provided by schools.
  The three national governing bodies for swimming—the Royal Life Saving Society, the Amateur Swimming Association and the English Schools Swimming Association—became so alarmed at the trend that they formed the Swim for Life campaign, with the aim of securing the teaching of swimming by all schools. In 1988 the campaign surveyed local authorities and schools and found that more than half had no clear policy on the teaching of swimming and that more than 80 per cent. of local authorities could not meet the three basic standards for the provision of swimming lessons: the meeting of charges for the children, the setting of a minimum swimming standard and the specification of the minimum number of lessons to be provided.
  A more recent survey by the Secondary Heads Association in the late 1980s confirmed that trend and showed that there had been a further reduction in the provision of swimming lessons. The survey showed that fewer than half the 11 to 15-year-olds had any curricular swimming whatsoever. The Swim for Life campaign lobbied for a swimming requirement to be included in the physical education section of the national curriculum and in 1991 it was successful. Here I pay tribute to the hon. Member for Congleton (Mrs. Winterton), who promoted a private Member's Bill—of which I was a sponsor—to raise the awareness of the need for children to learn swimming at school.
  In response to a report by the national curriculum physical education working party, the then Secretary of State for Education—now Chancellor of the Exchequer—said:
  "I note the group's firm recommendation on swimming. This … would have serious practical implications for many schools. I shall need to consider them in the light of what you and those commenting on your report have to say about their feasibility."
  He added:
  "it is not part of the group's remit to make recommendations on the resources to be provided for PE. I would expect your recommendations to be realistically related to the general level of school funding which can reasonably be expected to be available."

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  At a conference organised by the Swim for Life campaign to discuss the resource implications of the working group recommendations, the then Sports Minister—the right hon. Member for South Ribble (Mr. Atkins)—said:
  "Our concern has to be with resources, and whether all maintained primary schools would be able to deliver swimming lessons for all pupils."
  The right hon. Gentleman at least recognised the importance of swimming, but he was unwilling to give a firmer lead on behalf of the Government. I wonder whether the Under-Secretary of State for Education and Employment who is to reply to today's debate is demonstrating his ambition to succeed his hon. Friend the Member for Harwich (Mr. Sproat) and become the latest in a long line of Conservative Sports Ministers.
  All schools have been provided with a programme of study for swimming that should be taught during key stage 2—for pupils aged seven to 11. If a school chooses to do so, the programme can be taught during key stage 1—for pupils aged five to seven. The programme holds that children should be taught to develop confidence in the water; to rest in water, float and adopt support positions; to develop a variety of means of propulsion using either arms or legs, or both; to develop effective and efficient swimming strokes on front and back; to swim competently, unaided, at least 25 metres; and to practise and understand the skills of water safety and survival. Those proposals came into effect on 1 August 1994.
  A tremendous amount of good work is going on in the teaching of swimming in the United Kingdom and we must recognise that fact. A great number of teachers and various organisations are working on improving and disseminating best practice. The Physical Education Association of Great Britain and Northern Ireland produced an in-service manual for teaching physical education, including swimming, at key stages 1 and 2 and is soon to launch a national postgraduate training programme for primary teachers who want to become curriculum specialists, in association with a network of university training providers throughout the United Kingdom. I congratulate Peter Harrison and his colleagues at the PEA on the work that they do.
  The Amateur Swimming Association rightly regards education as a vital part of the job of the national governing body for swimming and invests heavily to ensure that there is an education programme for pupils, teachers and coaches. It will be doing a lot more. It has already provided some training for 17,500 swimming teachers and coaches in 1993–94, it issues 1.5 million incentive awards per year and it became the first national governing body to introduce national vocational qualifications into teaching and coaching. Good work is going on, but without a central commitment from the Government, it will not stretch to every school in the land.
  The regional sports councils for greater London and the south-east region have adopted swimming as what they call a focus sport and will be devoting officers and resources to developing the sport in the next three years. The London regional sports council points out, however, that provision for children with disabilities is patchy and in many cases tuition is not being delivered by appropriately qualified teachers. Where children with disabilities are integrated into mainstream education, problems are often exacerbated by the fact that teachers are unaware of and unqualified to deal with the needs of
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  such children. I shall be interested to hear the Minister's comments on the situation in relation to young children with disabilities and how he feels that that aspect of swimming is working throughout the country.
  The National Union of Teachers and other teachers' unions have taken a great interest in swimming. Doug McAvoy, the general secretary of the NUT, commented:
  "There is a much heavier burden of responsibility on teachers who undertake to teach swimming or act as a lifeguard".
  Obviously, the responsibilities placed on teachers when young children take part in any activity involving risk are greater. Unfortunately, we have seen the demise of county and local authority advisers; swimming and physical education advisers of that sort no longer exist. Greater responsibility has therefore been placed on professional associations such as the PEA to provide the training.
  There seems to be a tremendous variation between how much different local education authorities and schools spend on swimming. For the year 1992–93, approximately half the LEAs in England and Wales delegated swimming budgets to schools. According to the NUT, of those LEAs which retained swimming budgets centrally, to ensure that provision was made for school swimming, the amount varied between 26p and £17.20 per pupil. That is a very big difference and I should like the Minister to comment on the variation in the cost of swimming in different parts of the country. Does he really feel that 26p is adequate? Perhaps he does. Will he also comment on the huge disparity in provision?
  The pattern is for new swimming pools to be designed as leisure pools, which seek to mimic the seaside with wave machines and water slides—fun activities and all very commendable—but according to the Sports Council only 28 pools in London meet the recommended dimensions for a learner pool. In addition, there are apparently 66 indoor pools which are adequate even if they are not quite the right length or width. Although young children enjoy leisure pools, it is difficult to learn to swim in one.
  The Institute of Swimming Teachers and Coaches—another commendable organisation—has produced a good and thorough statistical report on swimming provision in schools. I commend it to the Minister and to colleagues—I presume that the Minister will have seen it. The work done by Colin Lee, the consultant, shows that, despite the inclusion of swimming in the national curriculum, less than half the infant, junior, primary, first and middle schools that he surveyed provided swimming weekly throughout the year for any given age range. Only one in 20 of the schools provided weekly swimming for pupils over more than four years at school.
  The Amateur Swimming Association tells me that a school swimming pool in Dudley, which was recently refurbished, is not being used as the school has no funds to run the heating system. The ASA says that there are similar problems throughout the country and it is hearing more and more reports of local authorities making substantial cuts—there have been cuts in swimming in Cambridgeshire, restrictions in Derbyshire, constraints in Hertfordshire and two schools in Warrington have abandoned swimming completely. I ask the Minister whether anyone really knows how varied swimming provision is throughout the country. Whose job is it to monitor that?
  The survey of 741 schools by the Institute of Swimming Teachers and Coaches showed that in 84 per cent. of cases children had to travel so far to a pool

  969
  that some form of coach transport was necessary. Public transport was not always possible. The increasing cost of coach travel, set against ever-increasing demands on the delegated school budget under local management of schools, is having an obvious effect. When new regulations on coach travel and seat belts come into effect this year, schools which were able to fill up a coach by transporting three very young children on two full-sized adult seats may find that they need a second coach, doubling the cost and forcing the school to reconsider the position.
  While I welcome a campaign for additional safety measures in the transport of young people—there was a particularly horrific accident involving a cadet troop from my constituency several years ago—I regret that the additional costs of the safety measures may ultimately cost lives because fewer children will learn to swim. I do not want to be alarmist, but I mention that fact to see whether the Minister has thought of it and whether there is any suggestion that local authorities and schools may be able to recoup some of the extra costs that they may have to bear to transport children to go swimming because of the safety measures.
  The survey also found that in 63 per cent. of cases parents were asked to contribute to the cost of coach hire for swimming lessons. That does not happen in other countries, where it is taken as a right that, if a school provides for children to go swimming, the parents do not have to pay. A further 59 per cent. of parents covered by the survey were asked to pay in part for the swimming instruction. That is all very well in some areas of the country and, indeed, in some schools—many parents will do their utmost to ensure that their child has the opportunity to participate in many non-curricular activities—but it is wrong if parents are being asked to contribute to paying for something that is part of the national curriculum and is meant to be happening in schools, particularly primary schools.
  It is worth briefly comparing our commitment with the action of other countries. In France, a comprehensive swimming instruction programme has been matched with a drive ever since the 1960s to build hundreds of extra 25 m pools and provide excellent teacher's guides. In Germany, every school leaver will have received three years of swimming teaching at no cost to the family. In Holland, I understand that swimming lessons are offered across the board in school time for children aged seven and over with nationally-applied qualifications for swimming teachers and a standard test of swimming ability for children. In London, there are 47,000 people per swimming pool against 18,000 in Berlin and 15,000 in Paris.
  The survey's most disappointing result was that only one in five teachers or parents teaching swimming in schools had swimming teaching qualifications. How can that be allowed? How can we claim to take the teaching of swimming in schools seriously if the Government have no central plan to tackle the swimming teacher shortage? It is not enough to have people, however enthusiastic, teaching swimming classes, even if they are lifeguard trained, if they do not now know how to teach swimming and promote stroke stamina.
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  When I trained as a physical education teacher, physical education was an arduous three-year course and swimming was a very important part of it. I know how much stamina and strength are needed to qualify as a swimming teacher. The matter has not been treated seriously enough by local authority education departments or by some schools.
  Another side effect of the resource implications of Government restrictions has been that some local authorities have been forced to put their leisure centres out to contract. That is not necessarily always a bad thing, but as the balance sheet mentality takes over, more leisure centres feel the pressure to charge more to schools for lessons and to consider different sorts of clientele who can pay more for the use of the facilities. That is affecting schools and the school use of swimming pools.
  In my constituency, Steve White, a very good head of physical education at Charles Edward Brooke school, has been telling me how difficult it is to hire swimming pools even if schools have the money. There is far less opportunity to hire time in a swimming pool when it is free of other users. Children are taken to swimming pools that the public are using. That can make the proper teaching of swimming difficult.
  If the Minister is serious about ensuring that proper attention is paid to swimming in schools, we need more information. Perhaps he will agree to commission the Institute of Swimming Teachers and Coaches to carry out a nationwide study to give us the national picture.
  I am a long-time supporter of the national lottery, which has had some positive effects. To date, it has offered funding to 43 swimming applications, almost exclusively for new pool developments, out of a total of 1,027 grants across all sports. Swimming has received £42 million, which is 23 per cent. of the £179 million paid in lottery awards by the Sports Council. The average award is £970,000 per pool because of the high capital cost.
  Of the 43 successful swimming applications, only five involve school pools. That is a problem because the more schools that have their own pools, even if they are small, the more travelling costs are cut and the easier it is for schools to have swimming as a genuine part of their curriculums. I know that the Secretary of State for National Heritage is considering the problem that applications for lottery funding must have a certain amount of other money. The small number of school-related grants is partly because there have not been many applications from schools because of the various difficulties and restrictions on application. I hope that the Minister will consider that and have a word with the Secretary of State.
  I have a good new idea that would change the face of swimming in London. Hon. Members may have seen in the Evening Standard a couple of weeks ago the announcement of plans to build a lido swimming pool floating on the Thames near the House of Commons on the opposite side of the river. It would be beside Gabriel's wharf in the Waterloo area. It would be called the Thames Lido and is being promoted by the excellent Coin Street Community Builders in my constituency and has been designed by Lifschutz Davidson. It proposes not only to tackle the lack of swimming provision in the north of my constituency and the London borough of Southwark but to consider ways of making swimming imaginative and

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  interesting. It may have a roof that could move back and forth so that people can swim throughout the winter. People would have the feeling that they were swimming in the river as they would be in the river, but not in river water—not many people would want to swim in the Thames.
  I hope that the proposal will succeed. National lottery funding will be crucial, but we are clear that if it is to happen there will have to be an arrangement whereby local schools and communities will have the opportunity to use the pool to learn to swim and to have their classes. There is a dearth of swimming pools in the borough of Lambeth and across the northern part of south London.
  I have mentioned the English Schools Swimming Association, but there is another good organisation that works in London—the London Schools Swimming Association. Brenda Sullivan is its long-time secretary and it recently held an anniversary celebration that the hon. Member for Ealing, North (Mr. Greenway) and I attended. I give his apologies as he is serving on the Noise Bill Committee this morning. I am supposed to be in that Committee, too, but he has stayed there as he is promoting the Bill. I know of his interest in swimming.
  The London Schools Swimming Association does an enormous amount to maintain swimming galas and competitions, despite all the difficulties. It, too, has called attention to the shortage of pools, the insufficient training of teachers and volunteers and the growing costs of transport. On the restriction to key stage 2 of a definite requirement for swimming in the national curriculum, Brenda Sullivan comments:
  "It appears that many secondary school children do not have swimming lessons unless they have a school pool."
  We know how few schools in the maintained sector have swimming pools. It is interesting that few of the fee-paying schools for which parents pay a lot of money do not offer swimming pools—usually indoors, which is even better. The independent sector, where people are prepared to pay lots of money, regards swimming as important. It is the Government's responsibility to ensure that as many schools as possible have ready access to swimming pools.
  Brenda Sullivan stresses that more has to be done to encourage school competitions, which used to be more regular. When schools compete together in a friendly way, they learn the benefits of competition. They learn how to lose and win properly. I am afraid that such competitions no longer happen in the way that they used to. There may be many reasons for that, but crucially, schools do not have the opportunity, within the tight restrictions of curriculum and costs, to stage activities that are not clearly related to the curriculum but that give the benefits of swimming to children in a fun way.
  The London Schools Swimming Association is concerned that children are simply struggling through their 25 metres. If children cannot swim with confidence and with stamina, the lessons must continue. Does the Minister realise that in many cases, once children can swim 25 metres with difficulty, that is their last opportunity to take swimming lessons? Primary schools are relieved to have fulfilled that part of the national curriculum and, because of other restrictions, they stop providing swimming lessons. Therefore, many children do not have the opportunity to swim throughout their primary schooling.
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  There is more involved than simply the ability to swim—although that is important. Stamina and confidence while in the water are not achieved by attending the two or three lessons that will get children through their 25 metres. Roger Millward of the Swimming Teachers Association tells me
  "the general feedback from our members is that due to strict budgets swimming is severely curtailed and either not enough time has been allocated to this sport within the academic year which makes it difficult to provide a continuous, progressive teaching system, or alternatively the absolute minimum is achieved and then the lessons stop."
  Primary schools in my constituency take varying approaches to swimming. Sometimes it is only the children in their final year who receive swimming lessons and sometimes it is the top two classes. Some schools are committed to teaching swimming, despite all the difficulties, and all the children in those schools swim every week.
  Walnut Tree Walk primary school in my area is absolutely convinced of the importance of swimming—not just for safety reasons, but in view of the health aspects and the comradeship associated with a worthwhile activity that everyone enjoys—and it ensures that every child at the school takes swimming lessons every week. That imposes a massive burden on the school in terms of transport costs and time. All the children are transported by coach to the pool in Clapham, they spend only a short time in the pool and then have to travel back to the school. The activity also takes a number of teachers away from the school.
  I believe that swimming is a valuable activity and that all schools should receive assistance to allow every child—like those at Walnut Tree Walk—to take swimming lessons. At present, it is pot luck whether primary schools in my constituency and across the country are able to provide such opportunities.
  A number of problems need urgent attention. Does the Minister accept that, in view of the obviously sketchy provision of swimming teaching across the country, someone should take a definite lead? I am not quite sure which Government Department will take the lead, as the activity crosses the boundaries of responsibility for schools, local authorities and sport generally. How can schools do their job and take their responsibilities seriously if the national curriculum, and the Government's checking and monitoring of it, fail to ensure that teachers are adequately prepared? That is crucial to organising the proper teaching of swimming in our schools.
  The Physical Education Association, which seeks to maintain standards in physical education teaching, has said that a postgraduate student undertaking the general postgraduate certificate course can spend as little as 12 hours per year on the whole subject of physical education, of which swimming is just a part. The PEA recommends that all generalist primary teachers should devote a minimum of 60 hours initial teacher training to physical education. In my view that is not enough, but I am perhaps slightly biased in that regard. We must also provide career-long training for teachers by significantly increasing the funding for in-service teacher training. It is no wonder that there are reports of teachers who cannot swim conducting swimming lessons.
  Swimming is one of the main recreational activities in the United Kingdom. It is ranked second in the top 10 sports for men and women, according to the 1990 general

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  household survey. The increase in adult swimming has shifted the balance in pool use. Whereas children once outnumbered adults at swimming pools by three to one, the figure has now reached parity as more adults and fewer children swim. The sex ratio has also changed: indeed, it has been reversed: there are now three women swimming for every two men.
  Throughout the country, there is a piecemeal and arbitrary approach to swimming training. There is no national strategy. No Government Department is taking responsibility or showing leadership. The practices of local authorities and schools differ widely, and it is important to know exactly what is going on. I do not think that we have that knowledge at present. Apart from the surveys which have been crucial in raising certain issues, much of the evidence is anecdotal. Does the Minister agree that there should be an annual statement to Parliament about the status of swimming in our schools? Swimming is part of the national curriculum, but it requires different resources which are not provided in the classroom. Will the Minister comment on that?
  I urge the Government to do more to encourage all schools to provide swimming lessons. They should not try to get away with doing as little as possible, but should ensure that swimming is an important part of the teaching curriculum. It is a life-saving activity which brings enjoyment and is good for the country generally. If the Minister cannot comment on particular points that I have raised this morning, I ask him to refer them to whoever has the relevant responsibility within his Department.
  11.36 am
  Mr. Peter Bottomley: The House is indebted to the hon. Member for Vauxhall (Miss Hoey) for introducing the debate and for paying tribute to my hon. Friend the Member for Congleton (Mrs. Winterton), who has also been involved in Swim for Life. The hon. Member for Vauxhall referred to the benefits of research and the importance of enthusiasm. She made the sensible suggestion that we should debate the matter again in a year to see whether the situation had improved.
  There are one or two ways to monitor progress. First, we should examine the number of applications for new swimming pools, not just from the independent sector—where, as the hon. Lady said, swimming is considered to be important—but from private leisure companies, which make their facilities available to schools, and for lottery funding. It is clear that one of the tasks of the millennium fund should be to ensure that, within three or four years, all children can expect to have access to a swimming pool that is located a convenient distance from their school. That will not necessarily apply to the children on Rathlin island, but at least their families will introduce them to swimming. In every conurbation—whether it is a large village, small town, London borough or municipal district—people should say, "We deserve to have, and we shall work to make, a swimming pool available to us—preferably within walking distance."
  In addition to the points raised by the hon. Lady. there is the question of providing worthwhile activities for young people. More adults are swimming today because they learned to swim while they were young. Imagine what it must be like for 10-year-olds or 12-year-olds who
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  live in an inner-city or suburban area. What are their worthwhile activities after school, at weekends or during the holidays?
  I know that hon. Members too often fall into reminiscences, but swimming was almost the only thing that I was any good at when I was that age. I used to walk around the corner to the swimming pool in Chelsea Manor street. When our children were young, they were fortunate to attend a primary school whose headmaster, Mr. Mudge, was very keen on swimming and where every child learned to swim as a matter of course.
  The hon. Member for Vauxhall paid tribute to the London Schools Swimming Association. Inter-school swimming galas, which involved primary schools in the local area, meant that there was an expectation that people would not just learn to swim but would participate in competitions and lose—as in politics—and their parents would be involved with after-school swimming in addition to, rather than in substitution for, what happened during the school day. The primary school had a small and overcrowded playground, and swimming was the one way the children could participate in an activity, have fun and do well.
  When I lived in the hon. Lady's constituency, I used the swimming pools at Stockwell Manor and at Clapham Manor on the weekends, but they were not sufficient, and Elephant and Castle was quite a journey—it was necessary to go by bus or by' train. Young people deserve to have a way of letting off steam, at a cost they can afford and within a distance that it is safe for them to travel. They are the challenges. In a year's time, I would like the Minister who responds then to say how it will move forward.
  In my view, it is not only the responsibility of central Government to make it all happen; parents and teachers associations, and residents and tenants groups should put it on their agendas as well. People should be saying with pride, in public, what they have managed to achieve or what they take for granted for themselves. There is an old Malaysian poem—which I can now only remember in English—which goes like this:
  "The turtle lays a thousand eggs
  and no one is the wiser;
  The hen lays a single one
  but is a worldwide advertiser."
  If people can he as proud of their development of swimming as they are of their local theatre or their local sports stadium, swimming will get the prominence that it deserves, which will lead to progress. Obviously, the pinnacle of swimming is the Olympic games. I was glad to hear the hon. Lady refer to the selection for the Paralympics as well as for the able-bodied Olympics.
  Swimming is an activity where, in effect, people become equal—the water has the same effect on bodies whether they are fully able or disabled, whether they are elderly, young or somewhere in between. Swimming is not like a game of squash—if one is slightly better than someone else, one does not have a game and one does not have much fun. Everyone can share in swimming and it is not always competitive or for toning up one's body; it provides a whole range of activities, from the incidental to the purposeful.
  The hon. Lady will agree that swimming is the key to other sports. For example, people cannot go canoeing, rowing or sailing without being able to swim. Swimming

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  is the key in the growth of water-based sports. One need only go to the Westminster boating base at Plimlico, opposite Dolphin square, to see how young people in an inner-city area get the benefit of the leadership of Robin Turner and his team and get involved in activities that develop confidence and competence and are likely to be the key to other worthwhile activities.
  Our problem in this country is not about the people who fail in any way—they may get into trouble once or twice with the law or they may fail an examination; those things are fairly normal. Our problem is about people who never experience success—they do not start to accumulate the badges saying that they have gone from the bronze, to the silver, to the gold, from this standard to the next standard in life saving or in swimming. People who are involved in the organised chaos of youth activities—such as the woodcraft folk, the scouts, the brownies, the boys' brigade, et cetera—take it for granted that they will start to accumulate recognition for short-term achievements that become cumulative.
  Virtually all hon. Members participated in worthwhile activities when they were young and they thought it was normal to do things, whether they were paid for it or not, that lead to association with others and to the feeling that they could contribute more.
  I join the hon. Lady in paying tribute to all the teachers who take the swimming instructors' qualifications. She is right in saying that the swimming instructors organisation should have some public funding and should conduct a survey to find out what is being achieved, what proportion of schools have the required number of teachers with the qualifications and what could be done—not just in teacher training courses but in various ways—to encourage people to develop themselves and achieve the extra qualifications. Perhaps teachers should receive extra financial recognition if they go beyond the normal school day in providing leadership and training to young people.
  A number of hon. Members wish to contribute to the debate—I am glad to see that there is able representation on both Front Benches. There is much to be said about other pastimes and other sports, but swimming provides an easy opportunity for people to do something—whether organised, with friends or alone—that is healthy, gregarious and stops them from becoming couch potatoes. There is a lot to be said about video games and skills with interactive media, but it ought to be combined with swimming—which many hon. Members have taken up, whether it be at 4 Millbank or elsewhere.
  I conclude by making a positive suggestion to people around the country: they should invite their Member of Parliament and their councillors to come to their primary school and spend half a day going out with a swimming class or hearing why swimming is not possible in that school. Once Members of Parliament are exposed to that—perhaps once a year—the level of support in the House will drive forward and others will be able to share in what many of us have enjoyed, which is what the Government and the sports authorities want to achieve.
  I fear that we will not have a parliamentary swimming championship this year—I do not think I have won it for the last 10 years, but I have been in training. If hon. Members want to find a way to put it on, I challenge any Member of this House or the House of Lords and I shall see whether I can get back to the pinnacle of success that I experienced when I was young.
  11.46 am
  Mr. Tim Devlin: My contribution to the debate will have to be brief as I am serving on a Committee upstairs—I ran down to the Chamber when I saw the debate on the monitor. This is an important subject. I declare an interest—following on from the interesting contribution of my hon. Friend the Member for Eltham (Mr. Bottomley)—in that I am one of those people who started off with the bronze swimming award when I was about nine, and I then got the silver and the gold; I became an instructor for the Amateur Swimming Association; and I became an instructor and then an examiner for the Royal Life Saving Society.
  Swimming is an important part of my life now and it always has been. At one time, I swam at county level—sadly, not for Yorkshire where I now live, but for what was part of the Greater London council. The boys with whom I swam throughout my childhood enjoyed the activity. I then went on to work for the Thames rescue service in the school holidays. I have also worked as a lifeguard in the borough of Stockton-on-Tees at Thornaby swimming pool, which is in my constituency, and at Stockton swimming pool, which is just outside my constituency boundary. They are both good facilities for swimming—and they have recently been refurbished.
  Many hon. Members campaigned for swimming to be part of the national curriculum. We recognise just how important it is that every child learns to swim, not just from the point of view of personal safety—although that is critical—but from the point of view of giving young people the ability to express themselves in another way, to develop their bodies and their physiques, and to enjoy themselves. I have always found swimming to be a tremendously enjoyable experience. I still enjoy swimming and I very much enjoy taking my young nephews and nieces swimming and teaching them to do it properly, which their parents have not done—I hope that they do not read Hansard.
  It is important that children learn to swim properly. The school competitions, which were mentioned earlier, are important in developing swimming as a sport. Like everyone else in the country, I enjoy it when our athletes come back from the Olympic games with a handful of gold, silver and bronze medals—and I hope that in due course they come back from the Olympic games with some swimming medals.
  Given that swimming is in the national curriculum, it is critical that we ensure—and we have a national strategy to ensure—that it is properly taught in schools and that every child has access to a proper swimming pool.
  The hon. Member for Vauxhall (Miss Hoey) made a forceful and persuasive speech, much of which I agreed with whole-heartedly. The Government should introduce a proper strategy for the provision of swimming pools across the country so that they are within easy reach of all our schools. The Government should use more of the national lottery funds which have become available for that project. At the moment, we divide national lottery money into chunks for national heritage, the millennium, and so on, and then offer it around to various organisations. Unfortunately, because the amount raised from the national lottery has grossly exceeded our expectations, there is a significant problem throughout the country of matching funding.

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  In my constituency, we are requesting a national lottery grant to build a swimming pool at Yarm and we are having the devil's own job to assemble the money from other sources to meet the matching funding requirement. That is not just a problem for swimming pools and sports facilities; it is a problem everywhere. Another isolated example—as some London Members of Parliament are aware—is that of Sadler's Wells. The large redevelopment of the Sadler's Wells theatre in Islington will not happen unless it is able to raise some £19 million privately. The Royal Opera house has the same problem, as do all the other arts and sports facilities. They are now beating a path to the doors of the major corporate donors—the large oil companies, insurance companies, chemical companies and the banks. The same people are always being asked to hand out money on a private basis to swimming pools, theatres, playhouses, activity and outdoor centres and the whole run of worthwhile facilities that could be funded by the national lottery except that we insist that 50 per cent. of the funds have to come from the local community.
  In the northern region, we have had applications for millennium funds for all sorts of daft schemes. Last week, I was sent something called "Bridging the Millennium". Some genius had come up with the idea of building a footbridge over every river in the northern region and calling it a millennium bridge, to soak up some millennium money. That would be paid for by 50 per cent. from the lottery and 50 per cent. from local authorities, which already have great problems with their spending requirements. The suggestion is ludicrous. If we have the sort of money that means that people have to think up daft schemes to soak it up, perhaps we should return to the originating legislation and reconsider.
  Perhaps we should have a strategy for the whole country to have a swimming pool within a certain distance of so many people in the local population. That project could be funded by, say, 75 or 80 per cent. from national lottery funds. We could also consider endowing those facilities for the long term. It is no good giving a large dollop of capital to a local authority to build a swimming pool and then not giving it the money to run the facility. In Stockton-on-Tees now, we have a newly refurbished swimming pool at Thornaby in my constituency and we have recently switched over to the unitary authority of Stockton borough council, which is trying to find ways to reduce expenditure. It has turned immediately to leisure facilities as something that it is not statutorily forced to deliver; therefore, it has discussed the possibility of closing our newly refurbished swimming pool. That is absolutely crazy.
  If we are serious about delivering swimming to every part of the population, especially our young people—I hope that we are serious—we will have to rethink. I have to tell my hon. Friend the Under-Secretary of State for Education and Employment that the system is not working well at the moment.
  I fully endorse what the hon. Member for Vauxhall said about the need for school pools. School pools can often be advantageously shared with the local community. Just outside my constituency, a school in Stokesley has a large pool which is shared with the local community as a community centre for leisure and recreation. It is available out of school hours to the local population and is
  978
  extremely popular. I do not see why such a facility cannot he put in place in more communities in the north of England and in the country generally.
  Mr. Peter Bottomley: If I had known of my hon. Friend's qualifications, I would have delayed my speech because he has more expertise than I have on this subject. He has referred to Yarm and Stokesley. What are their populations? I suspect that many of us who represent inner-city areas would dream of having two or three swimming pools in our constituencies, let alone in good-sized towns. Does my hon. Friend also accept that it might make sense for lottery funding to be available for a pool partly funded by a commercial partnership if a good proportion of the pool's availability were dedicated to schools and other community groups?
  Mr. Devlin: The population of the borough of Stockton is about 175,000. It has three swimming pools—at Billingham, Stockton and Thornaby. The population of Yarm is about 12,000 and it is a large and affluent community. It also has a large rural hinterland which it serves as a market town. It used to be the northernmost market town of north Yorkshire. In a survey that we conducted recently in my constituency, one message came back loud and clear about leisure facilities—if we were to build anything for the population, they wanted more swimming pools.
  I am aware of the problems of swimming in urban areas such as Eltham and Vauxhall. I went to prep school in the constituency of my hon. Friend the Member for Eltham and we swam at the Ladywell baths in Lewisham. I do not know if that facility still exists, but we certainly enjoyed it at the time.
  We must have a strategy. As the hon. Member for Vauxhall said, we should have a formula so that everyone has a swimming pool somewhere in the vicinity. People should not have to travel large distances just to go swimming. There are private examples of just how popular an initiative that would be. I do not know if it is the same in London, but in the north of England many new leisure clubs—privately funded and developed—have sprung up. They include swimming pools, saunas, gymnasiums and jacuzzis, and people pay a subscription to use the facilities. Those clubs are usually quite expensive, but they are heavily patronised and many have waiting lists. If that is what people will use when they can afford it, we can be absolutely sure that they would use it if they could not afford it.
  We should be providing such facilities on a publicly funded basis. That would be something useful we could do with lottery money instead of looking around for schemes that people do not want. There is no demand in Teesside for either of the millennium bids that have been put forward by the borough council and the Teesside development corporation. We must identify what people want and try to provide that, rather than think up some whizzo scheme and tell people that that is what they want.
  In Teesside, we have recently developed an excellent new canoeing course in the centre of Stockton and Middlesbrough. It is the biggest white-water canoeing course in the country and is rapidly becoming the national centre for canoeing and white-water rafting. It is an entirely artificial construction and it is a wonderful facility, but it is amazing that many of the people who

  979
  could use it, including teenagers, are not equipped with the swimming skills that would enable them to rescue themselves from a difficult situation. We must try to put the horse in front of the cart, and not the other way around, when we consider this subject.
  11.58 am
  Mr. Tom Pendry: I congratulate my hon. Friend the Member for Vauxhall (Miss Hoey) on winning the ballot and raising this important subject—a topic in which she and many other hon. Members take a great interest. Those who have spoken since she made her speech will agree that she talked a great deal of common sense and asked the Minister some informed questions. I hope that he will respond to them and to the points made in the excellent speeches by the hon. Members for Eltham (Mr. Bottomley) and for Stockton, South (Mr. Devlin)—particularly the latter's point about matching lottery funding. I hope that the Minister will be sympathetic. [Interruption.] We fully understand why the hon. Member for Stockton, South must now return to his duties upstairs; I just wanted to let him know that his speech was appreciated.
  It will not require much effort to convince hon. Members who are present of the value to health of swimming. In my book it is of greater importance to physical development than almost any other sport. It exercises the whole body and is virtually free of the risks of injury. The hon. Member for Eltham eloquently stressed that point.
  One of our greatest international swimmers, Sharron Davies, drew attention to the importance of swimming when she said:
  "Swimming is one of the best sports for promoting all-round fitness, suppleness and endurance. So if you are going to start with developing some sports then maybe swimming is one that you should always put in the forefront."
  Those were wise words. It is only a pity that the Government have not been as keen in this respect as Sharron Davies or the hon. Member for Eltham.
  Many hon. Members will remember only too well the last time this issue was seriously addressed in this place. That was in 1991, when the House was considering the position of swimming in the national curriculum. For hon. Members who were not here at the time, I shall briefly outline the events that led to its statutory inclusion in the curriculum for children up to the age of 11. At the beginning of 1991 the interim report of the national curriculum working group on physical education recommended that all 11-year-olds should be able to swim 25 m and have a sound knowledge of basic water safety skills. The report concluded:
  "Swimming was too important to leave to chance and should be an entitlement for all young people under the national curriculum."
  The group reached this decision after some startling research by the Swim for Life campaign. It showed that, in the preceding three years, 200 children under the age of 15 had drowned; 80 per cent. of them could not swim. At the time, it was estimated that, with proper targeting of existing facilities and resources, it would cost the Government a paltry £5 million to teach all 10-year-olds to swim. Surely that was a small price to pay when counted against hundreds of schoolchildren's lives.
  The Government, however, were not convinced. So there began a long campaign by hon. Members of all parties—this is truly an all-party issue, as the debate has
  980
  shown—and a number of us tabled questions and motions. We introduced ten-minute Bills; we took delegations to see Ministers. Finally, the Government agreed to our minimum demands, but they also stipulated that there was no point in placing a requirement on schools which they could not meet because of financial shortcomings.
  The Government appeared to accept the need for more funding when the then sports Minister, the right hon. Member for South Ribble (Mr. Atkins), said:
  "We simply cannot impose a duty on schools which they are unable to deliver."
  Unfortunately, this is another promise on which the Government have reneged. We are left with the classic Catch-22 paradox: schools are required by law to teach swimming to a certain standard but are prevented from doing so by a lack of central funding.
  The most comprehensive research carried out since then is damning in its criticism of the state of swimming in schools. In 1994, the Institute of Swimming Teachers and Coaches published a survey of swimming in 741 primary schools. The survey found that the average time primary school children spent in the water was less than 27 minutes a week. In addition, the report found that, in almost 40 per cent. of schools, parents paid all the costs of swimming—pool hire, entrance fees, instructors' fees and so on—and that only 20 per cent. of instructors possessed a recognised swimming teaching qualification. That is a scandalous state of affairs.
  The report reached four conclusions. First, the
  "time allocation is gradually being reduced".
  Secondly,
  "current funding levels are inadequate".
  Thirdly,
  "a serious lack of suitably qualified personnel are involved in the teaching of swimming".
  Finally,
  "there is significant over-reliance on parental financing of existing provision".
  This is a damning indictment of the Government's record on swimming in schools. Learning to swim is, in effect, being privatised. Whereas once this necessary and social activity was provided free in schools by local education authorities, parents now increasingly pay for their children's swimming education out of school hours.
  I obtained my one mile certificate at school at the age of 12 or so as part of my general physical education. It is a great shame that, because of the Government's cuts, youngsters nowadays have less opportunity to complete such achievements at school.
  The Government say that they are concerned about the state of sport in schools, but where are the references to the vital role of swimming in the school curriculum in their policy statement "Raising the Game"? I could find no mention of it even though I have scoured the document many times. Labour would like more support given to swimming for children of all ages. At the moment, the statutory requirement is only to teach 11-year-olds to swim 25 m. After that, swimming becomes an optional extra. Increasingly, however, schools are treating this as a maximum requirement, so once youngsters have met the target they are under pressure to give up swimming and to concentrate on other, less costly, activities.

  981
  I recognise that there is now an opportunity to use lottery funds to build and improve swimming facilities. Like the hon. Member for Stockton, South, however, I am concerned that there is no strategic national planning of such facilities. I also echo the remarks of my hon. Friend the Member for Vauxhall in this regard. This lack has meant that certain parts of the country are well catered for, while others have no pool for miles on end.
  I would also urge the Minister to adopt a more flexible approach to lottery funding. The requirement is that a pool must be used for 40 hours a week by the local community outside school hours. I have often advocated the dual use of school facilities for the wider community, but 40 hours is a tough target to meet. Again, I urge the Minister to be more flexible.
  It will come as no surprise to hon. Members to learn that entrances to local authority pools have declined a great deal in recent years. Between 1993 and 1994 they fell by 4 per cent., the equivalent of 7 million visits. I am particularly worried that the ratio of junior to adult attendances has decreased markedly. A few years ago, it stood at about 2.5:1; now it is down to 1:1. I hope that the Minister will pay heed to what my hon. Friend the Member for Vauxhall said about that.
  The contrast with Europe could not be greater. It attaches greater priority to swimming than we do. In France, there has been an ambitious programme to build hundreds of pools. The French currently have 8,400 pools compared with our 1,200. German children leave school after receiving at least three years' swimming tuition, directly funded by the Government. Holland has a nationally applied qualification for swimming teachers and a standard test to enable teachers to assess the ability of their school children.
  The programmes run in each of these more enlightened countries are clearly paying dividends in terms of better standards, because they have adopted an integrated approach to swimming provision and national strategies of the sort for which we are calling.
  I join my hon. Friend the Member for Vauxhall and others in congratulating those who did well at Sheffield last week. I also pay tribute to the Amateur Swimming Association for all its work. It is true that there were some good performances at the Olympic trials. What came through most clearly was how far we are falling behind the rest of the world. Take James Hickman, for example. He shattered the British record for 200 m butterfly by more than 1.5 seconds, but that still leaves him ranked about sixth in the world, trailing well behind his other international competitors. In the women's section, increasingly we have to rely on more experienced swimmers to provide the backbone of our possible Olympic team. Just three of the team are under 20. If we are to nurture potential talent, we must invest in better facilities in which our young stars can train.
  If the Government were to invest more in swimming in schools, that would pay dividends both now and in the future. Not only would it contribute to saving children's lives—surely that is worth while in itself—but it would improve the health and fitness of a whole generation of our young people. Who knows, it might also go some way towards creating the future Olympic champions that we all desire.
  982
  I thank my hon. Friend the Member for Vauxhall for securing us this opportunity to discuss this important issue. I am sure that the Minister will respond positively.
  12.10 pm
  The Parliamentary Under-Secretary of State for Education and Employment (Mr. James Paice): I congratulate the hon. Member for Vauxhall (Miss Hoey) on securing a one-and-a-half-hour debate on what I hope we all agree is an important subject, particularly in sport.
  The hon. Lady referred to my presence on the Front Bench and said that it was difficult to know to which Department she should address the debate. She is right, of course, that, overall, sport is a matter for the Department of National Heritage, but as the debate is about swimming in the national curriculum, responsibility fell to my Department. There was another issue, which she rightly identified from studying my responsibilities, in that responsibility for the national curriculum falls to my noble Friend Lord Henley, who, of course, cannot reply to the debate. Hence my presence, but I shall endeavour to respond to the points that she made. I am grateful to her for her kind words, and I take them in the generous spirit of good will in which they were meant.
  The Government attach great importance to the role of sports of all kinds in schools and, indeed, in society in general. That is why—the hon. Member for Stalybridge and Hyde (Mr. Pendry) referred to this—only last summer my right hon. Friend the Prime Minister launched the sports policy statement, "Raising the Game". In his personal foreword to the statement, he made clear his firm view that one of his personal ambitions is
  "to put sport back at the heart of weekly life in every school."
  Indeed, he expressed his determination to see our great traditional sports, of which swimming is one, put firmly centre stage. I agree that physical education and sport rightly belong centre stage; but the sports policy statement goes wider than that and emphasises the importance of maximising sporting opportunity for young people in and outside formal education and the development of pathways into structured sporting activity.
  All hon. Members who have spoken—from both sides of the House—referred to swimming as a crucial sport, not just within schools but outside. I think that it was the hon. Lady who referred to the amount of time devoted to swimming; the hon. Member for Stalybridge and Hyde certainly referred to it. When my right hon. Friend launched the policy document, he stated—as one would expect, I entirely support this—that he hoped that schools would decide to devote at least two hours a week to PE and sport. One can argue that that may not be sufficient, but it is one of the issues to which schools will have to respond in addressing the needs of the national curriculum.
  As a number of hon. Members have said, many exciting initiatives are under way, and my colleagues in the Department of National Heritage are acting on many of the proposals in the statement. A number of hon. Members, particularly my hon. Friend the Member for Stockton, South (Mr. Devlin), referred to the lottery. As the House will be aware, I cannot speak from the Dispatch Box on issues relating to the national lottery, but I can assure the House that I shall draw the attention of my right hon. Friend the Secretary of State for National Heritage to the points made by hon. Members on both sides of the House about the national lottery, the issue of matching funding, and other points.

  983
  I shall take with me the point about combined education and public usage. I do not have the answer to give the hon. Member for Stalybridge and Hyde directly, but the principle of making maximum use of any facility must be right. It is ludicrous that schools' sports facilities have been restricted to just a few hours use a week and not opened up to the wider community. That is changing dramatically, partly, I believe, as a result of delegating local financial management to schools.
  Physical education is crucial to the health and well-being of every child and, of course, adult. That is why the Government took the decision to make PE part of the national curriculum, which comprises 10 subjects that are necessary to provide children with a broad balance. The importance that the Government attach to PE is demonstrated by the fact that it is one of only six subjects that must be taught throughout a child's school career.
  As hon. Members have stated—there is no point my repeating it in detail—swimming is included in the physical education section of the national curriculum. The hon. Lady read out what is required by the age of 11—I shall not repeat the details—but then concentrated on 25 m and suggested that, as soon as children could thrash their way through 25 m of water, the matter was all done and dusted.
  I must make the point that 25 m is a minimum requirement and that schools can take their pupils further. More important, I must draw the hon. Lady's attention to all the other points that are specified in the national curriculum, which she read out but then seemed to ignore. I suggest that simply being able to thrash one's way through 25 m—I am sure that we all did that at some stage in our school lives—does not mean that one has fulfilled the other criteria of the national curriculum. Developing effective and efficient swimming strokes on the front and the back is clearly different from swimming 25 m.
  Miss Hoey: Will the Minister give way?
  Mr. Paice: Very briefly.
  Miss Hoey: I appreciate the Minister's point. I emphasised 25 m because the reality is that schools consider that to be the point that allows them to get away from their responsibility, not because they want to but because of the pressure of other subjects. They feel that they have done their bit once the child can swim 25 m.
  Mr. Paice: I understand what the hon. Lady says. I hope that my comments in a few moments will be a response to her.
  In secondary schools, swimming is an optional activity in the physical education section of the national curriculum, but the revised physical education order, which came into effect in August last year, includes discrete programmes of study for swimming for pupils who choose to follow them in their secondary years. The new options provide pupils with opportunities to develop their swimming skills and to learn the principles and skills of rescue and resuscitation in water-based activities. That is a significant advance in the opportunities for swimming available to pupils. In swimming, as with all aspects of physical education, the relevant safety features are important.
  984
  As the House will be aware, schools and local education authorities have a clear duty to ensure that sufficient provision is made to enable the swimming requirements of the national curriculum to be implemented. It is for them to decide on the precise form of that provision, as it is for them to decide on how it is timetabled.
  When the requirements were first introduced, as a result of much discussion, Ministers recognised that there might be practical and financial implications. That is why their implementation was deferred by two years until 1 August 1994. That was a breathing space to enable schools and local authorities to make the necessary arrangements to provide swimming tuition. It was particularly relevant to schools in rural areas and, perhaps, in inner-city areas, which may have faced problems.
  The Government have already earmarked substantial resources for the implementation of the national curriculum. It is up to schools and local authorities to decide how to deploy their total resources in the light of local priorities and needs. The great majority of primary schools, however—more than 80 per cent.—found it possible to teach swimming before it was made compulsory. Schools should be able to find ways to meet the swimming requirement from their existing budgets. Deferring the requirement should have given them time to make the necessary arrangements.
  Teachers are expected to assess their pupils in all aspects of the national curriculum, and that includes swimming. It is for heads to ensure that teachers are properly qualified to teach the subjects they teach. Substantial guest funding is made available for the in-service training of teachers.
  The hon. Lady asked who was responsible for monitoring. The Office for Standards in Education reports on the success of schools in meeting their statutory duties as part of the inspection process.
  Mr. Peter Bottomley: Will my hon. Friend give way?
  Mr. Paice: I would rather not. I shall give way in a moment if I have time, but there are a good many points for me to respond to.
  The statutory duties to which I referred include schools' obligation to teach swimming, which is a compulsory part of the primary curriculum. When a school is found to be failing in that statutory duty, its failure will be reported and highlighted as a problem to be addressed in the action plan that it will be required to produce. In extreme cases, failure to provide part of the national curriculum could be symptomatic of a wider failure of management or leadership in the school. That is one of the factors that could contribute to its designation as a failing school. The House will be aware of the powers of the Secretary of State in such cases.
  In 1993–94—just before swimming became a compulsory requirement—Ofsted stated in its annual report that, at key stage 2, where swimming was taught, standards of achievement were often high. Pupils were confident in the water, and had acquired technical competence in swimming strokes along with a range of survival skills. In 1994–95—the first year after the introduction of the requirement—Ofsted did not identify swimming as an area of concern within national curriculum physical education, but it will continue to monitor the position, as the hon. Lady rightly requested.

  985
  The survey by professionals that a number of hon. Members have mentioned predated the national curriculum issue. I can give the hon. Lady the good news that we are ahead of her request: the Government have already embarked on a substantial survey of physical education and sport in schools. A questionnaire sent to a representative selection of 1,500 schools—twice the number questioned in the earlier survey—devotes a whole page to swimming. It asks whether the school provides tuition and where that tuition takes place; it asks about the type and size of the pool, whether it is shared and who else uses it, and whether it is an indoor or outdoor pool; it also asks about access and transport facilities, and about the qualifications of teaching staff. We have had a 70 per cent. Response—a huge response for a survey. The closing date has passed, and we hope to release the results in the near future. The size of the response has delayed our analysis somewhat.
  The hon. Lady referred to the withdrawal of local education authority funds for swimming. Since the introduction of local management of schools, some LEAs have withdrawn central funds for swimming, while others have introduced the significant variations in provision that she mentioned. It is a question of priorities. The thrust of Government policy must be to give LEAs and, through them, schools the power and responsibility to make such decisions for themselves. A dichotomy can sometimes be observed. We want schools to make the decisions, but if they or LEAs are not getting it right, the Government should step in. I do not believe that both positions can be maintained.
  Whatever happens, there is no reason why swimming should suffer. Local management of schools gives governing bodies greater discretion in the determination of their own targets and priorities, and in the meeting of educational requirements in the way most appropriate to them. LEAs can give extra allocations to schools with swimming pools, or give schools an additional allowance to reflect swimming costs, which might include travel. There is no reason why LMS should damage swimming tuition.
  Every hon. Member who has spoken has described the benefits of swimming—not just safety, although that is crucial, but the health benefits and the opportunity that swimming provides to take part in other water sports. I understand that some schools have difficulty gaining access to suitable swimming facilities—both distant rural facilities and those in the inner-city areas to which the hon. Lady and my hon. Friend the Member for Eltham (Mr. Bottomley) referred. As I have said, we delayed implementation of the original order for two years so that schools could identify suitable facilities and make arrangements to enable them to meet the requirements of the national curriculum.
  986
  I do not know whether my hon. Friend the Member for Eltham still wants to intervene, but I shall be happy to give way to him now.
  Mr. Bottomley: My hon. Friend was, in fact, wise to delay my intervention. The survey to which he referred has been widely welcomed. Will he not just announce the results in a written parliamentary answer, but place as much useful information as possible in the Library and publicise it so that people throughout the country can judge themselves against the general pattern and try to raise standards, increase effort and participation and restore the situation for which we all hoped?
  Mr. Paice: I shall discuss my hon. Friend's request with my colleagues, but I see no reason why we cannot comply with it. Let me add that I agreed with what he said in his speech about the need for communities and organisations to consider together how they can develop swimming facilities and co-ordinate the necessary bids, publicity and fund raising. Swimming is there for everyone; it should not be just for schools and local sports clubs.
  Mr. Pendry: Will the Minister stress to the Leader of the House that, in view of the House's interest in the subject, it would be a good idea to have a debate on the survey when it is completed?
  Mr. Paice: I shall draw that suggestion to my right hon. Friend's attention, but the opportunity for a debate similar to this will arise in any event.
  Both the hon. Lady and the hon. Member for Stalybridge and Hyde referred to schools' charging parents for swimming. Schools cannot charge for any activity that is either a part of the national curriculum—as swimming is—or a required part of the syllabus for a prescribed examination such as a GCSE. Schools can, however, ask parents for a voluntary contribution to the cost of swimming lessons, or ask them to undertake general fund raising for the benefit of the school. They must make it clear to parents that the contribution is a response to that request; they cannot require a contribution, nor can they exclude children from aspects of the national curriculum if parents are unwilling or unable to make that contribution.
  I have thoroughly enjoyed the debate. As the hon. Lady said, this is not my normal field of activity. I, too, have learnt much from the briefings in the past few days and from listening to her speech and those of other hon. Members. The subject of the debate is important and I hope that I have addressed many of the concerns that have been expressed. I shall certainly take away the request that the results of the survey should be widely publicised. I congratulate the hon. Lady on the way in which she addressed the subject.

  Fishermen (Essex)
  12.29 pm
  Mr. David Amess: I am certainly no fisherman. I do not have the stomach for sea fishing, and I certainly do not have the patience for fresh water fishing. But I certainly enjoy eating fish, and I recently enjoyed some wonderful skate at the Peter Boat in Leigh-on-Sea.
  I think that it is fair to say that the finest fish products in the world are to be found in Essex, and especially in Leigh-on-Sea. This is an important debate for many Essex constituents, and I am delighted to see in his place my right hon. Friend the Member for Southend, West (Mr. Channon). My hon. Friend the Member for Southend, East (Sir T. Taylor) was here earlier. My hon. Friend the Member for Castle Point (Dr. Spink) wanted to be here, but unfortunately he was called away on urgent business. Many Essex colleagues will want to read the record of the debate.
  Fish are fascinating, and over the years I have kept all types. At the moment, my wife is restricting me to keeping and breeding tropical fish, which, I am happy to report to the House, we are doing very successfully.
  I should like to concentrate on the catching of sea fish and the plight of the Essex fishermen whose livelihood depends on it. I certainly do not hold my hon. Friend the Minister in any way responsible for the problems. He and I became Members of Parliament at the same time in 1983, and much of what I have to say goes back to well beyond the time when he and I came here. I entirely accept that he is doing his best to try to come to some agreement with our European partners.
  The fundamental issue is that small is beautiful. We have only to look at shopping centres to see the way that some of our multiples have destroyed the livelihoods of little shopkeepers. In fishing, many of the larger vessels have destroyed the livelihoods of people who use small boats. All Essex Members have constituents in the industry, but Leigh-on-Sea is the nearest centre for most of us.
  As my right hon. Friend the Member for Southend, West will freely acknowledge, old Leigh is a fascinating place, with a great fishing tradition. Its efforts in the war are of particular note. Its fishing tradition was mentioned in the Domesday book, and most of its ships went to Dunkirk. There is a memorial there to the men who were lost at Dunkirk in the Renown. Cutlasses are sharpened on the stone in the magnificent St. Clement's church, whose clock is positioned so that it can be seen by seafarers all along the Thames.
  Under present arrangements, British fishermen, and in particular Essex fishermen, are not being allowed to catch enough fish: 250 kg a month of Dover sole is not enough, and does not make fishing economically viable. Dredging for aggregates is a problem off the Essex coast, and I understand that that is the responsibility of the Crown Estates.
  The most recent annual report of the Kent and Essex sea fishery committee is an excellent document. I shall concentrate on the section that deals with Leigh-on-Sea and includes Holehaven. The report states:
  "Catches of sole were maintained at a low level throughout the Winter period by vessels working the central and outer sections of the estuary. These soles, together with light catches of cod. whiting and roker, supported continued fishing effort. Vessels operating twin beam, single, double and triple otter trawls pursued the sole fishery.
  988
  Catches were initially good, gradually declining as the Summer period progressed. Some trawlers moved to working from Harwich during June, July and August where reduced quantities of week and slightly improved catches were made when weather actually permitted. Catch rates declined as Autumn progressed. By-catches of roker and plaice were gradually replaced by small quantities of cod and whiting."
  Mr. Paul Channon: My hon. Friend rightly stresses the importance of sole and other such fish. I hope that he will refer the Minister to the problems facing the cockling industry, especially the threat from Holland. That is of special concern to some of the fishermen in Leigh-on-Sea to whom my hon. Friend has referred.
  Mr. Amess: My right hon. Friend is right to draw my attention to the cockle industry in Leigh-on-Sea, whose products are famous throughout the east end of London. The report from which I am quoting makes it clear that they have also been affected during the past year. The report continues:
  "Catches were generally good, although quota restrictions limited landings to a much reduced level."
  I shall put the matter into perspective, because some colleagues might ask, "How big is the fishing industry in Essex?" The answer to that is that it is very big and of great importance to all Essex Members. Some 44 vessels are manned by 68 full-time fishermen. My right hon. Friend the Member for Southend, West, who has represented that constituency for nearly four decades, could tell the House how important it is to so many families in the town.
  There are also 24 vessels with 30 part-time seasonal fishermen, and they are also pursuing the matters that I have mentioned. The general secretary of the committee that produced the report states:
  "This has been a particularly difficult year for the majority of fishermen operating within the district. The Thames estuary has traditionally supported a large fleet of inshore trawlers. These are now being denied their major source of income as a result of a reduced share of sole quota. Diversification to other fisheries has not provided sufficient alternative income. The Winter cod fishery has not proved viable due to reduced stocks. Sprats have not been present in sufficient quantities also to provide an alternative income.
  Smaller sections of the local fishing industry have seen a better year. Fishermen have continued to explore new opportunities with particular interest in shellfish."
  My right hon. Friend the Member for Southend, West is particularly interested in that.
  The report continues:
  "Fishermen have increased effort or assessed the viability of fisheries for whelks, oysters, mussels, shrimps and, of course, cockles. The now established Thames Estuary Cockle Fishery Order and ongoing bye-law controls give enhanced protection for the future of the cockle fishery."
  We thank the Minister for that.
  Here is the rub on fish quotas:
  "Quota restrictions have again continued to impose heavily upon the local fishing industry. The traditional sole fishery, supporting the majority of vessels within this district, has suffered severe restrictions."
  I know that that is also a very important issue for my hon. Friend the Member for Falmouth and Camborne (Mr. Coe).

  989
  The report continues:
  "This has been as a result of loss of quota allocations. Prospects for 1996 look even worse with an overall reduction of 23 per cent. in sole quotas compared with the 1995 quotas.
  During 1995, over 10 metre vessels saw their sole quota reduced to an uneconomic level starting at 300 kg per vessel per month for the main period of fishing, increasing to a still low maximum of 500 kg per month during mid Summer, followed by a further decline to 350 kg per month.
  Under 10 metre vessels were able to continue fishing throughout. however this was under continued threat of an early closure. Restriction on quotas for 1996 has resulted in a total closure of the sole fishery for under 10 metre vessels until the 31st March."
  Sadly:
  "In December two West Mersea fishermen were taken to court by the Ministry of Agriculture, Fisheries and Food, for sole quota offences. They were fined and ordered to pay a total of £11,500."
  I have been informed that, only last night, action was taken against another six fishermen.
  I am indebted to the Leigh and Southend Fishermen's Association. I know that my right hon. Friend the Member for Southend, West has had a long and happy association with the members of that organisation. I am grateful for the help of the chairman, Mr. Knapp, the vice-chairman, Mr. Paul Gilson, and one of the committee members, Mr. Daryl Gobbold.
  I should like to refer the House to three documents. The first is the consultation paper on the 1996 fishing vessel decommissioning scheme, paragraph 17 of which is of particular concern to Essex fishermen. It says:
  "Since the majority of UK track record is held by POs. they are the principal beneficiaries under the current arrangements when the track record of a vessel is lost through decommissioning. If the change described above were introduced it is likely that POs would still chiefly benefit as only they or their members would be likely to wish to acquire the track records of decommissioned vessels. Under present quota management arrangements, vessels remaining in the non-sector would have no individual interest in securing track record and so the proportion of track record in the non-sector would tend to decline. If the necessary balance between the sector and the non-sector was to be maintained, it would be necessary to protect the non-sector's track record from erosion. To avoid over-complicated arrangements it is proposed that a notional amount of the track record from decommissioned vessels would be attributed to the non-sector, based on the latter's percentage of UK quotas."
  Leigh and Southend fishermen truly believe that there is discrimination against the non-sector, as is highlighted in that paragraph. I ask my hon. Friend the Minister, if he cannot reply to that concern at the end of this very short debate, to write to me on the matter. The position has to be clarified, so that non-sector vessels are put on an equal footing on quotas and track records with producer organisation vessels.
  Leigh and Southend fishermen also believe that there has been some mismanagement by quota teams between 1990 and 1991. In 1994, my right hon. Friend the Member for Southend, West asked a question of the then Minister that clearly highlights how things went wrong between 1990 and 1991. There was an excessive uptake by the larger vessels, which was detrimental to under-17 m vessels. Those amounts were used to build the track record accords of the over-17 m vessels.
  I should like to mention something for which neither the Minister nor myself can be blamed: the European Economic Community's 1970 treaty of accession, and the Command Paper of 20 October 1970. I draw the House's attention in particular to the paragraph that states:
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  "subject to certain specific conditions concerning the flag or the registration of their ships, Community fishermen must have equal access to and use of fishing grounds in maritime waters coming under the sovereignty or within the jurisdiction of Member States; whereas, however, exception to this rule may be permitted transitionally for certain types of fishing carried on by local populations whose livelihood depends principally on inshore fishing".
  This issue and today's debate are of enormous interest and importance, not only to my constituents in Basildon but to people in all the other Essex constituencies, and particularly to the constituents of my right hon. Friend the Member for Southend, West. I should like to invite my hon. Friend the Minister, if he wants further evidence of how important this matter is for Leigh and its traditions, to consult the wonderful president of the local heritage organisation, Miss Sheila Pitt-Stanley, who can tell him about the town's history. I hope that he will agree to visit Southend, West, and in particular to meet the fishermen of Leigh and Southend in the heritage centre.
  I also ask the Minister to reflect on the representations that I have made, supported by my right hon. Friend the Member for Southend, West, about how we believe that we are being discriminated against. I certainly intend to go to Brussels, with some of the fishermen, to make representations there.
  At a time when socialists are controlling Europe, I want to know what the Member of the European Parliament for Essex, in particular, is doing about this issue, because it is no good blaming Her Majesty's Government for everything. Essex county council is controlled by the socialists, as is Southend district council and Basildon district council. Europe, in particular, is controlled by the socialists. The people who represent those councils and who represent Europe have been elected, and they should be assisting me in the representations that I have drawn to the Minister's attention in this debate.
  12.48 pm
  The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Tony Baldry): I congratulate my hon. Friend the Member for Basildon (Mr. Amess) on using this debate to draw attention to the concerns of fishermen from Essex, from the Thames estuary and from adjoining areas. As he said, the issues he has raised are a matter of concern to many hon. Members, including not only my right hon. Friend the Member for Southend, West (Mr. Channon) but our many colleagues who represent constituencies around the Thames estuary.
  If it is agreeable to my right hon. Friend the Member for Southend, West, I should be delighted to visit Leigh-on-Sea. Since becoming the Minister of State, Ministry of Agriculture, Fisheries and Food in July, I have visited many ports and harbours around the country, and I should be very happy to go to Leigh and to meet the non-sector fishermen there. If I do not cover all the points raised by my hon. Friend in the time available to me, I will write to him to provide greater detail.
  When we speak about the fishing industry, there is a tendency to think in terms of the south-west—Cornwall and Devon—Humberside, Hull, Grimsby and the north-east; but there is, and always has been, an active industry in the south-east around the Thames, exploiting the resources available from the Thames estuary. Many

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  people have been involved in such fishing for several generations, and typify the independent and resolute nature of the British character.
  As my hon. Friend has said, much of the fishing activity is recorded as far back as the Domesday Book. Fishing has continued to be important in this century. My hon. Friend also quite rightly referred to the contribution that the fishing industry of the Thames estuary made at Dunkirk and elsewhere during the second world war. Those fishermen and their industry are very much an integral part of our highly complex and diverse fishing industry. To me they are as important as any other part of that industry.
  In the latter part of his speech, my hon. Friend spoke about the treaty of Rome's reference to common access to an equal resource. There never has been common access to an equal resource under the common fisheries policy, and I do not envisage that there ever will be.
  As the House will be aware, the common fisheries policy imposes a six-mile limit from our shore within which only United Kingdom vessels can fish. That includes most of the inshore fishing industry, and much of the Thames estuary fishing industry. A further limit of between six and 12 miles prohibits access to all boats except United Kingdom ones and those that have historical rights of access. We have historical rights of access into the 12-mile limits of certain other member states.
  To be honest, I do not envisage any circumstances in which we would be prepared to surrender our six or 12-mile limits. That is probably the view of other member states, because I cannot envisage any circumstances in which they would wish to give up their respective limits. Those limits are important to the inshore fishing industry.
  Reference has understandably been made to the UK's quota management arrangements and to the particular problems which local fishermen have encountered through belonging to what is known as the non-sector—that group of fishermen who do not belong to producer organisations. It may be helpful to explain what our quota management arrangements are and how they affect the non-sector.
  As the House knows, the amount of fish which can be taken from the North sea is fixed annually by the Fisheries Council, when 15 Ministers from the member states meet in December. That council takes account of scientific advice and the results of bilateral negotiations with Norway.
  Once the total allowable catches have been decided for the principal stocks—cod, whiting, haddock, saithe, plaice, sole, hake, nephrops, mackerel and herring—they are allocated among member states according to fixed percentage shares reflecting the level of fishing activity that took place in the 1970s, prior to the finalisation of the common fisheries policy. It thus follows that different stocks are allocated a different percentage.
  In the North sea, for example, we do rather well on plaice, because we have been allocated 56 per cent. of the North sea quota. We do lamentably poorly on sole, however, having been allocated 4 per cent. of the quota. That is one of the reasons why that stock is under such pressure.
  From time to time, representatives of the industry consider whether we would be wise to revisit the issue of stability and the way in which the percentages are
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  allocated. It is fair to say that the United Kingdom fishing industry has expressed to me the opinion that it did pretty well out of the relative stability regime and the consequent divisions of quotas. Our quotas were good for Scotland and much of the north coast. Concern has been expressed that, if we were to revisit those quotas, we would not do so well. I recognise that that means, of course, that, in certain areas, we have been allocated lamentably small quotas.
  Once the quotas have been fixed, it becomes the responsibility of each member state to manage its own quota allocation and to ensure that they are not overfished.
  Within the UK we have sought to devise arrangements that are fair and equitable, and to encourage fishermen, through producer organisations where appropriate, to take on day-to-day responsibility for the management of quota allocations. Each year, we divide the UK's quotas among three groups of fishermen—the producer organisations, the non-sector, representing vessels whose owners are not members of producer organisations—within that group comes many of the fishermen to whom my hon. Friend referred—and the under-10 m fleet. Those quotas are allocated in proportion to the aggregated catch that each group makes over the three previous years.
  Where allocations are made to a producer organisation, it is then responsible for sharing quota between its members and to ensure that they do not overfish the producer organisation's collective entitlement. The quotas for the non-sector are managed by the Fisheries Departments in close consultation with the industry. That involves setting monthly catch limits that take account of seasonal variations in fishing activity. Those limits are set at levels that ensure that fisheries remain open throughout the year, so that fishermen have the opportunity to fish them. Monthly catch limits are not set for the under-10 m fleet, and once the quota allocation for any stock is taken, further landings are prohibited.
  Those management arrangements are reviewed annually with representatives of all sides of the industry. It is fair to say that, in the past eight years, many fishermen, notably the more active, have opted to join or form producer organisations. Today, those organisations account for more than 90 per cent. of the uptake of UK quota.
  At the same time, the quotas available to fishermen remaining in the non-sector have inevitably contracted. That, along with declining stocks and increasing fishing effort, has led to a general tightening of monthly catch limits. I am conscious of that, and I have made it clear to hon. Friends that one of my great concerns is to work out means within the existing parameters of the common fisheries policy to give more help to the non-producer organisation sector.
  My hon. Friend spoke about what happens to the track records of boats when they are decommissioned. That is one of the issues that I am considering. I would, however, point out that a number of important steps have already been taken to safeguard the position of fishermen who do not belong to producer organisations.
  The quota allocations for fishermen with vessels under 10 m have been underpinned since 1994. That means that those fishermen now receive a guaranteed minimum share of the UK's quota irrespective of whether they have been able to catch their full entitlement because, for example, of bad weather or fish stocks failing to turn up on inshore

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  grounds. That underpinning has been extended to the non-sector allocations for North sea cod and sole, two of the stocks of major interest to fishermen in the Thames estuary. We have also insisted that all producer organisations wishing to manage quota allocations must do so for all stocks.
  I am conscious of the importance of the sole fishery and the concerns that monthly catch limits are not sufficient to maintain the viability of fishermen within the Thames estuary. I appreciate those concerns, but they must be put into perspective.
  As I have said, the UK share of the TAC sole quota is, and has always been, low. It is doubtful that we shall ever secure sufficient quota to satisfy the aspirations of our fishermen. Secondly, despite the claims that are made, our records show that, in the past, few fisherman caught significantly more sole than they do now. Thirdly, sole account for less than one quarter of the value of the total fish catch landed into Essex ports. For example, in 1994, cod, bass, plaice, sprat, skate and rays also made important contributions to the earnings of Essex fishermen.
  I am aware that exceptionally good catches of sole have been reported this year. According to the advice I have received from scientists, that is not indicative of exceptionally large stocks of North sea sole: it is due to the unusually low temperatures throughout February, which drove the sole into warmer deep water pockets, where their concentrated numbers and near-moribund state made them easy to catch.
  I also appreciate that fishermen around the Essex coast have other concerns—for example, the effects of aggregate dredging. One must recognise that marine aggregates make a crucial contribution to overall supply, particularly to the south-east, including Essex, where alternative materials are not readily available. They are particularly important for soft sea defences. I share, however, fishermen's concerns about the large number of applications for new dredging areas and I will not give a positive view under the Government's new procedure on any application unless I am satisfied that the marine environment and commercial fishing operations in the area can be adequately safeguarded. I would usually expect organisations to surrender licences for new licences that they take up.
  I am conscious that, in the time available to me, I have not been able to cover in detail all the points that my hon. Friend has raised—in relation to the cockle fishery and prosecutions, among others. I shall gladly write to him and to other hon. Friends who have attended the debate to deal with those points in greater detail.

  Buckley Hall Prison
  12.59 pm
  Ms Liz Lynne: Buckley Hall prison was opened in my constituency of Rochdale on 14 December 1994. It is a male category C prison. By the end of January this year, it had 339 inmates. It is privately run by Group 4, on a five-year contract. The original contract to run the prison was worth £33 million.
  I and many of my constituents supported a prison coming to Rochdale, mainly because we wanted jobs to come into the region. I would have preferred the Prison Service to run it. When the contract was put out to tender, I would have preferred the in-house bid to win, but it did not and Group 4 won the contract. The reason for this debate, however, is not to talk about whether privately run or publicly run prisons are best—I did not ask for the debate because of that. All I am concerned about is the worrying incidents at the prison that have been reported to me. As Member of Parliament for Rochdale, I have an obligation to investigate.
  The more information I gained, the more worried I became. That is why I tabled a number of written questions, from which I found out that 10 prisoners—although the number is now nine—were given authorised leave and were still on the run. They are not petty criminals: they are people convicted of wounding, conspiracy to rob or burglary.
  It is extremely worrying that the problem is far worse at Buckley Hall than at other prisons. The average for such incidents at other male category C prisons is 1.6. It causes concern if even one prisoner does not return, but when nearly 10 times that number do not do so, the alarm bells begin to sound. I should like the Minister to tell me today how many prisoners from other category C prisons have been on authorised leave and did not return. Thirty Buckley Hall prisoners overall did not return, of whom 21 have either handed themselves in or been captured.
  There have been three unsuccessful escape attempts from Buckley Hall prison. For other male category C prisons, the average is 1.6. It appears from the written answers that I have received that Buckley Hall prison is understaffed. In November, I visited the prison with my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), the Liberal Democrat spokesman on prisons. He and I and a member of the prison staff went to one of the accommodation blocks. I stood there while prisoners had free access to table tennis tables and free association.
  I was extremely worried because I could see no prison officer around. I asked that member of staff where the prison officers were. He said that there was one on the corridors above. I was worried that, if I could not see that officer, obviously, he could not see what was happening below him, so anything could happen if prison staff generally had a blind spot in that area of the accommodation block.
  As the Minister is aware, the answers that I have received show that Buckley Hall prison has one officer per 3.7 inmates and other category C prisons have one officer per 2.7 inmates. It was explained that the difference lay in the fact that there were different ways of defining prison officers. I would be happy if the Minister reassured me about that. Even if that is the case, my constituents and I

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  need assurances that the number of prison officers on each shift, in each block and on each wing is the same at Buckley Hall as at other male category C prisons.
  As the Minister knows, I have received all that information from written answers. Another reply concerned assaults on staff in 1995. For the first two months of this year, the position is a little better, but the figure for Buckley Hall was 7.1 per cent. compared with 2.5 per cent. for other category C prisons. My most recent written question involved concerted indiscipline. From 14 December 1994 to 20 March 1996, the number of incidents at Buckley Hall totalled seven compared with 0.6 at other category prisons.
  Those statistics are worrying by themselves, but I have received many more disturbing details. A prisoner got out of the prison with visitors and was recaptured in the car park. On Friday, I was told by people at the prison how wonderful it was that he had been recaptured, but he should not have been allowed out in the first place. I want to know how a prisoner could go out with visitors and be recaptured only in the car park. He should not have been allowed to reach the car park.
  On 19 February, a 22-year-old serving two and a half years for burglary escaped over the prison fence. An alarm went off, but I was told that prison staff did not know that a prisoner was escaping because of strong winds. That is not good enough.
  In the same week, an allegation was made that a prisoner was having an affair with a prison officer outside the prison. The prisoner had been given permission to go into town or further afield to Oldham, to train with Oldham rugby league club to try to get a job after he had served his sentence. The police investigated, the prisoner was transferred and the officer resigned. If that had been just an isolated incident, we might think, "That may happen in other prisons," but it is not.
  Buckley Hall has an appalling record on smuggling, especially drug smuggling. I know that it is a problem nationwide and that we must do something about the whole prison system, to stop drugs getting into prisons.
  Mr. Geoffrey Clifton-Brown: Will the hon. Lady give way?
  Ms Lynne: No. I do not have much time.
  Prisoners and visitors go to great lengths to smuggle in items, especially drugs. Prisoners on authorised leave swallow balloons. That is a well-known practice, not just in Buckley Hall, but in prisons throughout the country, whether they are publicly or privately run. I have heard that prisoners are scared to return to Buckley Hall. I appreciate that drug smuggling is difficult to stop, but most of it is done by throwing packages over the fence.
  I welcome the moves being made and the fact that the prisoners will not be allowed access to certain areas near the prison fence and that perimeter fences will be strengthened in particular areas, but why has it taken so long? It has taken 15 months to do that. Why was not additional fencing built into the plans when they were drawn up?
  There is a massive problem with drug taking. I have received several letters from prisoners and given copies to the Minister. For obvious reasons, I have taken the names out, but one ex-prisoner at Buckley Hall asks me to consider the following:
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  "An inmate climbs on the hospital roof to protest at being refused a home leave, after much skilful negotiation it is decided his home leave application will be fully supported by the management if he comes down, he did and went on home leave the following day, duly returned, and absconded while on an escorted day out a few weeks later."
  The same prisoner also says:
  "In the recent figures I noted from the radio, 10 inmates had failed to return from home leave"—
  as I said, the figure is now nine—
  "in a two year period. I am therefore sure, having spent 10 months at Buckley Hall, that these figures must contain people who I had come into contact with, like the lad who was in the next cell to me who made the choice not to return to Buckley Hall from home leave. This was he says due to the fact they refused to help him to come off heroin. The figures must also contain at least two inmates with whom I had personal contact. They could not return from home leave unless they could meet their heroin debts within the prison of £250 and £600."
  He goes on:
  "Buckley Hall is a time-bomb ticking away and releasing back into society people with far greater problems than which they already had. People who have no doubt come to the stark realisation that money conquers all. Buckley Hall must have a full investigation to safeguard all."
  Another ex-prisoner says in a letter:
  "there was no prison regime at all at Buckley Hall … The majority of inmates take heroin there … The majority of drugs and booze gets thrown over the fence of a night."
  He says that he has witnessed three escape attempts,
  "all unsuccessful, but only through sheer bad luck on the prisoners' side."
  He also claims that in August the prison hospital unit was broken into and all the drugs taken. I understand that that is correct; I have received confirmation of it. I also understand that no drugs were recovered. Will the Minister tell me whether that is true? I also understand from two different sources that one prisoner overdosed on those drugs and from another source that two prisoners overdosed on those drugs. Will the Minister confirm or deny that today?
  It is also claimed that 120 door handles were broken off cell doors. One prison officer was apparently so worried that he contacted my local newspaper, the Rochdale Observer, and was quoted as saying that there was a major drugs problem and that 95 per cent. of prisoners on one wing were using smack. He said that, because of mandatory testing, prisoners had gone from cannabis to hard drugs, because cannabis stayed in the body longer. He told the paper that two Buckley Hall prisoners had given themselves up at Strangeways because they feared being returned to Buckley Hall. That is confirmation of what the prisoners have told me. The prisoners who are bullied, the officer said, are shipped out, not the bullies. Indeed, I have been told that the prison relies on the bullies to keep the lid on everything. Will the Minister comment on that?
  The prison officer also said that one officer had his jaw broken and that a second had had four stitches because his eye had been slashed. The article continued:
  "We don't fear for a major riot, most officers want a major riot to close Buckley Hall down … It is a dangerous prison to work in".
  I do not know how true any of those allegations are; I have no idea. My duty as a Member of Parliament is to bring such matters to the House's attention. Prisoners have written to me, and I have received information

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  from prison officers and other sources. I also heard from one source that prisoners who were detailed to clean up outside the prison on a regular basis slipped off for a drink in the town. Will the Minister confirm or deny that?
  The list of events is disturbing. I know from the Minister's response to an oral question that I asked her, that she takes the subject very seriously. I am not attacking Buckley Hall prison because—as the Minister is well aware—it is privately run. It is immaterial whether it is privately or publicly run. I am concerned about the running of it. Regardless of who runs it, my constituents have a right to be reassured about security measures. I am therefore asking today for a full public inquiry into the prison.
  Is Buckley Hall properly staffed? Are prison officers trained well enough? Are junior prison officers properly supervised? Why was the prison fence inadequate? Who was responsible for its design? Who makes decisions on authorised leave? What has gone wrong with Buckley Hall prison? I want to know the answer to this specific question. How has the prison performed in official assessment? We need to know the answers to those questions today. Is it true that Buckley Hall has been financially penalised because of bad reports? We need answers as a matter of urgency. As one prisoner said, Buckley Hall is a time-bomb ticking away. There is no time to lose.
  1.15 pm
  The Minister of State, Home Office (Miss Ann Widdecombe): Although I congratulate the hon. Member for Rochdale (Ms Lynne) on obtaining the debate, I am somewhat disappointed by her tone. I was not present for her introductory remarks, for which I apologised in advance to the hon. Lady and to you, Mr. Deputy Speaker. I was in Standing Committee B and could not be in the Chamber at 1 o'clock. I do not therefore know whether she paid tribute to Buckley Hall prison staff and their efforts. I do know, however, that since becoming a Minister with responsibility for prisons, I have become very conscious of the huge amount of bashing of public sector prisons, private sector prisons and the Prison Service in general, and of the fact that at the same time people totally fail to recognise achievements.
  It is quite right that hon. Members should bring to the attention of the House criticisms and serious concerns, to which they demand ministerial responses. I do not have a difficulty with that, but it should be done in the context of wider achievements, and the good should be acknowledged with the bad. I say that for a good reason. Prison officers, whether in the private or public sector, have tremendously hard jobs, which require much dedication, courage and skill. It is totally unfair that they should be consistently demoralised by an endless flow of criticism that does not at the same time recognise their efforts.
  I should like therefore to pay tribute to the staff at Buckley Hall, who are trying their best, and I hope that I shall have time to pay tribute to some of their achievements in comparison with other prisons in that group, to show that the situation is not quite as bad as has been suggested.
  Mr. Clifton-Brown: Will my hon. Friend confirm that all the prison staff at that privately run prison have been
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  certified by the Home Office? Will she also confirm that, on a broad range of indicators, that private prison compares very favourably with a similar category C prison in the state service, and that it is costing the public purse 25 per cent. less to run than an equivalent state prison?
  Miss Widdecombe: I can confirm all that. I suspect that many of the staff have not only been certified by the Home Office, but are constituents of the hon. Member for Rochdale, and I am sure that they will be most interested to hear what she has been saying about them and the way in which they run their prison.
  Opening a new prison is very challenging. There are always teething troubles with plant and buildings, but that is nothing compared with a prisoner population that is intent from day one on testing the system. For example, it is quite common for a new prison to have a high assault rate when it first opens, and for the level to fall as the regime settles. That has happened at Doncaster and we have no reason to suppose that the same will not be true of Buckley Hall, which has, after all, been fully operational only since June.
  Secondly, we need to recognise that publicity from the media inevitably concentrates more on early failures than on subsequent successes. It is not only Buckley Hall that has attracted negative, distorted and often inaccurate treatment, but the contractually managed prisons generally. Only last week Her Majesty's chief inspector of prisons, who is not known for being backward when it comes to criticism, said that the press had given Doncaster prison
  "a very very unfair reputation".
  Indeed, he described some of the coverage as "absolute nonsense." Like him. I think that it is time to be positive about the real achievements of the contractually managed prisons as examples of good practice and value for money.
  Ms Lynne: What about Buckley Hall?
  Miss Widdecombe: Indeed. The rapid construction of Buckley Hall by the Prison Service's own construction organisation was a tremendous achievement. Permanent accommodation for 350 inmates was made available within 10 months of construction starting. Before that, 90 prisoners had been housed in temporary cells located in what are now the workshops. Why? Because the alternative was police cells.
  However, in bringing prisoners into what was still partly a building site, we made extra demands on the contractor, and certainly on newly recruited prisoner custody officers. I am grateful for the way in which Group 4 helped us to avoid a return to the prolonged use of police cells in the north-west.
  My fourth point is also obvious, but it needs recognition. It is that most of the staff are new to prison work. They are nearly all local people. About 90 per cent. of them have been recruited locally, and the new prison has created 150 jobs. I had hoped that the hon. Member for Rochdale would join me in paying tribute to the dedication and thoughtfulness that the staff have brought to their new work.
  My last general point is that the hon. Lady is not alone in taking a close interest in the initial period of operations at Buckley Hall. During the period from November to

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  January, the Prison Service undertook a contract audit. The purpose of that was to review progress since the opening of the prison in November 1994. In particular, the auditors were charged to assess overall security and control.
  The Prison Service planned to identify any steps that would need to be discussed with Group 4 management with a view to consolidating and building on what had already been achieved to date, to monitor audit compliance and to establish whether the contract was being complied with in full. From all that, only two improvement notices, covering workshop places and sentence plans, were issued. Those matters were remedied in what the Prison Service judged to be a satisfactory manner, and it was also content with Group 4's plans for the next phase of the prison's operational life.
  That is because, in addition to responding to points that the Prison Service raised, Group 4 had done its own internal management review of Buckley Hall, resulting in an action plan to strengthen local management, increase the supervision of staff and expand and enhance staff training.
  The hon. Lady made comparisons between Buckley Hall and the average performance of other category C male training prisons. I want to spend some time on that subject. I pay tribute to the hon. Lady's persistence in tabling a long stream of parliamentary questions, but such comparisons are not valid. Male category C prisons cover a wide range of prisons and prisoner populations, ranging from hutted accommodation converted from former RAF bases and former open prisons—for example, Haverigg and Ashwell—to other prisons with cellular accommodation built specifically to category C standards, with a secure wall—Risley, for instance.
  For the purpose of comparison, therefore, we take the group of category C male training prisons to which Buckley Hall most naturally belongs. Those are prisons with good control capability, based on judgments about the ease of supervision, the internal zoning within the prison, the site size, whether buildings are spread out or compact, and special programmes.
  The prisons most easily comparable are Risley, Coldingley, Stocken, Lancaster, Camp Hill and Wealstun. I stress that in addition, any assessment of relative performance needs to take account of the newness of the prison and the fact that most staff at Buckley Hall were on a steep learning curve.
  Taking the Prison Service key performance indicators, the first comparator is the number of escapes from custody—defined as no recapture within 15 minutes. During 1995–96, of that group, Coldingley, Risley and Stocken have had two escapes to date. Buckley Hall and the closed part of Wealstun had one such escape. Camp Hill and Lancaster Castle had none.
  Another comparator is the number of assaults. Any prison is likely to experience an above-average rate of assaults during its initial period. As the hon. Lady knows from a reply that I gave her recently, the rate of assaults against staff in 1995 was 7.11 per cent., and in January 1996 3.5 per cent., compared with overall averages for all category C prisons of 2.7 per cent. and 2.9 per cent. respectively.
  I shall now use the proper comparator group. Using the Prison Service's KPIs—key performance indicators—which record the average percentage of average
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  population for all assaults against both prisoners and staff, for Buckley Hall the rate is 8.8 per cent. In the comparable category C group, Risley considerably exceeds that, at 15.6 per cent., and another prison, which has been in operation for many years and is therefore not on a steep learning curve, Camp Hill prison, rates 6.8 per cent.
  I am a great believer in attempting to use statistics fairly and sensibly, so I should add that the Risley figure relates to a prison with separate male and female units, the latter operating as a local prison with a high number of disturbed and disruptive prisoners.
  As for regime hours at Buckley, as I have already mentioned, the prison was handicapped when it opened because the workshops were used to house temporary cells. Numbers were built up on site, but the workshops were converted back for their intended use, and therefore for constructive activity, only at the end of July. By last Friday, the average regime hours figure at Buckley Hall for the preceding week was 29. In the comparator group, the figure for Camp Hill was 29.4, for Risley 28.7, for Coldingley 27.3 and for Lancaster Castle 26.1.
  One of the other issues raised by the hon. Lady was the escape on 19 February of Philip Buckley—a most unfortunate name, in the circumstances—who was serving a sentence of two and a half years for burglary. That incident was investigated by the Prison Service, and we concluded that a number of factors had contributed to the escape.
  Group 4 was warned that the Prison Service intended to impose a financial remedy for failure to maintain security standards. In the event, Group 4, having reassessed physical security, is investing in the provision of additional security measures, including fencing and security cameras. I understand that that was explained to the hon. Lady when she visited the prison recently.
  I fully share the hon. Lady's concern about the smuggling of illicit drugs—and, although she did not stress that aspect, alcohol—into the prison. Who would not share that concern? We face the same problem throughout the prison estate, and I am satisfied that Buckley Hall's management is tackling it with rigour.
  Every person visiting an inmate is searched. A drugs dog is available. In addition, visitors are requested to leave hand luggage in locked compartments in the reception area and, unusually for a category C prison, Group 4 has installed an X-ray portal through which visitors must pass before entering the prison. Cameras have been installed in the visits room for monitoring and, if necessary, for collecting evidence of attempts to pass on drugs or alcohol.
  In order to restrict illicit access to drugs, changes have also been made in the prison pharmacy. As the hon. Lady said, a quantity of drugs was stolen following a break-in during the first few days of August, shortly after the main accommodation had been brought into use. The drugs had been properly stored in a regulation steel drugs cabinet, and the lock was appropriate. However, the medical building itself proved to be insufficiently secure. Following that incident, the Prison Service improved physical security and Group 4 introduced new dispensing arrangements, to ensure no medicine capable of misuse was stored near inmate accommodation overnight.
  I do not wish to spend too much more time on the details of the debate, because I want to end with some general observations. As I said at the beginning, Prison Service

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  staff, in both the public and the private sector, have a difficult job to do. The Prison Service has a remarkable record of achievement since it became an agency—in the reduction in the number of escapes, for example, which at the end of last year amounted to 83 per cent.
  I do not believe for one moment that if any private sector company had made such an improvement in its performance, people would denigrate it in such a fashion. I believe that we should pay tremendous tribute to the Prison Service—
  Ms Lynne: The Minister has not answered my questions in detail.
  Miss Widdecombe: From a sedentary position, the hon. Member for Rochdale is complaining that I did not answer all her questions. She asked me about drugs, about security, and about assaults, and I have addressed all those questions. If there is any question that I have not answered to her satisfaction, she has a pen and paper, and she knows very well that I shall always give her the courtesy of a reply.

  Dental Care
  1.29 pm
  Mr. Geoffrey Clifton-Brown: I am grateful for the opportunity to raise the subject of dental care. It is a tribute to my hon. Friend the Minister of State that when I discussed with him the possibility of raising the matter on the Adjournment, he readily agreed. I am grateful to him for that, and I welcome him to the Front Bench today.
  The debate has three purposes: first, to highlight one highly unsatisfactory constituency case of unnecessary and unsatisfactory dental treatment; secondly, to reveal the shortcomings of the way in which the General Dental Council—the dentists' regulatory body—can deal with such cases; and, thirdly, to demonstrate the shortage of dentists providing NHS treatment in Gloucestershire.
  I am well aware of the vast annual growth in state spending on NHS dental services. Since 1979, there has been a 69 per cent. increase in real terms in spending, reaching £1.3 billion in 1992–93. The problem is that, as in other areas of the NHS, technology has moved on at such a rate that ever more complex dental treatments are possible. People's expectations are higher than ever before, and some new treatments are extremely costly for the NHS to provide. Everyone should be entitled to receive reasonable treatment under the NHS, however, and most people should now, with correct dental care, expect to keep their real teeth for most of their lives.
  Before I outline the facts relating to the case of my constituent, Mrs. Gee, I should state that I went to great lengths to check the facts, including corresponding with the dentist concerned and the independent consultant who reviewed the work. Mrs. Gee came to see me at the House so that I was able to question her face to face. I am convinced that there are a small minority of rogue dentists who undertake treatment that is unnecessary, or who augment basic treatment merely to earn increased fees. Of course, such cases are difficult to prove.
  Mrs. Gee's case began in October 1993 when, after some minor dental treatment involving a filling costing only £55, Mr. Scott-Holeyman of Moreton-in-Marsh, suggested that some additional dental work to replace an existing denture would be ideal. A new bridge would be fitted, and root treatment carried out. It was explained that the work would cost £1,500 and that having the work done privately would ensure top-quality bridgework with well-fitting crowns and pure gold posts. Mrs. Gee took the word of the dentist that the work was necessary and would improve her quality of life. In reality, as she was to find out later, the work was possibly unnecessary and could offer only a marginal advantage over the existing denture.
  My constituent was in constant pain from the bridge as soon as it was fitted. She endured 17 visits to the dentist—totalling more than 30 hours—where, on each occasion, minor adjustments were made, such as grinding down the teeth. The bridge, however, remained in place. Eventually she asked for a second opinion from the dentist's partner. It became clear from using a mould that the bite was seriously wrong, with the top and bottom teeth failing to meet.
  To this day, the dentist who treated Mrs. Gee cannot accept that his treatment was unsatisfactory. In a letter to me dated 28 February 1996, he stated:

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  "I am unsure about exactly what it is I am supposed to have done."
  But the evidence is clear, because Mrs. Gee immediately sought a report from a consultant in restorative dentistry, which stated that a fixed bridge of the type that was used may not have been appropriate, and that the pre-existing removable denture may well have been better in the circumstances.
  Mrs. Gee finally went to have restorative work done at Birmingham dental hospital more than a year after the original treatment, and the bridge was removed. Five teeth were affected by the attempted bridge work, two of which have been lost and the remaining three extensively restored. The major point is that, two years later, remedial dental treatment continues at the taxpayer's expense in the NHS hospital at Birmingham. Mrs. Gee has had to endure 28 separate and very painful visits to the dental hospital to put right work that may not have been necessary in the first place.
  On my constituent's behalf, I took up the case with the General Dental Council which in theory has a remit to regulate the profession under the Dentists Act 1984. The GDC investigated Mrs. Gee's complaint, but concluded that there was not a prima facie case of serious professional misconduct by the dentist. The GDC can suspend a dentist only when serious professional misconduct has been proved. Although I am not a lawyer, that would amount in my opinion to something as serious as pulling out all of someone's teeth, or rape or a similar act. My constituent underwent unsatisfactory treatment, but it did not amount to serious professional misconduct and—under its present constitution—the GDC had no power to act.
  Court action would be difficult without access to all the documents relating to Mrs. Gee's treatment. There are double standards on the part of the GDC, because it is reluctant to co-operate with her since completing its own investigation. Mrs. Gee supplied a copy of her own report and an assessment of the original treatment before the restorative work commenced for the GDC disciplinary hearing to which I referred. The GDC happily passed that report on to the dentist so that it could be used in his own defence. Mrs. Gee, however, cannot get from the Birmingham dental hospital a document relating to her own treatment that would form a central part of any court action. That is unsatisfactory, and I hope that my hon. Friend the Minister will request a copy of the report from Birmingham dental hospital so that he can satisfy himself as to the seriousness of the case.
  The House would be entitled to ask why the dental profession is dragging its feet. A sceptic might say that the dental profession is aware of the three-year time limit within which medical negligence cases must be brought. This period is fast approaching its end. But why must we have this limit at all? The Minister will know for example, that negligence claims against employers can take much longer than three years to come to court, and can take six or more years to do so.
  It has been important to highlight the issues surrounding Mrs. Gee's case because they highlight the shortcomings of the GDC's regulatory structure. All treatment under the NHS is subject to a complaints procedure that is not open to private dentists. Therefore, people such as Mrs. Gee have no redress under the NHS. It is high time that the GDC modernised its
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  procedures in line with those adopted for doctors by the General Medical Council. Dentists who fall short of the serious professional misconduct category could then be disciplined for persistent professional misconduct. In particular, there must be powers to suspend dentists temporarily while they undergo re-training and to ensure that all dentists undergo continual professional development throughout their careers. That happens in many other professions, including my own—chartered surveying.
  I urge my hon. Friend to initiate an urgent consultation with the dental profession to implement these changes and all the changes recommended in the GDC consultation paper put out in November 1995, with a view to legislation along the lines of the Medical (Professional Performance) Act 1995 which will give the GMC powers to regulate GPs from next year. The people of this country need to be reassured on this matter.
  Action is vital because the provision of NHS dentistry in the rural areas of Gloucestershire is unsatisfactory. My constituency has one of the highest proportions of NHS dentists either opting out entirely of providing NHS treatment or merely treating children and those with exemption certificates. The health authority has attempted to alleviate the situation by employing salaried dental staff in local clinics. But the health authority provision lags behind potential local demand by a long way. For example, there is only one NHS salaried dentist in the Tewkesbury area every other Friday from 9 am to 1 pm and from 2 pm to 5 pm—this, Mr. Deputy Speaker, to serve a population of about 14,000.
  How can the situation be improved? The health authority is keen to have at least one extra salaried post, but its hands are tied by the national Department of Health rules on salary levels which mean that the health authority is unable to employ the extra salaried dentists that it needs.
  Gloucestershire health authority has unfilled posts because it cannot attract dentists. Health authorities should be given more flexibility in, for example, the fringe benefits that they can offer salaried dentists, such as moving expenses and increased housing allowance, to fill unfilled posts. Ultimately, there are no other mechanisms whereby the NHS can provide NHS dentistry, if there are unfilled posts.
  I hope that there will be action as a result of this debate. First, I look to the Minister to demand the document from the Birmingham dental hospital which catalogues Mrs. Gee's ordeal and is central to her being able to pursue successful legal action.
  Secondly, I look to the Minister for action to ensure that the General Dental Council quickly follows the route taken by the General Medical Council to deal with rogue dentists who exploit private and, indeed, NHS patients. Finally, I hope that the Minister will look again at the regulations governing salaried NHS dental staff to find out what can be done to ensure that the vacant posts are filled by allowing health authorities greater flexibility in the allowances that they can offer to attract and retain dental staff.
  I would like to think that, in raising this matter today on behalf of my constituents, the dental situation in Gloucestershire will improve rapidly. I am thankful for the opportunity to raise the matter.
  1.40 pm
  The Minister for Health (Mr. Gerald Malone): First, I am pleased to be able to respond to the particular and the general issues that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) raised and to congratulate him on using one of the most powerful tools we have to raise the complaints of individual constituents and their concerns in this forum.
  Since last November, my hon. Friend has been working hard on Mrs. Gee's behalf to ensure that the problems that she has had following her dental treatment are properly addressed. I know too that the case raises wider issues, which will be of interest to all patients when they make choices about their dental health care.
  My hon. Friend will be well aware that Mrs. Gee's case is still subject to the legal process. I am sure that he will understand why, when I discuss it, I want to do so in terms of the general principles that it raises, but I will also respond to one or two of the points he made. I am pleased to be able to say that I will also let the House know about some of the successful things that are going on in dentistry today, including our plans for a new complaints procedure for NHS patients, which has some bearing on Mrs. Gee's case.
  It is to standards of service that I shall first turn my attention. The case raises two aspects of that matter, which go to the heart of Government policy for dentistry. Those are to ensure high standards of patient treatment and care and a mechanism whereby there can be an effective response when things go wrong, as they surely do from time to time in any profession.
  The General Dental Council shares our aim that the dental profession should promote high standards of treatment and care. I suspect that my hon. Friend—perhaps unconsciously—was a little more vigorous towards the GDC, rather than to me, than he should have been when dealing with this issue. As he pointed out, it has raised issues that have come to my attention on which we need to make progress. I have found the council extremely keen to move down the route that he suggested to ensure that patients get quality of care and high standards are promoted. It is part of its direct remit, flowing from the Dentists Act 1984, to promote high standards of professional education and conduct among all dentists—this is the important point—whether they be NHS or private dentists, which was the case with Mrs. Gee.
  To be legally entitled to practise dentistry, all dentists must appear on the GDC register; they must be suitably qualified. To that end, the GDC assesses standards of dental education at the universities and postgraduate bodies, which enables it to ensure that the qualifying examinations meet the appropriate standards. In the NHS, too, we aim to promote high professional standards throughout. It is a requirement of the dentists' terms of service that they keep their clinical skills up to date.
  To enable them to comply with that requirement, we provide a postgraduate education allowance, which allows them to claim a fee when they attend a postgraduate course and helps to ensure that their income is maintained and that there is no disincentive to keep up to date with skills. As my hon. Friend rightly pointed out, in dentistry, as in so many other areas of medicine, skills need to be developed to cope with the changing technology to which he referred. That
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  provision is just one aspect of the dentists' NHS terms of service, which place the accent very firmly indeed on providing high standards of patient care.
  The second aspect concerns what happens when treatment does not turn out as well as patients and dentists hope. Of course, I acknowledge that patients need to have the security of the knowledge that their concerns will be addressed and remedies provided. I am pleased to be able to tell my hon. Friend that much work is being done in that area following the publication of Professor Wilson's committee's report "Being Heard" and our response "Acting on Complaints". From 1 April, a new complaints procedure, which will be common throughout the NHS, will be put in place.
  The aim of the new system, which has been worked out with the profession, is to make the complaints procedure more accessible, speedier and fairer to all. I am sure that the whole House will welcome that, as many hon. Members already have. For all family health service practitioners, the new system will replace the present formal system.
  Mr. Clifton-Brown: Will that complaints procedure cover private dentistry in any way?
  Mr. Malone: My hon. Friend has probably anticipated the fact that I will come to that point, because I understand Mrs. Gee's case to be in that category. I thought that it would be helpful, as my hon. Friend raised the subject of general standards of quality, if I dealt with his NHS constituents—of whom there are many—as well as with what happens with private dentistry.
  The new complaints procedure will be practice-based. It will follow the introduction of a new terms of service provision for dentists. Where it is not possible to resolve complaints at the practice level, which should be the first and most convenient port of call, the local health authority will have an independent review role to play to offer conciliation and take unresolved issues forward.
  The patients' rights of redress do not end there. If a patient is unhappy following independent review by the health authority, or has been denied an independent review, he or she will also have the right to take the case to the health service commissioner. From 1 April, subject to the approval of Parliament, the commissioner will be able to consider clinical matters as well as administrative maladministration. That is probably the most important aspect of what happens in cases of this sort, although Mrs. Gee's was not an NHS case. The new system will widen matters to an extent that will help the public greatly.
  The new system has two principal aims. One is patient confidentiality and the other is early resolution; both are extremely important. All NHS dentists and the new health authorities have received guidance about the new system. Much work has been done to get it into place and to ensure that everyone understands what procedures need to be followed so that, as at 1 April, it is up and running.
  Those are the provisions that will be in place to deal with NHS patient complaints, which may arise in my hon. Friend's constituency, although I hope that there will not be too many of them. I hope that those that do arise will be rapidly resolved. As my hon. Friend rightly pointed out, the provisions do not apply to cases such as that of Mrs. Gee, whose treatment was undertaken on a private basis.

  1007
  I emphasise to my hon. Friend, who rightly asks what Mrs. Gee should do in those circumstances, that private patients also have their remedies. They can get help from a range of sources. They can get it from the British Dental Association, which provides guidance to its members in dealing with complaints. If Mrs. Gee had been privately insured with a scheme such as Denplan, she would have found that such schemes—which are becoming fairly common—usually provide a conciliation service as part of good business practice.
  Of course, the General Dental Council, which deals with matters of professional conduct and upholds professional standards, has a keen interest in all those matters, which are at the centre of my hon. Friend's arguments and of his queries about how we can take the matter forward and develop the council's ability to deal with such problems. At present, where a dentist's fitness to practise is judged by the health committee to be seriously impaired, the GDC may order the dentist's registration to be suspended or to be conditional on complying with conditions imposed for the protection of the public or in the dentist's interests.
  I shall now deal with the points raised by my hon. Friend about where we go from here, because, as he asserted, change is needed. The General Dental Council has approached my Department with a view to amending the Dentists Act 1984 so that it can set up a system to deal with patients' complaints about treatment outside the NHS. We shall consider that proposal sympathetically, all the better informed for my hon. Friend's powerful arguments about why that should be done.
  As this case has illustrated, it is important that private patients should have access to an acceptable complaints procedure. It is in the interests not only of patients but of the profession as a whole that there should be a procedure whereby complaints can be sorted out before the present right of recourse, which is open to patients, including my hon. Friend's constituents, to pursue complaints through the courts, is used. It is important that we do what we can to widen the scope for patients to resolve matters—and resolve them quickly, because, in cases where pain is involved, people need to resolve them quickly. I hope that my hon. Friend will be reassured to hear that, since we were approached about the issue, we have been active in its pursuit and we will continue to remain active in ensuring that patient complaints, NHS or private, are properly and speedily dealt with.
  The General Dental Council has plans to establish a statutory career redevelopment procedure that may be applicable to dentists whose performance, while not amounting to serious professional misconduct, falls below the high standards set by the profession. My hon. Friend made an apt analogy in referring to the legislation for doctors. Such a change would require primary legislation and an amendment to the Dentists Act 1984. In the meantime, any initiative by the General Dental Council to introduce voluntary participation in such procedures would be welcome. I hope that it has heard what he said and noted his concerns. Perhaps it will give that some thought.
  My hon. Friend mentioned the availability of dentistry. As he knows, dentists are independent contractors and can choose where to set up in business and which patients they will see. Patients are able to choose whether to have treatment privately, under NHS provision or on a part-NHS, part-private basis. In that
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  situation, our aim is to ensure that there is real choice for all patients at all times. That raises questions about the availability of general dental services, so I shall set out our plans on that important matter. As my hon. Friend alluded to it and it is important that the situation should be widely understood, I will consider the national situation before moving to the difficulties in his constituency.
  First, the idea that NHS dentistry is disappearing across the country is far from the truth. It is not, and there is no evidence to support that contention. There are now more dentists providing NHS treatment on family health services authority lists. There were 15,942 on 30 December 1995, which is 516 up on June 1992. I lose no opportunity to put that fact firmly on record because, to hear some people talk about NHS dentistry, one would assume that it was dying. It is not. We are committed to NHS dentistry and to accessible and effective service. To that end, not only am I pleased that there are more dentists providing it, but the Government have supported it with cash. Between 1978–79 and 1994–95, expenditure grew 60 per cent. in real terms.
  Although that may reassure my hon. Friend about the nation, he specifically raised constituency matters. Of course, I know that it may sometimes be difficult to obtain treatment in some parts of the country. For example, there is often difficulty in isolated rural communities; it is a problem of locality. My hon. Friend's constituency is an example of such problems. Some adult patients there have to travel further to find NHS dentists to treat them. That is why we have already approved the recruitment of salaried dentists to help meet shortfalls in provision.
  Last week, Gloucestershire family health services authority reported that there were five salaried dentists in the county making such provision for patients. I understand the recruitment difficulties to which my hon. Friend alluded. It is sometimes frustrating for everyone trying to deliver the service that there appear to be mechanistic obstacles in the way, but I remind him that, at present, salaries for salaried dentists are recommended by the independent review body. That does not mean that I will not carefully consider his suggestions about flexibility. I am pleased to be able to say that we have approved the appointment of a further two salaried dentists in Gloucestershire. When appointed, they will help to augment existing salaried provision in the county.
  Mr. Clifton-Brown: Does my hon. Friend accept that a possible way to ease the situation would be to move from a system of salaries for salaried dentists to one along locally determined pay lines, as nurses, for example, have done?
  Mr. Malone: My hon. Friend makes some interesting suggestions. Should those who are in a position to take advantage of them choose to do so, I would not stand in their way. Flexibility is important in these matters. I listened carefully to my hon. Friend. I am anxious to ensure that existing FHSA mechanisms are used fully. Many problems could be resolved with primary legislation, to which we are committed in due course, when we enter into a purchaser-provider system.
  My hon. Friend is interested not only in the long term but in the short term for his constituents. I conclude by dealing with the three specific points that he raised.

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  First, I will write to him about the report that Mrs. Gee is trying obtain from the Birmingham dental hospital. Secondly, I can reassure him that we will consider sympathetically the GDC's plans to establish a statutory career redevelopment procedure that may be applicable to dentists whose performance, while it does not amount to serious professional misconduct, falls below the high standards set by the profession. Thirdly, we have a clear
  1010
  policy that effective NHS dentistry should be available to all who want to make use of it. We will take all available steps to ensure that it is. My hon. Friend has set out several practical ways that, in the context of his constituency, may be possible. I will consider that carefully as we take the discussion of this important matter forward.
  It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
  Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

Oral Answers to Questions
  SCOTLAND

    Taxation
    Mrs. Gorman: To ask the Secretary of State for Scotland what representations he has received about taxes paid per head by people living in Scotland and the public expenditure per head spent there. [21319]
    The Secretary of State for Scotland (Mr. Michael Forsyth): I have received lots of representations on the subject.
    Mrs. Gorman: I thank my right hon. Friend. Is he aware of the report published by the Institute of Fiscal Studies about taxation as it will affect the regions should we have devolution in Scotland? It predicts that the basic rate of tax in Scotland would rise from 25p to 36p in the pound and that the top rate of tax in Scotland would rise from 40p to 58p in the pound. Does my right hon. Friend agree that the people of Scotland know very well that it would be madness to opt for devolution?
    Mr. Forsyth: The Institute of Fiscal Studies issued a report today which examines the effects on income tax on the basis of its assumptions about the implications of devolution and regional assemblies. The figures that my hon. Friend has cited seem to correspond with the predictions of the Institute of Fiscal Studies. I do not have responsibility for the institute and its conclusions—which are not always helpful to the Government. However, on this occasion they reflect the dangers of devolution that we have drawn to the attention of the wider public and the taxation consequences for the Scottish people.
    Mr. Connarty: Is the Secretary of State aware that the tax that everyone in Scotland is talking about—the 23rd Tory tax and the second Forsyth tax—is called the council tax? It will go massively through the roof in most local authorities in Scotland, not because of overspending but because of massive underfunding by the Government on reorganisation which the Secretary of State's party forced upon the unwilling people of Scotland.
    Mr. Forsyth: The hon. Gentleman is a former leader of Stirling district council and a former parliamentary candidate in Stirling, where he was unsuccessful—twice. I am sure that he will be interested to know that when I visited the Central region and the new unitary authority to receive a briefing as to why council tax in Stirling is projected to increase by 18 per cent. I was told that, if the previous council had not spent the balances, the increase would be 4 per cent. The profligacy of councils in the current year has led to big increases in council tax. They are not Conservative councils, but Labour councils, and the hon. Gentleman should take responsibility for them.
    Mr. Devlin: Will my right hon. Friend confirm to the House what he told me in the Scottish Select Committee—that public expenditure in Scotland is 35 per cent. higher per head of population than in England? Does he seriously expect my electors in the north of England
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    to cough up for that level of transfer if the Scottish people are given their own Parliament and their own tax-raising powers?
    Mr. Forsyth: My hon. Friend is right: the expenditure on those elements of the Scottish block is about one third per head higher in Scotland than it is in England. My hon. Friend is also right to draw attention to the dangers—should a Scottish Parliament, with tax-raising powers, be established—of assuming that English Members of Parliament would continue to vote more for a Scottish Parliament than for their own constituencies. There is also the possibility of conflict which would lead to the break-up of the United Kingdom; that is no doubt why the hon. Member for Banff and Buchan (Mr. Salmond) is so enthusiastic about the proposals.
    Mr. Wallace: What assessment has the Secretary of State made of public expenditure per head in Scotland if the Government were to introduce an immediate intervention buying scheme for beef? I am sure that he recognises the importance of the industry to Scotland, not only in terms of farming but in terms of meat processing and slaughterhouses. Does he accept that the urgent introduction of an intervention system is the minimum action necessary to get the Scottish meat trade moving again?
    Mr. Forsyth: I agree with the hon. Gentleman that the crisis facing Scotland's farmers is very serious. I had an opportunity to discuss the position with the Scottish National Farmers Union this morning. It put a number of proposals to me, which I said that I would discuss with my right hon. Friend the Prime Minister and my colleagues later today. I was also able to give the union an assurance that we would underwrite and take part in an initiative to help restore confidence in Scottish prime beef and that we would ensure that there is a co-ordinating committee within the Scottish Office drawing all interests together.
    I am extremely grateful to the hon. Gentleman for the responsible view that he and his party have taken on a matter of great concern to people not only in farming but in all the downstream industries that are affected in Scotland.

    Productivity
    Mr. Anthony Coombs: To ask the Secretary of State for Scotland if he will make an estimate of productivity growth in Scottish industry since 1979. [21320]
    Mr. Michael Forsyth: Between 1979 and 1993 there was a productivity growth in Scotland of 30 per cent.
    Mr. Coombs: Will my hon. Friend confirm that productivity growth in Scotland has not only exceeded that of the G7 countries over the past decade, but has substantially exceeded that of the United Kingdom as a whole? Is that not an indication of the huge economic transformation and growth in competitiveness that have taken place in Scotland over the past 15 years? Does it not give the lie to the claims of the Labour party that this period has seen an erosion in the Scottish manufacturing base, which is total nonsense?
    Mr. Forsyth: My hon. Friend is right to draw attention to the spectacular success of the Scottish economy in

    1013
    recent years. The last three years have seen an increase in productivity in Scotland that has exceeded that of the rest of the United Kingdom. The United Kingdom as a whole has been the job generator in Europe and unemployment has fallen as a result. Scotland has led the way, due to the enterprise of the Scottish people and the success of the Government's policies.
    Mr. George Robertson: On the subject of productivity in Scottish industries and the dilemma and crisis facing the farming and processing industries in Scotland, does the Secretary of State agree that this crisis needs all of us to work together to restore confidence in Scottish beef and to allay the legitimate health concerns on which the public will have to make up their own minds? Does he accept that the dithering, muddling and indecision on the part of the Government have played a decisive part in contributing to the crisis?
    Does he agree that radical and decisive action is now necessary for the future and that it must include some consideration of the National Farmers Union proposal for selective slaughter, a severe tightening of slaughtering laws and operation, and more publicity for the fact that quality-assured herds, both north and south of the border, are in a special case and class of their own? Will the Government consider a tracing scheme for cattle, such as that which already applies successfully in Northern Ireland? [Interruption.] Is it not time that much more energy went into accessing European funds to help this critically important and deeply endangered industry? [Interruption.]
    Madam Speaker: Order. There seems to be some confusion. The hon. Gentleman at the Dispatch Box is perfectly in order. He is talking about Scottish industry and I would have thought that the beef industry in Scotland was a most important industry in that country.
    Mr. Robertson: Perhaps above the noise of the gaggle of irresponsible Conservative Members, I could repeat the final part of my question. Before you rightly reminded hon. Members of the relevance and importance of the issue, Madam Speaker, I asked whether it was not time for much more energy to be put into accessing European funds by all of us, including the Government, to help that vital and deeply endangered industry.
    Mr. Forsyth: I welcome the hon. Gentleman's assertion that what is needed is for people to approach the problem on a non-partisan basis, and I am therefore disappointed that he should accuse the Government of having dithered. I have been fully involved in all the discussions and the Government have acted on the basis of scientific advice, which has made it perfectly clear that British beef and Scottish beef are safe and that the risk from consuming beef is very small.
    The hon. Gentleman asked me a number of specific questions. The Scottish National Farmers Union has not advocated a policy of slaughter, as he suggested. It has advocated that cast cows should not be allowed to enter the food chain. The Spongi form Encephalopathy Advisory Committee recommendations were that those carcasses should be treated in a particular way and deboned. The farmers union proposal is that the cast cows should not enter the food chain at all, but that their
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    carcasses should be disposed of at the end of their useful life. That proposal is worthy of consideration along with the others.
    The hon. Gentleman's point about ensuring proper procedures in slaughterhouses was part of the SEAC recommendations, and we are proceeding on that basis. The hon. Gentleman has asked to see me tomorrow, with his colleagues, to discuss the way forward. I am sure that I speak for everyone in farming in Scotland if I say that they long for the House to address the problem in a careful and deliberative manner and to avoid the temptation to score party political points on an issue which affects the livelihoods of thousands of people. Careless talk will cost livelihoods and destroy public confidence.
    Sir Hector Monro: I welcome what my right hon. Friend has said—and the comments of some Opposition Members—about the seriousness of the situation in Scotland. Is my right hon. Friend aware that auction marts, abattoirs and processing plants are at a full stop now? Given the advice that he has had from the Scottish National Farmers Union and the Government's discussions, will he be able to put some measures in place by next week so that confidence can be restored to the most important industry in Scotland?
    Mr. Forsyth: I agree with my right hon. Friend that the position is very serious. Jobs are already being lost and people are being laid off. As my right hon. Friend is aware, the market is at a standstill. It is important to restore public confidence and those matters are being addressed. Discussions are going on between my officials, officials from the Ministry of Agriculture, Fisheries and Food and people from the European Commission.
    I share my right hon. Friend's desire to see effective action taken quickly and I am grateful to him and to other hon. Members who have kept my office informed of the concerns that have arisen in Scotland. I am also grateful for the constructive role that the farmers union and others are playing at a difficult time.
    Mr. Salmond: Will the Secretary of State confirm that thousands of Scottish farms are in quality-assured schemes which have traceability? They have long banned any bonemeal or blood products, and that is why they are safe. In Scotland, we have breeds of Aberdeen Angus, Galloway and Highland cattle that are BSE-free. How has the Secretary of State allowed that quality of production, which is probably the safest in Europe, to be swept into the maelstrom surrounding the safety of British beef products? What proposals has the Secretary of State made to eradicate BSE from the Scottish dairy herd? What proposals does he have to exempt quality-assured beef production in Scotland from boycotts and bans? Can he argue that the confusion we have seen from Government Ministers has had any other effect than to cost the livelihoods of thousands of people in Scotland?
    Mr. Forsyth: The hon. Gentleman would do well to discuss his proposals with the Scottish National Farmers Union before advocating them. If he did so, he would find that his proposals do not command the union's support. The view of the SNFU is that both it and the NFU in England have a job to do—to restore confidence in British beef. All Scottish beef is safe to eat according to the

    1015
    experts, and the hon. Gentleman should not use this House or any other forum to say that there is beef that is not safe and beef that is. The expert advice is clear; what the hon. Gentleman has just said is an example of careless talk costing jobs in Scotland.
    Mr. Bill Walker: Does my right hon. Friend agree that the United Kingdom has the toughest regime in existence for inspection, slaughter, disposal and sale, and that we should draw the public's and the media's attention to the work done since 1989 to produce that safe regime? Perhaps we should get them to think about the double standards on the continent and the misinformation coming from some sources.
    Mr. Forsyth: My hon. Friend makes a fair point. We have been guided by science, and the scientific advice on the safety of British and Scottish beef is clear. The fact is, however, that market confidence has been severely damaged and we need to take specific measures to restore that confidence. Measures will need to be taken rapidly, and that is what is being considered at the moment. Recriminations and reaching conclusions with the benefit of hindsight are not for now: for now, we must try to ensure that British beef and those whose jobs depend on it are safeguarded by a restoration of confidence in the marketplace.

    School Buildings
    Mr. Canavan: To ask the Secretary of State for Scotland if he will make additional resources available to local authorities to enable them to improve or replace sub-standard school buildings. [21321]
    The Parliamentary Under-Secretary of State for Scotland (Mr. Raymond S. Robertson): My right hon. Friend has made substantial resources available to local authorities for school building work in recent years. In particular, on 4 March he announced the capital allocations for the new authorities for the financial year 1996–97.
    Mr. Canavan: Bearing in mind the 47 per cent. cut in capital spending on schools since the Tories came to power, how on earth can the Minister justify giving more than £12 million a year to private, fee-paying schools through the assisted places scheme while pupils in local authority schools such as Graeme high school in my constituency have to put up with sub-standard accommodation? Will the Minister reconsider his refusal to meet representatives of the school's parents? Will he also accept an invitation to visit the school so that he can see the situation for himself and be persuaded either to upgrade or to replace the sub-standard accommodation?
    Mr. Robertson: Of course I will visit the school in the hon. Gentleman's constituency. I was also delighted to be able to visit Bo'ness academy on 26 February at the invitation of the hon. Member for Falkirk, East (Mr. Connarty). I know that Graeme high school was badly affected by burst pipes during the cold spell at Christmas, but I understand that the necessary repairs have now been carried out. The broader question of refurbishment is a matter for the new Falkirk council.
    Mr. Gallie: Does my right hon. Friend agree that one of the problems in Strathclyde has been the fact that the
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    education authority has kept open far too many school buildings for the number of pupils attending school? As a consequence, it has overstretched its budget. Does he recognise that the change to single-tier authorities will allow the local authority in my area to meet the needs of local people in terms of providing additional nursery places?
    Mr. Robertson: My hon. Friend makes a valid point. The Accounts Commission has said that there are more than 300,000 surplus places in Scottish schools. I hope that the new authorities taking over on 1 April will look sensitively and carefully at the problem of over-capacity, at all times taking parents and others with them so as to ensure that the matter is dealt with sensitively.
    Ms Roseanna Cunningham: Is the Minister aware that the population growth in my constituency is quite high? Indeed, I understand that, within 10 years, Perth is likely to be the same size as Dundee, if not larger. In those circumstances, far from any overcapacity, schools in my constituency are full almost to bursting point and in need of long-term repairs and in some cases new schools need to be built. In the current circumstances of local authority funding cuts, particularly in capital allocations, does the Minister agree that it is outrageous that my constituency has no opportunity to rationalise and no real money to undertake work that is absolutely necessary for an area with a growing population?
    Mr. Robertson: I remind the hon. Lady that in the five years to 1994 we increased capital allocations for educational building by more than one third and we have maintained that record spending level. The hon. Lady should make her strident representations to her local council, because local democracy and local government are about local councils making their own priorities in the light of their spending decisions.

    Forestry
    Sir Thomas Arnold: To ask the Secretary of State for Scotland if he will make a statement about the new framework document for forestry policy. [21322]
    The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch): The framework document for the new Forest Enterprise Agency was published yesterday. There has been no change in forestry policy.
    Sir Thomas Arnold: Will my hon. Friend confirm that the removal of tax reliefs and their replacement by a variety of grants has had the beneficial effect of removing the stigma of a tax haven and encouraged the implementation of new planting techniques?
    Mr. Kynoch: My hon. Friend is absolutely right. The intention of the package of incentives introduced in 1994 was to raise planting levels across the board, to increase the potential timber quality of broad-leafed woodlands and to help to improve the environmental and recreational value of forests. The total area of woodland planted last year, including restocking, was more than 33,000 hectares, so I believe that we are moving in the right direction.
    Sir David Steel: Is the Minister aware that some of us are concerned about the gap that seems to be growing

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    between the Government's declared policy in relation to the sale of forestry land and practice on the ground? Can he say what proportion of sales are going through without the public access agreements to which the Government are supposed to be committed?
    Mr. Kynoch: Every effort is made to secure access agreements, which guarantee access for the public on foot. Following the forestry review, the Forestry Commission has encouraged local authorities to respond positively when offered access agreements; it has allowed them more time to consider the agreements and has offered to meet their reasonable legal costs.

    Assisted Places Scheme
    Mr. John Marshall: To ask the Secretary of State for Scotland how many pupils were assisted by the assisted places scheme in the last year for which figures are available; and how many will be assisted in the year 1996–97. [21323]
    Mr. Raymond S. Robertson: Provisional figures indicate that around 3,050 pupils are being assisted in the current 1995–96 school session. Approximately 3,500 pupils will be assisted in the 1996–97 school session.
    Mr. Marshall: Will my hon. Friend tell the House how many parents of those who have been assisted under the assisted places scheme have an income of less than £9,000 per year? Does he agree that the scheme makes admission to private schools classless rather than the preserve of the privileged few, as it was when the Leader of the Opposition went to Fettes?
    Mr. Robertson: I can tell my hon. Friend that 46.41 per cent. of those parents had incomes of less than £9,711. I agree whole-heartedly with the second part of his question.
    Mr. Wray: Does the Secretary of State agree that the Plowden report recommend that the pupil-teacher ratio in deprived areas should be as low as 1:10? Why is he spending £10.9 million—possibly doubling to £20 million in the next year—on 3,000 assisted places? Does he think that that is just?
    Mr. Robertson: We are also funding, through the urban partnerships scheme, an additional 1,000 teachers in deprived areas throughout Scotland to help to raise standards in the very areas that the hon. Gentleman mentioned.
    Mr. Jacques Arnold: Has my hon. Friend noted that Opposition Members would like to stop children from deprived families attending schools such as Fettes although they are quite happy to be led by someone who went to such a school? Is not what is good enough for the Leader of the Opposition good enough for deprived children in Scotland?
    Mr. Robertson: My hon. Friend is absolutely right. The scheme has helped 11,000 children from less well-off
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    backgrounds in Scotland to be given the same start in life as many Opposition Members. I do not see much wrong with that; it is a pity that Opposition Members do.
    Mrs. Liddell: How does the Minister justify a scheme that is so much at odds with the principles of education in Scotland, where 97 per cent. of school pupils are in the state sector? How can it be acceptable to spend £3,500 of taxpayers' money on pupils in private schools when less than £2,500 is spent on those in state schools? With regard to the £9,700 ceiling, will he enlighten us as to the monitoring mechanisms which exist to ensure that people do not use creative accounting to avail themselves of the scheme?
    Mr. Robertson: This is the second occasion on which the hon. Lady has cast aspersions on parents currently using the scheme. When the First Standing Committee on Delegated Legislation considered the Education (Assisted Places) (Scotland) Regulations 1995, I asked her to furnish me with any details of abuse that she might have. That was more than two months ago and I am still waiting. If the hon. Lady cannot put up on this subject, she should shut up. As for the comparative costs that she mentioned—£3,438 and £2,658—when she gives details of the alleged cases of abuse, perhaps she will tell us whether she included the cost of capital building and other central support services in the second figure before making her spurious comparison.
    Lady Olga Maitland: Will my hon. Friend confirm that the abolition of the assisted places scheme, from which 3,500 children benefit, would place an additional heavy burden on local education authorities? Is it not a case of Labour Members being dogs in the manger, trying to deprive children of opportunities simply because they cannot all take advantages of those opportunities themselves?
    Mr. Robertson: I remind the House, and my hon. Friend, that the money that we spend on the assisted places scheme does not come from what we spend on state education; it comes from a different budget. If there were no assisted places scheme, all my hon. Friends would have a claim to the money.

    Highlands and Islands University
    Mrs. Ewing: To ask the Secretary of State for Scotland if he will make a statement on the progress of the establishment of a highlands and islands university. [21324]
    Mr. Michael Forsyth: Since I gave my answer to the hon. Lady at the Scottish Grand Committee meeting in Inverness, officials have been engaged in a wide range of meetings with a number of people. They are now considering the steps that need to be taken to establish a university of the Highlands.
    Mrs. Ewing: We welcome the progress that has been made since that statement, but will the Minister tell us what hurdles have been overcome in terms of meeting the criterion for the millennium fund? I understand that some £38 million may well be allocated to a highlands and islands university project through that fund. I also

    1019
    understand that the Minister is meeting officials next week to discuss the matter. Will he tell us what issues need to be investigated and studied? We are all very keen to have the university, which could create about 700 direct and 400 indirect jobs and inject £70 million per annum into the highlands and islands economy.
    Mr. Forsyth: I appear to be in the embarrassing position of finding that the hon. Lady knows more about my diary for next week than I do. If she tells me that I am to attend such a meeting, I can only assume that that is correct. The hon. Lady is right: at least one application has been made to the Millennium Commission, and a second application is now before the commission. Such decisions are taken independently of me, but I assure the hon. Lady that we are considering all the options and that I am applying all my energy and enthusiasm to make the project a reality—just as I did in the case of the splendid hospital which was established in her constituency when I was last in the Scottish Office. If we can create a partnership, I am sure that it will benefit the highlands and Scotland as a whole.
    Mr. Matthew Banks: Does my right hon. Friend agree that the number of students entering higher education in Scotland has more than doubled since 1980–81, and that since then those students have made a major contribution to Scottish industry, particularly Scottish high-tech industry?
    Mr. Forsyth: Higher education is an example of that success and Scotland has taken the lead in the use of technology as a means of teaching and of encouraging learning. That is the opportunity that the university of the highlands project represents. It is a way of creating a new style of university that draws on the technology of the next century. It will create opportunities to study for people in areas with widely spread communities and low populations in a way that has been pioneered by the gaelic college in Skye. There are great opportunities for Scotland to lead the way in this field, as in so many others.
    Dr. Bray: In the context of the extension of higher education facilities in Scotland, the Secretary of State is aware of the proposal by St. Andrews university and Lanarkshire development corporation for the establishment of a university college in Lanarkshire on the Ravenscraig site. Will he confirm that he would encourage a proposal on those lines from Scottish Enterprise or Lanarkshire development corporation?
    Mr. Forsyth: The hon. Gentleman raises an issue that I do not think is directly related to the university of the highlands. However, I am aware of his constituency interest in this matter and I shall certainly write to him about the matter.
    Mrs. Ray Michie: The Secretary of State will be aware that Dunstaffnage marine laboratory in Argyll hopes to be part of this exciting new highlands and islands university. He will also be aware that we hope to attract students from all over the place, including Northern Ireland. How will he help such students to get to Argyll? When will the Campbelltown-Ballycastle ferry link be established?
    Mr. Forsyth: As the hon. Lady knows, this is a complex and difficult issue and I am still awaiting advice
    1020
    from officials. If I can show the ingenuity that the hon. Lady has shown asking a question about a ferry service on a question about the highlands and islands university, I am sure that we will be able to overcome some of the difficulties that have been identified.
    As the hon. Lady knows, I should like such a service to be established. There are difficulties with viability, but these matters are being addressed by officials. As soon as I have received the advice, which I understand is imminent, I shall certainly look at it with a view to being helpful to the hon. Lady. [HON. MEMBERS: "Oh."] This is a serious matter and I shall try to be helpful to the hon. Lady and to many others who have expressed an interest in it, not least many of the hon. Members who sit behind the hon. Lady.
    Mr. Macdonald: Will the Secretary of State confirm that £6 million has been cut from the training budget of Highlands and Islands Enterprise and that further education colleges in the highlands and islands face a severe funding crisis because of Government cuts? Is there not a contradiction between his rhetoric supporting a university and the reality of cuts on the ground?
    Mr. Forsyth: There was a contradiction in what hon. Members said only a matter of weeks ago, when they argued for more of the money that is provided under the local government formula, which could only be at the expense of the Scottish Office block, and then complained about reductions in that block because money had been used to fund Labour-controlled councils throughout Scotland. Scottish Enterprise has given undertakings that it will meet its training output on a reduced budget, and I see no reason why Highlands and Island Enterprise should not be able to do the same.

    Electronic Goods Exports
    Mr. Congdon: To ask the Secretary of State for Scotland what assessment he has made of the trend in Scottish exports of electronic goods over the last five years; and if he will make a statement. [21325]
    Mr. Kynoch: Over the past five years, Scotland's exports of electrical and electronic engineering have nearly trebled to reach a value of £2.122 billion in 1994.
    Mr. Congdon: Can my hon. Friend confirm that that is reflected in employment in the Scottish electronics industry, which has increased by 5 per cent. since 1984, and that employment in electronics manufacturing in Scotland accounts for 13 per cent. of all manufacturing jobs in Scotland? Does not that demonstrate the success of the Government's policies in stimulating an enterprise culture and competitiveness in the Scottish economy?
    Mr. Kynoch: Yes, I agree with my hon. Friend. In fact, not only do they do that, but they have contributed significantly to the change in the economy of Scotland, where traditional industries that have gone through difficult times have been replaced by a significant electronic sector. That sector is growing and is aided by inward investment, which is attracted by the highly competitive nature of the environment in which we work and live under the Government in Scotland.
    Dr. Reid: Given that, a few moments ago, the Secretary of State asked us all to pull together and not to undermine

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    industry in Scotland, will he take the same ordinance to heart? In future, will he stop undermining the possibility of future inward investment in Scotland with his puerile scares about a Scottish Assembly? Would he not do better to take the advice of Neil Hood, former director of Locate in Scotland, and now head of the Strathclyde international business unit, who said that there is no prima facie case that devolution in Scotland will affect inward investment? Least of all, will the right hon. Gentleman stop attempting to use petty party political points, which undermine future investment in Scotland, when he and his colleagues are at the same time demanding that everyone else should follow that stricture when it comes to beef?
    Mr. Kynoch: I am disappointed in the hon. Gentleman, who I considered to be a fairly responsible Member, given the co-operation he gave me when discussing the unfortunate incident at Cummins. I shall, however, continue to ensure that everyone in Scotland is well aware of the implications of the tax proposals put forward by the Opposition parties—
    Dr. Reid: There he goes, deterring investment again.
    Mr. Kynoch: The hon. Gentleman does not like hearing it because he believes that a drop in competitiveness will not affect industry in Scotland.
    I believe, however, that it is clear that, if Scotland became the highest taxed part of the United Kingdom, and if the tartan tax were applied by the Opposition parties, Scottish industry would become less competitive and therefore not succeed. That would be bad for employment in Scotland and, as the hon. Gentleman knows, make it much more difficult for Scotland, in competition with other parts of the United Kingdom, let alone other parts of Europe, to attract inward investment to Scotland and Lanarkshire, which is near to his heart.
    Mr. Stewart: Would my hon. Friend pay tribute to the management and work force of those Scottish companies that have achieved enormous success in the production and export of personal computers, automatic banking machines and workstations? Does he also agree that there is additional and considerable potential to improve Scotland's exports of software?
    Mr. Kynoch: Yes. My hon. Friend is right to refer to the significant contribution made by the many employees in the electronics industry. Their productivity gains and commitment to their companies have contributed significantly to the success of those companies. My hon. Friend is right to talk about improving the export of software. Certain initiatives have already been taken and there has been a good exchange between Virginia and Scotland and Scotland and Virginia, with inward missions going both ways, and good co-operation on successful joint ventures in the interests of the industry. I hope that that will be encouraged. I also hope that future initiatives will be taken under the Scottish export strategy, known as international challenge, which I launched last year, to ensure even greater success in that important sector of business.

    Further Education Colleges
    Mr. Worthington: To ask the Secretary of State for Scotland if he will make a statement about the financial position of further education colleges in Scotland. [21326]
    Mr. Raymond S. Robertson: The financial position of the Scottish further education colleges is satisfactory, with total net assets of £390 million.
    Mr. Worthington: It is utter nonsense to say that the financial capacity of FE colleges is satisfactory when 15 colleges, including that at Clydebank, face cuts of more than 4 per cent. this year, which will lead to job cuts. Given that all parties agree that skills shortages and the lack of skills in the work force are key factors that inhibit the success of the country, why are the Government cutting funding to FE colleges in Scotland?
    Mr. Robertson: The hon. Gentleman does the college in his constituency and the further education sector in Scotland a disservice. He should take time out to see the sterling work that is being done by FE colleges throughout Scotland since incorporation. The number of students and courses is at a record level. There are more qualifications. More money is going into the sector and outputs are second to none. In many ways, FE colleges in Scotland are leading not just the United Kingdom, but the world. The hon. Gentleman should go to his local college in Clydebank and see at first hand what is happening.
    Mr. Ian Bruce: Surely my hon. Friend agrees that, since the Government came to power, the number of people going into further education colleges in Scotland has more than doubled and that the excellent work in those colleges is reflected in the success of Scottish industries. Will he assure the House that he will keep a close eye on the number of people wanting to go to college as first-time entrants and ensure that excellent retraining courses are available to people further on in their careers?
    Mr. Robertson: I take on board all my hon. Friend's points. More money, more students, more courses—that is what is happening in further education throughout Scotland. It does little credit to Opposition Members that it takes an English Member to praise Scottish further education.
    Mr. Michael J. Martin: May I praise North Glasgow college, which is in my constituency and has campuses in Springburn and in Barmulloch? It draws students from all over the Glasgow region and from Lanarkshire. If that college were not there, many young boys and girls would be unemployed and on the dole. At least gaining the college's qualifications gives them an opportunity to have a more secure future. I urge the Minister to increase expenditure on all such colleges because they are excellent places of learning.
    Mr. Robertson: I welcome the hon. Gentleman's warm words for what is happening at the college in his constituency. The same thing is happening throughout Scotland. We are putting more money than ever before into further education, and that has been shown by the results.
    Mr. Maclennan: I do not take issue with the Minister's general points, but will he consider with particular care the financial predicament of the colleges in Thurso and Inverness? Due to a new formula, central Government assistance for those colleges has been slashed. My hon.

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    Friend the Member for Ross, Cromarty and Skye (Mr. Kennedy) and I have received strong representations from the principals about that.
    Mr. Robertson: Formula funding is the fairest way in which to fund further education colleges. Last summer, when I visited many colleges throughout Scotland, I was struck by the number of principals who supported the formula funding policy. We have adopted a measured, phased approach of 100 per cent. formula funding, with a safety net to ensure that no college receives a grant of 5 per cent. less than the previous year. I am more than happy to discuss the matter with the hon. Gentleman and those principals if he wishes to bring them here.

    Tree Diseases
    Mr. Pawsey: To ask the Secretary of State for Scotland what is the amount currently spent by his Department on research into tree diseases; and what was the figure in 1990. [21327]
    Mr. Kynoch: Last year, the Forestry Commission spent £785,000 on research into tree diseases. Its expenditure in 1990 was £715,000.
    Mr. Pawsey: I thank my hon. Friend for that answer. What areas of tree disease attract the most funding? On what basis are those priorities made? What trees are most susceptible to disease?
    Mr. Kynoch: My hon. Friend has a healthy interest in tree diseases. I know that he has been invited to visit the research station at Alice Holt in Farnham. When he sets a date for his visit, which I understand he has not yet done, he will be able to have a root and branch examination into all the diseases and, possibly, at the next Scottish questions, he can branch out into another area.

    Health Board Boundaries
    Mr. Norman Hogg: To ask the Secretary of State for Scotland what plans he has to review the boundaries of health board areas; and if he will make a statement. [21328]
    The Minister of State, Scottish Office (Lord James Douglas-Hamilton): We have no plans to change Scottish health board boundaries in the immediate future.
    Mr. Hogg: Does the Minister accept that, due to the reorganisation of local government, a fundamental change in local administration in Scotland has taken place and that, in those circumstances, reviewing health board boundaries would be appropriate? Does he accept that there have been other changes in the health service's structure and organisation, some of which have not been healthy? They include the dreadful experiment being conducted—against the public's wishes—at Stonehaven hospital.
    Lord James Douglas-Hamilton: Doctors and the local community have, of course, been consulted about Stonehaven. A purpose-built hospital is to be built very much faster than would have been possible through any
    1024
    other means, and it will be of enormous benefit to communities in the north-east of Scotland. We concluded that changing the boundaries would outweigh any advantages. Indeed, the hon. Member for Clydebank and Milngavie (Mr. Worthington) made strong representations at a previous Scottish Question Time against boundary changes in his area.
    Mr. Stewart: My constituency, where GP fundholding practices have been an enormous success—
    Mr. Donohoe: Rubbish.
    Mr. Stewart: That did not sound as if it came from a constituent of mine. My constituency is currently divided between Greater Glasgow and Argyll and Clyde. I would be inclined to take the traditional Conservative approach and do absolutely nothing about it, but if my hon. Friend is inclined to make any change, would he agree to meet me before making any decision?
    Lord James Douglas-Hamilton: The answer is most certainly yes. We shall keep the matter under review, but we have no immediate proposals to change any of the boundaries.
    Mr. Charles Kennedy: Is the Minister aware that one of his predecessors, Lord Fraser of Carmyllie, advised me last year that, when the local government reform was complete, it would be time to re-examine the boundaries of local health councils in the Highlands health board area—which were decided several years ago by the present Secretary of State for Scotland in consultation with local hon. Members? Would it be appropriate, therefore, to arrange the meeting that the former Minister with responsibility for health in Scotland suggested and, given the parliamentary boundary changes in the highlands, to reconsider whether it would also be appropriate to establish an equivalent or, indeed, different local health council structure that would better suit the system of administration?
    Lord James Douglas-Hamilton: I shall indeed be happy to meet the hon. Gentleman and his constituents if he so wishes.
    Mr. McAllion: Does the Minister accept that there are more than just geographical limits to the jurisdiction of Scottish health boards, and that Grampian health board has, uniquely, crossed a boundary line in commissioning private consortia to provide NHS services at a privately owned and privately run hospital in Stonehaven? Is it the Government's intention to repeat anywhere else in the national health service what his fellow Minister described as "the experiment" at Stonehaven? It is a simple question and requires a straight answer from the Minister—yes or no.
    Lord James Douglas-Hamilton: If other areas in Scotland want purpose-built hospitals very much more quickly than would otherwise be possible, of course I would support private finance initiatives. Indeed, many are now under consideration in Scotland. If the hon. Gentleman is saying that the people of the north-east should be deprived of the opportunity to have a brand new hospital within a very short period of time, that would be contrary to their interests.

    Gas-fired Generating Unit (Gartcosh)
    Mr. Eric Clarke: To ask the Secretary of State for Scotland when he last met PowerGen to discuss its proposed gas-fired generating unit at Gartcosh in Lanarkshire. [21330]
    Mr. Kynoch: No such meeting has taken place.
    Mr. Clarke: Is the Minister aware that there is over-capacity of generating units in Scotland? Is he aware that a 700 MW gas-fired station would displace 2.1 million tonnes of coal—half the production capacity of the coal industry in Scotland? The knock-on effect would be the closure of Cockenzie power station, resulting in a loss of 240 jobs and £7 million-worth of salaries from the economy. There are many more such facts. I hope that the Minister will take cognisance of them all before he agrees to any such development. It is not needed, because there is already over-capacity.
    Mr. Kynoch: I am sure that the hon. Gentleman is aware that, for such an application to progress, consent under section 36 of the Electricity Act 1989 is required. PowerGen's application has only just been received and is still under consideration. It would obviously not be appropriate for me to comment on those plans. I would have much more faith and be more positive in my resolve about, for example, Scottish Power and Scottish Hydro-Electric. They are very successfully competing not only north of the Borders, but exporting power south and competing in England. I see nothing to fear from competition to those companies. I believe that they can compete well and succeed, and that there is a great future for them in the low-sulphur coal that is produced in Scotland.
    Mr. McFall: Is it not true that there is no rationale for that corporate sabre rattling by PowerGen? There is no economic logic in a market that is already chronically oversupplied, nor is there any employment logic in an application that will provide 35 jobs in PowerGen while possibly losing up to 4,000 jobs in the rejuvenated coal industry. Is PowerGen not simply using the application to beat the Government into submission over the way in which the interconnector between Scotland and England is presently arranged? Does not the buck stop at the Secretary of State's door, as the Electricity Act 1989 requires him to make the final decision? Can the Minister give some support to Scottish industry and society today?
    Mr. Kynoch: The hon. Gentleman obviously prepared his question before he heard my original answer. Of course I know perfectly well about section 36 of the Electricity Act 1989, and have already referred to it. I should have hoped that, rather than knocking the idea of competition, the hon. Gentleman would have recognised the significant success of Scottish companies and how they have competed south of the border, by exporting electricity.
    I have visited the successful Longannet colliery and seen it supplying coal to the next-door power station. It produces low sulphur coal, which is more environmentally friendly than some other coal used in power generation. I should have hoped that the hon.
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    Gentleman would have adopted a rather more constructive attitude towards Scottish business, and perhaps followed the lead that I gave in my answer to the main question.

    Higher Education Students
    Sir Irvine Patnick: To ask the Secretary of State for Scotland what is the number of students in further and higher education in Scotland; and what is the current ratio of school leavers to the number entering higher education. [21331]
    Mr. Raymond S. Robertson: Forty-three per cent. of Scottish school leavers enter higher education and the total number of students in higher and further education is 413,000.
    Sir Irvine Patnick: Does my hon. Friend agree that those figures exceed not only the forecast in the 1987 White Paper, but also that in the 1991 White Paper, by an astonishing amount?
    Mr. Robertson: My hon. Friend is right to refer to the record expansion in the further and higher education sectors. It is important to remember that that has been achieved without any compromise on the quality of teaching, which is a tribute to the professionalism of the staff in both sectors.
    Mr. Maxton: Is there to be a separate Scottish committee to undertake a review of higher education such as will be undertaken by the Dearing committee in England and Wales? If not, what will the Scottish membership of the Dearing committee be?
    Mr. Robertson: My right hon. Friend the Secretary of State and I are keeping in close touch with the Dearing committee. There will be a separate Scottish input to it, and we are consulting widely with our colleagues in the Department for Education and Employment on the broad terms of reference and the membership. Scottish input will be sought.
    Mr. George Robertson: It was understood that the Dearing committee on higher education would be conducted on a bipartisan basis. I hope that that will apply in Scotland as well as to the English Department for Education and Employment.
    The House is entitled to know a little more than the Minister has said so far about what the membership of the Dearing committee will be, and how a specific Scottish dimension will be recognised. After all, we have a completely different primary and secondary school system and a different degree structure north of the border. Can the hon. Gentleman be precise about the timetable? When will the Dearing committee's terms of reference and membership be announced? When shall we know who will represent Scottish interests on it?
    Mr. Raymond S. Robertson: I welcome the hon. Gentleman's support for the broad ideas behind the Dearing committee. We expect it to start work after Easter and to report by the summer of 1997. The responses received to last year's consultations on the purpose, size and shape of higher education, especially the Scottish

    1027
    responses, will be made available to the committee. We are now consulting widely on membership, and the committee will embrace both consumers and producers of higher education.
    We are seeking comments from Scottish interests on the composition and draft terms of reference of the committee, and on behalf of the Secretary of State I extend to the hon. Gentleman, and to the hon. Member for Monklands, East (Mrs. Liddell) an invitation to discuss their ideas on those subjects, so that the peculiar and specific needs of the higher education sector—
    Mr. Wallace: Does the invitation extend to all parties?
    Mr. Robertson: Yes. They can all have their say before we finally agree on the terms of reference and the membership.

    Taxation (Inward Investment)
    Mr. John Greenway: To ask the Secretary of State for Scotland what discussions he has had with potential inward investors about taxation rates; and if he will make a statement. [21332]
    Mr. Michael Forsyth: Taxation rates regularly feature in our discussions with potential investors.
    Mr. Greenway: Does my right hon. Friend agree that Scottish life assurance companies are world leaders in their markets and are responsible for substantial life assurance business throughout the United Kingdom and, increasingly, Europe? Has he discussed with the boards and chief executives of those successful companies the implications for business of a different rate of income tax in Scotland?
    Mrs. Ewing: Boring.
    Mr. Forsyth: The hon. Member for Perth and Kinross (Ms Cunningham), I think, suggested from a sedentary position that this was boring.
    Mrs. Ewing: No, it was me.
    Mr. Forsyth: On this occasion, I must disagree with the hon. Member for Moray (Mrs. Ewing). Nothing could be more central to Scotland's interests than the impact of different rates of income tax north and south of the border, as proposed by the Opposition parties which support a tax-raising parliament.
    Mr. Donohoe: He is clutching at straws.
    Mr. Forsyth: The hon. Gentleman suggests that we are clutching at straws, but my hon. Friend the Member for Ryedale (Mr. Greenway) asked a serious question. If the marginal rate of tax on savings is 23p north of the border and 20p south of the border, Scottish financial institutions will be put at an enormous disadvantage in their efforts to attract savings. Scotland's pensioners would also be put at an enormous disadvantage, as the return on their savings would be less. It is high time that Opposition
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    Members faced up to the consequences of their disastrous policy proposals for Scotland, and their effect on jobs in Scotland.
    Mr. Graham: Is the Secretary of State aware that Scotland is losing too many factories and too much potential business to other countries—especially Ireland—because the Government have not provided sufficient capital to attract investment? My constituency recently lost a company to Ireland. If the Government had got off their mark, that company could have provided 400 or 500 new jobs. Should not the Secretary of State be trying to get jobs into Scotland?
    Mr. Forsyth: If the hon. Gentleman is worried about losing business in his constituency, he had better come across to this side of the House. He is a member of a party that is committed to policies that would add to the costs of business in Scotland through the minimum wage, the social chapter and the tartan tax. If those policies were introduced, the hon. Gentleman would find not only that jobs were not coming to Scotland, but that existing jobs would be going south of the border. That would be the consequence of Labour's policies. The sooner he gets his party leaders to wake up to that, the better for everyone concerned.
    Mr. Gallie: Will my right hon. Friend welcome the investment into Ailsa Perth in my constituency by Cathelco, which has taken Ailsa Perth out of receivership? The company has good order books but has been short of cash recently, and the investment augurs well for my constituents, for jobs in my constituency and for the local authority.
    Mr. Forsyth: I warmly welcome my hon. Friend's news, which I am sure the House will welcome also. The people of Ayr are extremely lucky to have him as their Member of Parliament. He is a doughty fighter on behalf of their interests, and I am sure that everyone in Ayrshire is well aware of that.
    Sir James Molyneaux: Will the Secretary of State consider discussing with his Treasury colleagues the possibility of making the enterprise investment scheme much more effective, perhaps by doubling the taxation relief?
    Mr. Forsyth: I shall certainly give the right hon. Gentleman's suggestion careful thought. I always consider very carefully having any conversations with my Treasury colleagues because one does not always end up with what one expected at the beginning, but I shall consider the right hon. Gentleman's proposal and I would be grateful if he would fill me in on some of the details of what lies behind it after Question Time.

    Private Finance Initiative (Health Service)
    Mr. Ingram: To ask the Secretary of State for Scotland how many private finance initiative schemes are currently being considered for the NHS in Scotland. [21333]
    Lord James Douglas-Hamilton: Fifteen.
    Mr. Ingram: In reply to my hon. Friend the Member for Dundee, East (Mr. McAllion), the Minister avoided answering the question about the Stonehaven experiment. Will the Secretary of State give an absolute guarantee here and now that no direct clinical services will be undertaken by the private sector under the Hairmyers PFI scheme? A simple, straightforward, yes or no answer will do.
    Lord James Douglas-Hamilton: The answer is no. Any board or NHS trust can put forward proposals if
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    they are carefully worked out in the best interests of the community concerned. I would endorse the words of no less a person than the hon. Member for Hamilton (Mr. Robertson), who issued a press release on 10 January 1995 saying:
    "We are not opposed to public/private partnerships—they bring in much needed money for the NHS".
    He was right when he said so, and it is that policy that we are implementing today.

Qualifications (16 to 19)
3.30 pm
The Secretary of State for Education and Employment (Mrs. Gillian Shephard): With permission, Madam Speaker, I should like to make a statement about education and training for 16 to 19-year-olds.
Last year, I invited Sir Ron Dearing to review the framework of qualifications for 16 to 19-year-olds and to advise on ways to strengthen it. Sir Ron has completed that review and has now reported to me and my right hon. Friend the Secretary of State for Wales. His report is published today, and copies are available in the Vote Office. I am very grateful to Sir Ron and his team for their work.
We can be in no doubt about the importance of this report. To compete internationally, Britain needs a highly motivated, well-educated, well-trained and adaptable work force. We have set very demanding targets for the improvement of education and training and the achievement of qualifications by young people and adults. They are targets that we must meet or exceed to keep pace with our competitors.
Not long ago, most young people left education or training as soon as they could. Now, nearly nine out of 10 16-year-olds stay on, and they do better than ever before. More young people are getting good GCE A-levels. The new general national vocational qualifications are fast becoming recognised as a worthy alternative route. National vocational qualifications are well established and valued by employers, and their take-up is growing. There remains much to do, however. That is why I asked Sir Ron to take a long look at the qualifications framework, and to make proposals to improve it.
The recent report of the Select Committee on Education made it clear that the period between 16 and 19 is a crucial phase of education and training. It is a time when many young people build on earlier success in school to pass through gateways to employment or higher education. For others, it is a second chance to develop the skills and knowledge they need to make a good start in life.
The needs and aptitudes of young people and adult learners are diverse. Our system of education and training and the qualifications must therefore be responsive, flexible and innovative. Qualifications must also be rigorous and of the highest quality and standards. That is the task that we asked Sir Ron to undertake, and I am delighted to be able to welcome his report as a major step forward.
Sir Ron has conducted a thorough and far-reaching review, and consulted widely. He has given many pointers for further progress. Some proposals can be carried forward immediately; others need further work by qualifications bodies and other bodies before they can be given full effect.
To that end, I am writing today to the chairmen of the School Curriculum and Assessment Authority and the National Council for Vocational Qualifications setting out the Government's views on the proposals. My right hon. Friend the Secretary of State for Wales and my right hon. and learned Friend the Secretary of State for Northern Ireland will take appropriate action for the relevant bodies in Wales and Northern Ireland.
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I should like to highlight the most important measures that the Government propose in response to Sir Ron's review. We support the proposals to strengthen the existing framework of qualifications and to make it clearer and more accessible, by building on the high-quality qualifications that already exist and by introducing common national certificates. I also welcome the proposal to introduce a demanding new national diploma to encourage greater breadth of achievement.
SCAA and the NCVQ have already established a joint committee to take those proposals forward. The aim is to have the new framework in place, and to begin awarding new certificates, in September 1997. Like Sir Ron, as changes are made, I recognise the need to take fully into account the needs of employers and of adults who also use the qualifications.
We welcome the proposals further to strengthen the rigour and standards of A-level examinations and create a new-style AS-level. No one should be in any doubt about the Government's determination to ensure that our qualifications remain of the highest quality. I am asking the regulatory bodies to carry forward Sir Ron's recommendations, and to put detailed proposals to me later this year.
We welcome the proposals for the reform and strengthening of training for young people in England and Wales by the creation of a new system of national traineeships, following the successful introduction of modern apprenticeships. There will also be development of training arrangements for those young people who reach the age of 16 not yet ready for, or clear about, their next steps in learning throughout life.
My Department will shortly consult employers, the education sector and other interested parties on the detail of the new arrangements, which we intend to implement on a phased basis from September 1997. My right hon. Friend the Secretary of State for Wales will consult as appropriate for Wales.
If young people are to make the most of the opportunities that Sir Ron's proposed framework envisages from age 16, there are implications for the learning that takes place before that age. He has therefore recommended the introduction of the national record of achievement to young people before the age of 14, and consideration of new initiatives to provide new opportunities for 14 to 16-year-olds.
I welcome those approaches and will publish a consultation document next month that will invite views on those and other ways of making more effective use of work-related learning to help raise attainment among young people.
A vital part of Sir Ron's report concerns the key skills that are necessary for work and lifetime learning, particularly literacy, numeracy and information technology. Those skills are needed at increasingly high levels for the work force of tomorrow. The proposals will create opportunities to develop them, and incentives to do so, for all 16 to 19-year-olds pursuing education and training. We are asking the qualifications bodies to make detailed proposals to adjust existing qualifications and develop new ones. We shall consider, in partnership with employer organisations and the qualifications bodies, how best to take forward Sir Ron's wider proposals.

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The report highlights the central importance of careers education and impartial guidance about the full range of education, training and employment opportunities. Our reforms of the careers service are designed to provide more effective guidance.
Sir Ron has taken into account, and built upon, two important reviews of vocational qualifications that overlapped with his review. He has endorsed the proposals of the review led by Dr. John Capey to make GNVQ assessment and grading more rigorous and manageable. Those qualifications are highly motivating for students, but there must be clear, consistent, national standards through a simplified assessment regime that focuses on the quality of students' work.
Sir Ron has also endorsed the findings of the review of NVQs by Gordon Beaumont. That made recommendations to make NVQs more rigorous, to reduce the jargon that has grown up in them, and to increase the range of assessment methods used. I am today writing to the chairman of the National Council for Vocational Qualifications asking him to take forward action to improve GNVQs and NVQs in line with the recommendations of both reviews.
Finally, Sir Ron proposes that we should follow the successful merger of the Education and Employment Departments by bringing together the work on academic and vocational qualifications of SCAA and the NCVQ. I think that there is a strong case for a single body having responsibility for qualifications and also curriculum matters, but I want to be sure that the worlds of employment and education support it as the best way forward. I will consult widely on that part of the proposals in the next few months, before taking a final decision. My right hon. Friends will be conducting separate consultations on matters relevant to Wales and to Northern Ireland.
While we have made great strides in recent years in improving education and training for young people, we must continue to improve. To do that, we need a range of rigorous and high-quality qualifications. Only in that way can we build a well-educated and highly skilled adult population for the 21st century. Our international competitiveness and the future prosperity of today's young people depend crucially on our success in educating and training them to the highest level they can reach. Sir Ron Dearing's proposals for a reformed framework of qualifications set a powerful agenda for change. I thank him, and I accept the challenge of that agenda.
Mr. David Blunkett: I endorse the Secretary of State's remarks, and offer our thanks and appreciation to Sir Ron Dearing for the work that he has done in producing the report. We welcome the broad thrust of the report and the Secretary of State's statement this afternoon, which echo the principles and the programme that we laid out in our document only a week ago. [Interruption.]
However, was Sir Ron not precluded from examining the key issues of structure and funding within which his proposals must be viewed? Will the Secretary of State confirm whether he was working within a framework of market competition that sets school against school and
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sixth form against college? Instead of receiving advice about their best route, young people are encouraged to stay on a particular route based on the existing framework.
The destructive market approach—which sets institution against institution and college against college, and which sees the Further Eduction Funding Council, local education authorities and training and enterprise councils at odds with each other—is an unsatisfactory and an unacceptable way forward.
Is it not deeply complacent for the Secretary of State to parade the notion this afternoon that the staying-on rates at age 16 are satisfactory, when last year the number of students in full-time education fell? [Interruption.] Only 59 per cent. of 17-year-olds are in full-time education in the United Kingdom, compared with an average of more than 80 per cent. in other Organisation for Economic Co-operation and Development countries. [Interruption.] At age 18, the figure falls to 38 per cent. The number of students receiving advanced qualifications in this country is half that in Germany and Japan.
Is it not time to set aside the deep complacency—which manifests itself in the heckling of Conservative Members—and come together to introduce a programme of change that will transform this country's future knowledge and skills base?
How can the Secretary of State commend her changes to the careers service when they have led to fragmentation and to privatisation? Some 30 per cent. of students taking A-levels drop out, and the drop-out rate in the vocational field is also extremely high. Sir Ron's proposals for traineeships point clearly to the total failure of the Government's youth training scheme, which for years we said was unsatisfactory.
This afternoon, the Secretary of State had the cheek to compare it with the modern apprenticeship scheme, which is obviously completely different, with differing aspirations and a different level of achievement. The low status and the narrow base of the YTS is rightly condemned in Sir Ron's report.
We commend the emphasis by Sir Ron Dearing's report and by the Secretary of State's statement on rigour and quality. However, does the Secretary of State agree with me that it is time to ensure—through a programme of information, education and advice—that employers and those in the education service are clear that the vocational route can offer the same rigour and the same quality as the academic route?
Does she agree that underpinning those routes by the core skills, and by extending and developing the A-level route, is a key way forward in terms of breaking down the artificial barriers, the demarcation lines, that have bedevilled this country, and have led to only 27 per cent. of our adults having a vocational qualification, compared with two thirds of the population in Germany, for example?
Does the Secretary of State agree with me that it is time to plan so that we can avoid the conflict between vocational and academic skills, and draw them together into a common route that will allow this nation to go forward using the real talents and skills of all our people? Would that not set aside the prejudice that has existed for far too long against those who dare to soil their hands by being engaged in industry and commerce? [Interruption.] It is no good Government Members heckling me, because if it was not true, we would not be in the position that we

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are in today, and the Deputy Prime Minister would not have undertaken a skills audit and admitted that the nation is in the plight it is in.
Finally, does the Secretary of State agree with me that it is unfortunate that there is any delay in tackling the issue of how to overcome disaffection and alienation in the 14-to-16 age group? We commend the way in which she is dealing with the proposals on the national record of achievement, but it is time to have common cause between the parties in overcoming the alienation and the difficulty that so many young people have in relating to the current curriculum. Is it not time to give young people hope—hope of a job, hope of learning, hope of being trained, and hope of having a future where they can earn and deliver for their families what we took for granted in generations gone by?
Mrs. Shephard: If the hon. Gentleman wanted a common cause, he has not gone the right way about it, in the extraordinary way that he has sought to present the successes of the education policy over the past 16 years or so. Nevertheless, I thank him for his guarded welcome in so far as he has given it. As far as funding is concerned, clearly he will be aware that we are now spending a record amount on education. He will also be aware that there is reference in the report to extra sums for developing GNVQs and the careers service.
I was interested to hear the hon. Gentleman confirm the Labour party's position: that it is against healthy competition—which we believe drives up standards between institutions. It is for that reason, of course, that we have introduced an independent and excellent education and guidance service. It will give independent advice to young people, so that they can choose the appropriate route for themselves.
In relation to staying-on rates, the hon. Gentleman ignored the fact that the Government have been congratulated by the OECD on the improvement in staying-on rates: 90 per cent. of 16-year-olds, 80 per cent. of 17-year-olds and 60 per cent. of 18-year-olds are in full-time education or training. However, we accept that more needs to be done—and that is why we are having the report. Indeed, approximately 83 per cent. of people in our work force have qualifications.
It is unfortunate that the hon. Gentleman seeks to denigrate youth training, when there are excellent outcomes for young people who complete the course. Where we need to take care—this is an issue that is addressed by the report—is on the question of those who drop out of youth training, just as those who drop out of A-levels and out of GNVQs will have their interests addressed by the detail of the report.
I am glad that the hon. Gentleman mentioned the importance of core skills—or key skills, as Sir Ron calls them. This concern has routinely been expressed by employers and by universities. The proposals in the report, which we shall accept, tackle those questions by introducing literacy, numeracy, IT and other skills at every level in the qualifications network. I wish that the hon. Gentleman had given the Government some credit for developing GNVQs and NVQs. GNVQs are very motivating and they are rigorous and demanding, but more needs to be done. That is why I have said specifically that we intend to accept the proposals from Dr. Capey, backed by £30 million to ensure that those reforms of GNVQs are in place.
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The vocational route is, of course, extremely important, but what matters in both academic and vocational routes is the question of standards and rigour. That is what this report underlines.
Several hon. Members rose—
Madam Speaker: Order. May we now have brisk exchanges—questions and responses?
Sir Malcolm Thornton: May I say how much I welcome Sir Ron's report today? It echoes many of the recommendations and considerations that the former Education Select Committee gave to the issue, as my right hon. Friend said in her statement. When she writes to the School Curriculum and Assessment Authority and to the NCVQ to attempt to broker this marriage, will she stress again, as she has just done, the question of rigour and the absolute need for acceptance by all concerned—the teachers, employers, parents and pupils themselves—of the equivalence between the vocational route and the academic route? Without that acceptance, nothing that is proposed will work.
Mrs. Shephard: I thank my hon. Friend for his welcome, which is especially valuable given the distinguished position that he holds as Chairman of the Select Committee on Education. I certainly intend to write to the chairmen to emphasise the importance of rigour. When my hon. Friend has had time to absorb the report, I am sure that he will be glad to discover that the equivalences between the different routes will be given clearly on the backs of the proposed certificates. That will help young people, their parents and teachers, and, above all, employers and admissions tutors.
Mr. Don Foster: I too welcome Sir Ron Dearing's proposals and the Secretary of State's ready acceptance of many of them. I especially welcome proposals that will break down the barriers between academic and vocational courses and qualifications, because they reflect proposals made by Liberal Democrats as long ago as 1992.
In response to the Secretary of State's answer to the hon. Member for Sheffield, Brightside (Mr. Blunkett), does she agree that—notwithstanding existing levels of expenditure—there will be a need for increased expenditure if the proposals are to be successful in raising levels of achievement? Does she also accept that more needs to be done about YTS than merely re-badging and relaunching a scheme in which currently only about 50 per cent. of those on the scheme get any qualification?
Mrs. Shephard: I note that many have claimed authorship of these ideas. It is a pity that those people did not take the opportunity to support the Government in divisions and debates during the past 16 years.
On the question of extra resources, I might have expected that request from the hon. Gentleman. I have already explained that there will be some extra resources to ensure that GNVQs become fully rigorous. Otherwise, I see no need for vast extra resources. We need to re-target and make the current framework more coherent and the qualifications more rigorous. I know that the hon. Gentleman will not have had time yet to consider the

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proposals for national traineeships, but he will find that his anxieties are fully met in the proposals we have set down.
Mr. James Pawsey: May I remind my right hon. Friend of the saying that success has many fathers? We have seen some of the fathers in the Chamber this afternoon.
I hope that my right hon. Friend will disregard the entirely predictable and carping criticism that we have heard from Opposition Members. The overwhelming majority of the nation's parents, students and teachers will warmly welcome this review. It will do much good. I especially liked the reference to A-levels and NVQs. The golden thread that runs through the review is the intention to improve quality in standards and to increase rigour. That all augurs well for further education.
Mrs. Shephard: My hon. Friend is quite correct. The motif running through the entire report is an increased requirement that the system deliver rigorous standards.
Mr. Gerry Steinberg: I too welcome most of Ron Dearing's proposals, and congratulate him on them. I particularly endorse the suggested new national award. The Select Committee, of which I am a member, suggested that some months ago, and I am glad that Sir Ron has taken it up.
There has always been a considerable divide in status between vocational and academic qualifications. Is the right hon. Lady satisfied with the Dearing suggestion that equal status for the two can be achieved?
Mrs. Shephard: The pathways and their destinations are equal but different. The best way to achieve parity of esteem has to be an insistence on the rigour of the vocational route, as the report proposes.
Mr. Nicholas Winterton: I congratulate my right hon. Friend on her statement, especially on her emphasis on quality, standards, rigour and discipline. All four are very important. Is it her view that the proposals in Sir Ron Dearing's review will provide, for traditional and high-tech manufacturing industry and the wealth-creating industries of the United Kingdom, the qualified, motivated young people who are so desperately neccessary for future economic progress?
Mrs. Shephard: My hon. Friend's interest in manufacturing industry is well known. I believe that he will take great comfort from the sections of the report devoted to improvements in standards and rigour in A-levels, and to stretching the most able students. The proposals for mathematics and science may also please him; there are proposed special papers and additional mathematics, and a whole range of measures which I know will be welcomed by my hon. Friend and by the manufacturing industries that he represents so frequently and so ably in this Chamber.
Mr. Dennis Skinner: Is there not a danger of this country becoming besotted with the idea of examinations for all different groups of people? In many
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walks of life, the people who put out fires, those who save lives, and many others who do essential jobs do not get A-levels. Someone can become a Member of Parliament—for what it is worth—without passing any of these high-falutin' exams. Some can even become Prime Minister without a barrel-load of A-levels. People can win Hollywood Oscars without all these exams. Or they can finish up like the nobs opposite—the elitists who send their kids to Eton to be addressed by Vinny Jones. So much for examinations!
Mrs. Shephard: I am not sure what qualifications the hon. Gentleman has. I suppose he would like to say that he was well formed in the university of life—although I think that he has some qualifications hidden away. I thank him for his graceful compliment to my right hon. Friend the Prime Minister; I shall convey it to him.
Mr. Andrew Rowe: I congratulate my right hon. Friend, and endorse the importance of rigour in exporting British education. May I, however, draw to her attention yet again the minority of young people with special learning difficulties who find it difficult to compete in the present structure? There are already signs that the amount of money paid out by TECs for these contracts in 1996–97 is being reduced, even though the money going to the TECs is being maintained. I know how hard Ministers in the Department have worked on this, but it is still a matter of enormous concern.
Mrs. Shephard: I know that my hon. Friend has a special interest in these areas. I refer him to the relevant section of the report, which includes excellent and practical proposals on helping those with special educational needs; and on those who have under-achieved and who need leaning on so that they can get on the qualifications ladder. I feel that my hon. Friend, who has a special concern for this subject, will be encouraged by that part of the report.
Mr. Max Madden: How many youngsters currently in the 16-to-19 age group do not have the job, education or training that they have been promised by the Government for years, coupled with the youngsters between the ages of 14 and 16 who are now dropping out of school?
Does the Secretary of State agree that tens of thousands of young people throughout the country are becoming a growing army of alienated and disaffected youngsters, many of whom are drifting into crime, prostitution and drug dealing, and are wasting their lives? What is being done to give those youngsters some hope, some purpose, some idea why it is worth bothering to pursue the plans that she outlined this afternoon? What are all the agencies that are involved in this sphere doing proactively to try to encourage young people to come forward to benefit from some of the schemes to which she referred?
Mrs. Shephard: The hon. Gentleman will be aware of the youth training guarantee, which seeks to deal with and offer, through training, help to young people who are not in education or a job. I also announced that we shall consult next month on proposals for 14 to 16-year-olds, and bring the workplace nearer to the classroom. The hon. Gentleman is right—indeed, this matter is covered in the report—that there is a wastage of under-achievers, of young people who are demotivated.

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The key must be good teaching and the national curriculum. There is no question about that. The proposals for 14 to 16-year-olds, plus the entry arrangements that are described in the report, which will bring together some of the agencies that the hon. Gentleman mentioned, should do a great deal to reduce that regrettable wastage.
Mr. Peter Griffiths: Will my right hon. Friend accept—from someone who spent 30 years in teaching—my congratulations on her repeated use of the words "rigour" and "rigorous"? Will she assure us this afternoon that those words, in addition to applying to vocational training and academic skills for examination, will also apply immediately and effectively to the key skills of mathematics and English, on which everything else depends?
Mrs. Shephard: I can reassure my hon. Friend. I have already described what is proposed in terms of core skills. If my hon. Friend looks at the proposals for mathematics, he will be greatly encouraged, and I hope enthused.
Mrs. Bridget Prentice: I particularly welcome the part of Sir Ron Dearing's report that refers to careers guidance, but was rather puzzled by the Secretary of State's reference to careers guidance and her use of the word "rigour". Can she assure us, despite the dogmatic way in which she has tried to privatise the careers service around the country, tumbling it into turmoil across England and Wales, that there will be consistency in the careers service, and that the rigour and quality that our young people deserve will be assured?
Mrs. Shephard: There will be greater consistency as a result of the new arrangements than there has ever been before, with free-standing careers services across the country free to develop services in the way in which they wish. There will be higher uniform specifications. I truly believe that the standard of service will improve.
Sir Wyn Roberts: I compliment my right hon. Friend on commissioning, as well as Sir Ron Dearing on producing, this excellent report, in particular the emphasis that is given to core skills as well as standards, because it is only thereby that qualifications will achieve parity of esteem. In particular, I welcome the extension of the national record of achievement. Does she agree that that is one means whereby young people can be encouraged to have pride in their achievement?
Mrs. Shephard: The national record of achievement has indeed been fairly well used by schools, but we want to extend its use so that it will encourage lifetime learning, and therefore it needs a proper relaunch. It needs to be made more specific. That is what is proposed in the report.
Mr. Alan Howarth: Does the Secretary of State agree that, for many young people who were given to understand that this was what they must do, because A-level was the gold standard, it has been an educationally unrewarding experience to pursue perhaps one or two A-levels to a mediocre standard? For far too many young people, the narrowing of their intellectual horizons at the age of 16 that A-levels have meant has been false gold.
Mrs. Shephard: Certainly the number of dropouts from A-level courses is highly regrettable. It is very
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wasteful in terms of the young person concerned, the school and resources overall. The hon. Gentleman will be encouraged by the requirements of the new national diploma, which are two A-levels or a GNVQ as well as the study of four subject areas and the obtaining of core skills. That surely represents a practical broadening of education, retaining the rigour and standards of A-level and GNVQ, without destabilising the whole system.
Sir Patrick Cormack: Everyone who is concerned about standards will have cause to be grateful to Sir Ron Dearing and my right hon. Friend. Does my right hon. Friend agree, however, that one of the crucial tests of the success of the reforms will be whether undergraduates are able to master the written and spoken English language? There is great concern about that.
Mrs. Shephard: As always, my hon. Friend makes a telling point. As he will know, we have proposed a return to the separate recording of spoken English in GCSEs. Specific proposals for mathematics make clear our intention to introduce separate recording of skills in calculation, estimation and statistics. That, I think, will be a great help. The report contains a good deal about the improvement of standards in those basic skills at every level; it is a very important component, about which I am enormously enthusiastic.
Mr. Mike Hall: I welcome the Dearing report. May I draw the Secretary of State's attention to Sir Ron's criticism of the youth training scheme? Does she accept that criticism? If she does, is she prepared to replace the scheme with a scheme that gives our young people high-quality training and access to modern apprenticeships that will enable them to find secure full-time employment?
Mrs. Shephard: I have already spoken about youth training. It should not be forgotten that 71 per cent. of those who complete their courses achieve qualifications or jobs. That is not to be sneered at. The report, however, proposes a system of national traineeships, entry to which will require some form of qualification. A number of other reforms are proposed, which I would expect to find favour with the hon. Gentleman if he is really concerned about this age group.
Mr. Harry Greenway: I warmly welcome the step forward that the report represents. Does my right hon. Friend agree that diversity in NVQs, GNVQs and A-levels strengthens the system and increases opportunities for 16 to 19-year-olds? May I invite her to disagree with the hon. Member for Sheffield, Brightside (Mr. Blunkett), who said that competition between institutions was damaging for that age group? Does she not agree that the assisted places scheme, sixth form colleges and tertiary colleges, for instance, offer diversity of provision and are very strong in themselves?
Mrs. Shephard: We certainly think that diversity helps to drive standards up, by, among other things, encouraging competition between institutions. One of the aims of the report, however, is to introduce coherence to the framework of qualifications. Notwithstanding

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diversity, such coherence is needed—not least for the sake of employers, but also for the sake of young people, their parents and those who teach them.
Lady Olga Maitland: I welcome the commitment to strengthen careers education and guidance. Will my right hon. Friend carefully monitor progress and check whether opportunities in the armed services are put to young people? Yesterday, I visited Bassingbourn barracks of the Army Training Regiment, where young people make their first entry to the service. When I spoke to some of the young people, I discovered that they had not heard about opportunities in the armed services during their years in school.
Mrs. Shephard: My hon. Friend will be aware that, until very recently, the armed services had their own systems of recruitment, which, in a sense, were rather separate from careers arrangements that are made centrally. Perhaps my hon. Friend will be reassured to know that I recently took part in a joint launch with my hon. Friend the Minister of State, Ministry of Defence on a project about careers in the armed services. Further work is to be launched shortly after the Easter recess. I think that I can reassure my hon. Friend on all points.
Mr. Nigel Forman: From everything that my right hon. Friend has said, it seems that this is a sensible package, as one would expect, since it is the brainchild of Sir Ron Dearing. Does she agree that, if we are serious about parity of esteem, there seems to be a good case for merging at an early date the National Council for Vocational Qualifications and the School Curriculum and Assessment Authority? Will she take note of a very important point that has not yet been made—that Sir Ron Dearing deserves a peerage?
Mrs. Shephard: My hon. Friend will know from the document that the merging of SCAA and NCVQ is proposed. I want to consult on that. There are two proposals—one for a merger and one for a division of the functions—and we wish to consult on the alternatives. Such a proposal makes much sense, but it would create a very big organisation. We need to be certain that industry and academic interests would be happy with that. In terms of my hon. Friend's second suggestion, I am sure that the Hansard record can be brought to the attention of absolutely anybody who would like to see it.
Mr. Bryan Davies: Will the Secretary of State recognise that the Opposition have
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every right to draw a distinction between our whole-hearted support for the main proposals in the Dearing report, on which we congratulate Sir Ron, and our anxiety about her response to what now needs to be done? Is it not obvious that, if we are to offer young people a full range of opportunities across the academic and vocational spectrums, we will need greater co-operation between providers at local level than her view—which is that these institutions can carry on in the damaging and somewhat dysfunctional competition in which they engage at present—would suggest?
Secondly, will the right hon. Lady also recognise the battering that this sector received from the Chancellor and from her last year in the November Budget? It so grievously affected sixth form colleges and FE colleges that some of them are in severe financial difficulties. For the right hon. Lady to give effect to Sir Ron Dearing's proposals, it will be necessary for her to ensure that there is no repeat of that onslaught in the forthcoming November Budget—if there should be one from this Government.
Mrs. Shephard: That was a rather sour, disappointing little response by the hon. Gentleman, I must say. What a pity, at the end of what was otherwise a rather decent session.
The further education sector was protected in the last public expenditure survey round. TEC resources went up by 5 per cent., and we are spending a record amount on education. I also remind the hon. Gentleman, because he does need reminding, as do all his hon. Friends, that there is not necessarily a connection between rigour and standards and what is spent. That has been the consistent position of the Government and of Conservative Members.
I suggest to the hon. Gentleman that he might spend an improving hour reading the document and examining the Government's proposals in this very important sphere. He could then perhaps come back with a slightly more encouraging response.

BILL PRESENTED
  SEXUAL OFFENCES AGAINST CHILDREN (REGISTERS OF OFFENDERS)
  Ms Janet Anderson presented a Bill to make provision for the maintenance of registers of persons who are convicted of certain sexual offences against children; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday, 29 March 1996 and to be printed. [Bill 91.]

  Part-Time Employees (Equal Remuneration)
  4.14 pm
  Mr. Don Foster: I beg to move,
  That leave be given to bring in a Bill to ensure that part-time employees have entitlement to remuneration on a pro rata basis with full-time employees.
  This Bill would ensure that part-time employees are paid no less—on a pro rata basis—than full-time employees for jobs that are the same and carry similar responsibilities. It would further ensure that benefits such as sick pay, pensions, holiday pay and maternity or paternity provision are awarded on the same pro rata basis.
  The world of work is changing. The nine-to-five, Monday till Friday generation is slowing passing, and will soon be confined to the annals of history. The future of the world of work is the flexible labour force and the part-time worker.
  In the past few decades, we have seen a massive increase in the number of part-time workers. In 1971, there were just over 3 million people in part-time work, which was 15.5 per cent. of the work force. The understanding of the day was that those people were predominantly female workers who were supplementing family income by carrying out relatively low-skilled jobs for low wages, or students and teenagers who were earning a little extra pocket money. Many employers thought that giving those people jobs was doing them a favour, and that it was therefore reasonable to offer part-time workers no protection and low wages.
  The number of part-time workers has doubled in the past 25 years. There are now more than 6 million part-time workers, which is nearly a third of the work force, and the number is increasing. It is predicted that, by 2001, nearly 7.5 million workers will be employed in part-time work.
  Part-time workers are fast becoming the linchpin of our economy. In fact, the reduction in unemployment in the past two years has been based on creation of part-time jobs. Since 1993, 500,000 part-time jobs but only 400,000 part-time jobs have been created. In my constituency, almost three in 10, or 28 per cent., of workers work part-time. Among the female work force, nearly half the workers now work part-time. Most other constituencies have similar statistics for part-time working.
  It would be absurd, with so many part-time workers, to perpetuate the claim that part-time workers are teenage waiters and mums who have kids at school and want to earn pin money. Part-time workers today are employed in every sector of industry and commerce, as well as in more traditional service sector occupations and on the factory floor. They are professionals, specialists and managers. They care about their careers. They want to fulfil their potential in the work force, and, obviously, they care about the wages and benefits they receive.
  It would be extremely foolhardy to ignore the skills, spending power and social significance of this sector of the work force, yet millions of part-time workers still receive inadequate employment protection and second-rate wages. Six out of 10 part-timers receive a lower hourly wage than their full-time colleagues, and—on average, on a pro rata basis—they receive less than half the fringe benefits that full-timers receive.
  1044
  Part-timers account for about three quarters of Britain's low-paid workers. A recent Trades Union Congress study showed that 77 per cent. of female part-time workers-3.7 million women—and 72 per cent. of male part-time earners, which is 800,000 men, earn below the Council of Europe's decency threshold of £5.88 per hour, with many workers earning significantly less.
  In recent weeks, my local newspaper, The Bath Chronicle, has advertised many part-time jobs, including evening and weekend catering assistants' jobs at £3 an hour; part-time work as a catering/kiosk assistant, also at £3 an hour; and a cleaner/general assistant at £2.90 an hour. Today, at the Bath jobcentre, the unemployed can consider the merits of part-time evening work as an elderly person's carer at £3.30 an hour; shoe retailing at £3.28 an hour; pub cleaning at £3.01 an hour; or waitressing at £3 an hour. Those are not figures of which we can be proud, and they are not indicative of a nation at ease with itself. Good employment practice does not mean short-changing employees. A thriving economy does not have millions of workers living below the breadline.
  Wage discrimination is currently practised in many forms. An employer may simply pay his part-timers less than the going rate, or may decide not to pay a part-tuner the going rate for overtime, commission or bonus pay. He may fail to give part-timers the same incremental rates or pay increases as full-time employees.
  Despite some welcome amendments to United Kingdom legislation designed to bring our laws into line with law on sex discrimination and European Union law, none of the practices I have outlined is illegal. I believe that such discrimination cannot be allowed to continue.
  The cost of paying such a large number of workers lower wages is profound. There is a cost to the state, which is forced to subsidise low wages with income support. There is a cost to the nation's skill base, because many employers decide that it is not worth investing money in training low-paid, part-time workers. There is also a cost to human life as many young people are dissuaded from entering the low-paid, part-time sector, and some turn to crime, drug dealing and the thriving black market.
  The Bill would make it illegal for an employer to pay part-time workers lower wages, pro rata, than full-time workers if they are engaged in the same work. It would also make it illegal for employers not to pay part-time workers the same fringe benefits as those received by full-time employees, again pro rata, simply because they are part-timers.
  Some will no doubt argue that that would place a burden on employers and lead to unemployment. The reality is that granting equal rates of remuneration to part-time workers would have merely a marginal effect on the total pay bill. A report by the Policy Studies Institute entitled "Value for Money" recently claimed that giving Britain's 6 million part-time workers equal rights with full-time workers would cost just half of 1 per cent. of the total annual pay bill. That is significantly less than the £1.8 billion of perks and expenses pocketed by the United Kingdom's top company directors—at least according to the Inland Revenue's figures.
  The costs involved would be more than offset by the increase in productivity brought about by job security, better training and increased motivation—all provided by

  1045
  equal pay legislation. Such a step would save the state money and ensure that our work force are motivated, skilled and secure. It would prevent us from entering the next millennium with an impoverished work force.
  The Bill has received the broad support of the TUC, the National Association of Citizens Advice Bureaux, and the Equal Opportunities Commission. More importantly, it is supported by more than 6 million part-time workers in this country and by the majority of full-time workers.
  I hope that the House will support the Bill, and send a clear message to Britain's part-time workers that their efforts are valued and respected. Part-time should not mean second best. I commend the Bill to the House.
  Question put and agreed to.
  Bill ordered to be brought in by Mr. Don Foster, Mr. Denis MacShane, Mr. Nick Harvey, Mr. Chris Davies, Mr. Malcolm Bruce, Mr. David Rendel, Mr. David Chidgey, Mr. Roger Berry, Mrs. Diana Maddock, and Mr. Archy Kirkwood.

  PART-TIME EMPLOYEES (EQUAL REMUNERATION)
  Mr. Don Foster accordingly presented a Bill to ensure that part-time employees have entitlement to remuneration on a pro rata basis with full-time employees: And the same was read the First time; and ordered to be read a Second time upon Friday 10 May and to be printed. [Bill 92.]
WAYS AND MEANS
  Finance Bill

    HYDROCARBON OIL (USE OF KEROSENE AND MIXING OF REBATED OIL)
    Resolved,
    That provision may be made in the Finance Bill with respect to—

    (a) cases where kerosene is used as fuel or taken into a fuel supply; and

    (b) cases where a substance is mixed with rebated hydrocarbon oil.—[Mr. Brandreth.]

    PERSONAL PENSION SCHEMES
    Resolved,
    That provision may be made in the Finance Bill amending sections 633(1)(e) and 637A of the Income and Corporation Taxes Act 1988.—[Mr. Brandreth.]

  Orders of the Day

    Finance Bill
    As amended (in the Committee and in the Standing Committee), considered.
    Ordered,
    That the Bill, as amended, be considered in the following order, namely: New Clauses, amendments relating to Clauses 1 to 29, Schedule 3, Clauses 30 to 65, Schedule 4, Clauses 66 to 195, New Schedules, amendments relating to Schedules 1 and 2 and Schedules 5 to 38.—[Mr. Brandreth.]

  New clause 12

    MISUSE OF REBATED KEROSENE
    `.—(1) The Hydrocarbon Oil Duties Act 1979 shall be amended as mentioned in subsections (2) to (5) below.
    (2) In section 11(1) (rebate on heavy oil) for "and 13" there shall be substituted "13, 13AA and 13AB".
    (3) In section 12(2) (restriction on use of rebated heavy oil for road vehicles), after "allowed" there shall be inserted "(whether under section 11(1) above or 13AA(1) below)".
    (4) After section 13 there shall be inserted the following sections—

    Restrictions on use of rebated kerosene
    13AA.—(1) If, on the delivery of kerosene for home use, it is intended to use the kerosene as fuel for—

    (a) an engine provided for propelling an excepted vehicle, or

    (b) an engine which is used neither for propelling a vehicle nor for heating,
    a declaration shall be made to that effect and thereupon rebate shall be allowed at the rate for rebated gas oil which is then in force instead of at the rate then in force under section 11(1)(c) above.

    (2) Subject to subsection (3) below, no kerosene on whose delivery for home use a rebate at the rate given by section 11(1)(c) above has been allowed shall—

    (a) be used as fuel for an engine provided for propelling an excepted vehicle;

    (b) be used as fuel for an engine which is used neither for propelling a vehicle nor for heating; or

    (c) be taken into the fuel supply of an engine falling within paragraph (a) or (b) above.

    (3) Subsection (2) above does not apply to any quantity of kerosene in respect of which there has been paid to the Commissioners an amount equal to duty on the same quantity of gas oil at the rate for rebated gas oil which is in force at the time of the payment.
    (4) A payment under subsection (3) above shall be made in accordance with regulations made under section 24(1) below for the purposes of this section.
    (5) For the purposes of this section and section 13AB below

    `excepted vehicle' means a vehicle which is an excepted vehicle under any provision of Schedule 1 to this Act; and

    `kerosene' means heavy oil of which more than 50 per cent.by volume distils at a temperature of 240° C or less.

    (6) For the purposes of this section and section 13AB below the rate for rebated gas oil which is in force at any time is the rate of duty which at that time is in force under section 6(1) above in the case of heavy oil as reduced by the rate of rebate allowable at that time under section 11(1)(b) above.

    Penalties for misuse of kerosene
    13AB.—(1) If a person uses kerosene in contravention of section 13AA(2) above—

    (a) the Commissioners may recover from him, in respect of the quantity of kerosene used, an amount equal to duty on the same quantity of gas oil at the rate for rebated gas oil which is in force at the time of the contravention;

    (b) his use of the kerosene shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties); and

    (c) if he uses the kerosene with the relevant intent, he shall be guilty of an offence.

    (2) If a person is liable for kerosene being taken into a fuel supply of an engine in contravention of section 13AA(2) above—

    (a) the Commissioners may recover from him, in respect of the quantity of kerosene taken into the fuel supply, an amount equal to duty on the same quantity of gas oil at the rate for rebated gas oil which is in force at the time of the contravention;

    (b) his becoming so liable shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties); and

    (c) if he has the relevant intent in relation to the kerosene being taken into the fuel supply, he shall be guilty of an offence.

    (3) For the purposes of subsection (2) above, a person is liable for kerosene being taken into a fuel supply of an engine if at the time—

    (a) he has the charge of the engine; or

    (b) subject to subsection (4) below, he is the owner of the engine.

    (4) If a person other than the owner is for the time being entitled to possession of the engine, that other person and not the owner is liable.
    (5) If—

    (a) a person supplies kerosene having reason to believe that it will be put to a particular use, and

    (b) that use is one which, if a payment is not made under subsection (3) of section 13AA above, will contravene subsection (2) of that section,

    his supplying the kerosene shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties) and, if he makes the supply with the relevant intent, he shall be guilty of an offence.
    (6) In this section 'the relevant intent' means the intent that the restrictions imposed by section 13AA(2) shall be contravened.
    (7) A person guilty of an offence under this section shall be liable—

    (a) on summary conviction, to a penalty of the statutory maximum, or to imprisonment for a term not exceeding 6 months, or to both;

    (b) on conviction on indictment, to a penalty of any amount, or to a term of imprisonment not exceeding 7 years, or to both.

    (8) Any kerosene falling within subsection (9) or (10) below is liable to forfeiture.
    (9) Kerosene falls within this subsection if it is taken into a fuel supply in contravention of section 13AA(2) above.
    (10) Kerosene falls within this subsection if—

    (a) it has been supplied in circumstances in which there is reason to believe that it will be put to a particular use; and

    (b) that use is one which, if payment is not made under subsection (3) of section 13AA above, will contravene subsection (2) of that section."

    (5) In section 24 (control of use of duty-free and rebated oil)—

    (a) in subsection (1), after "section 13A" there shall be inserted "section 13AA"; and

    1048

    (b) in subsection (2), after "section 12" there shall be inserted "or section 13AA".

    (6) This section shall have effect in relation to cases where kerosene is—

    (a) used as fuel, or

    (b) taken into a fuel supply,
    on or after such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint.'—[Mr. Heathcoat-Amory.]

    Brought up, and read the First time.
    Motion made, and Question proposed, That the clause be read a Second time.—[Mr. Heathcoat-Amory.]
    Madam Speaker: With this, it will be convenient to discuss the following: Government new clause 11—Mixing of rebated oil.
    Government amendment No. 50.
    4.25 pm
    Ms Dawn Primarolo: I hoped that the Paymaster General would give a little more explanation of new clauses 11 and 12. They are anti-avoidance measures with regard to the mixing of fuels, in particular diesel.
    I would be grateful if the Paymaster General explained when the avoidance was discovered, how much revenue was at risk, what the review procedure is to ensure that the measures work, and how the Treasury will monitor the practice of the mixing of fuels, to ensure that the illegal practice that is identified by the two new clauses is firmly dealt with. In the final paragraph of a letter to me on 20 March, the right hon. Gentleman explained that provisions would be enacted if the illegal practice continued and the penalties were not sufficient. I should therefore be grateful if he could answer those questions.
    The Paymaster General (Mr. David Heathcoat-Amory): I am happy to oblige the hon. Member for Bristol, South (Ms Primarolo).
    I shall describe new clause 11 first. Its purpose is to allow Customs and Excise to charge duty under the Hydrocarbon Oil Duties Act 1979, when oils of different descriptions are mixed after the normal duty point and the duty liability of the resultant mixture exceeds that originally paid. The action has been made necessary by an increase in deliberate and accidental mixing of a variety of fuels, especially kerosene with diesel road fuel and kerosene with rebated gas oil, sometimes called red diesel.
    That has highlighted the fact that, except in limited circumstances, there is no current provision to recover duty if mixing takes place after the normal duty point. Although that practice is not widespread and therefore—to answer the hon. Lady's question—major avoidance is not taking place, it is wise to anticipate a possible extension of the practice or similar schemes because, if unchecked, they could have a substantial effect on the revenue yield.
    The purpose of new clause 12 is to impose a positive rate of duty on kerosene when it is used, not as heating oil—when it will continue to have, in effect, a zero rate of tax—but as motor fuel in off-road vehicles or in certain other excepted vehicles, such as those used for road construction. The new clause is intended to counter the

    1049
    increasing use of such kerosene as an extender or alternative to gas oil in those vehicles. Some oil distributors, especially in Northern Ireland, have been taking advantage of the fully rebated rate of duty on kerosene and have been adding it at a ratio of about 30 per cent. to gas oil. If that mixture is in such a proportion as to make the resulting liquid, effectively, kerosene, there is currently no charge to duty and recovery is not possible.
    There is also another type of avoidance, whereby neat kerosene is mixed with small quantities of lubricating oil. Such practice is also not widespread and we estimate that the revenue loss is minimal, but unchecked it could become a major drain on the Revenue.
    The reason why I did not volunteer those explanations is that, as the hon. Member for Bristol, South said, I wrote to her. The House will find the new clauses uncontentious and sensible measures to take in anticipation of a misuse, either of mixing fuels after the normal duty point or of kerosene in off-road vehicles and the like.
    4.30 pm
    Sir James Molyneaux: Although I have no wish to detain the House, the Minister's mention of Northern Ireland ought to be amplified a little further. The fact that Northern Ireland is singled out for some of those irregular and sometimes rather dubious practices arises mainly not from the basic dishonesty of the Northern Ireland population generally, but from all sorts of devices and practices that have been going on for years, in what we call the smuggling country on both sides of the land frontier of the UK. The fact that Northern Ireland has the only UK land frontier within its territory causes such malpractice. The Minister will be aware of the smuggling of oil and other commodities that takes place in that band of what is sometimes called, even by natives, bandit country. I know that he and his hon. Friends have in the past been very quick to identify such exploitation and cheating of the Revenue out of its rightful moneys.
    There should not be any reluctance on the part of the sovereign Government on the other side of the kingdom's land frontier to do their best to tighten up their measures and assist the Minister's Customs and Excise officers in that region, because only this week the Irish Agriculture Minister was issuing strong threats to seal the frontier on account of mad cow disease. What can be done for one purpose can surely be done for all others. With that timely observation, I shall conclude.
    Mr. Heathcoat-Amory: Although such practices occur not only in Northern Ireland, they are especially prevalent there, as the right hon. Member for Lagan Valley (Sir J. Molyneaux) acknowledged. I am afraid that it is true that, when we shut down one type of smuggling or excise abuse, the same people can exploit other loopholes. The Northern Ireland customs and excise service has generally productive discussions and interchanges with the parallel service in the Republic, where there is a common interest in preventing racketeering or excise abuse. I take it from the right hon. Gentleman's remarks that he nevertheless approves of our attempt to close a potential loophole, which might be exploited by paramilitary organisations or the criminal fraternity in general.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

  New clause 11

    MIXING OF REBATED OIL
    '.—(1) The Hydrocarbon Oil Duties Act 1979 shall be amended as mentioned in subsections (2) to (4) below.
    (2) In section 20 (contaminated or accidentally mixed oil), after subsection (3) there shall be inserted the following subsection—
    "(4) The power to make a payment to a person under subsection (2) above in relation to oils that have become accidentally mixed does not apply in relation to a mixture in respect of which he is liable to pay duty under section 20AAA below."
    (3) After section 20A there shall be inserted the following sections—

    Mixing of rebated oil
    20AAA.—(1) Where—

    (a) a mixture which is leaded or unleaded petrol is produced in contravention of Part I of Schedule 2A to this Act, and

    (b) the mixture is not produced as a result of approved mixing,
    a duty of excise shall be charged on the mixture.

    (2) Where—

    (a) a mixture of heavy oils is produced in contravention of Part II of Schedule 2A to this Act,

    (b) the mixture is not produced as a result of approved mixing, and

    (c) the mixture is supplied for use as fuel for a road vehicle or an excepted vehicle,
    a duty of excise shall be charged on the mixture.

    (3) The person liable to pay the duty charged under subsection (1) above is the person producing the mixture.
    (4) The person liable to pay the duty charged under subsection (2) above is the person supplying the mixture.
    (5) The Commissioners may exempt a person from liability to pay duty charged under this section in respect of the production or supply of a mixture if they are satisfied—

    (a) that the mixture has been produced or (as the case may be) supplied accidentally; and

    (b) that, having regard to all the circumstances, the person should be exempted from liability to pay the duty.

    (6) Part III of Schedule 2A to this Act makes provision with respect to rates and amounts of duty charged under this section.
    (7) In this section—

    `approved mixing' has the meaning given by section 20A(5) above; and

    `excepted vehicle' means a vehicle which is an excepted vehicle under any provision of Schedule 1 to this Act.

    Mixing of rebated oil: supplementary
    20AAB.—(1) A person who—

    (a) produces a mixture on which duty is charged under section 20AAA(1) above, or

    (b) supplies a mixture on which duty is charged under section 20AAA(2) above,
    must notify the Commissioners that he has done so within the period of seven days beginning with the date on which he produced or (as the case may be) supplied the mixture.

    (2) A person is not required to give a notification under subsection (1) above if, before he produced or (as the case may be) supplied the mixture, he notified the Commissioners that he proposed to do so.
    (3) Notification under subsection (1) or (2) above must be given in such form and in such manner, and must contain such particulars, as the Commissioners may direct.
    (4) Subject to subsection (7) below, where it appears to the Commissioners—

    (a) that a person has produced or supplied a mixture on which duty is charged under section 20AAA above, and

    (b) that he is the person liable to pay the duty,
    they may assess the amount of duty due from him to the best of their judgement and notify that amount to him or his representative.

    (5) An assessment under subsection (4) above shall be treated as if it were an assessment under section 12(1) of the Finance Act 1994.
    (6) The Commissioners may give a direction that a person who is, or expects to be, liable to pay duty charged under section 20AAA above—

    (a) shall account for duty charged under that section by reference to such periods (`accounting periods') as may be determined by or under the direction;

    (b) shall make, in relation to accounting periods, returns in such form and at such times and containing such particulars as may be so determined;

    (c) shall pay duty charged under that section at such times and in such manner as may be so determined.

    (7) The power to make an assessment under subsection (4) above does not apply in relation to a person who is for the time being subject to a direction under subsection (6) above.
    (8) Where any person—

    (a) fails to give a notification which he is required to give under subsection (1) above, or

    (b) fails to comply with a direction under subsection (6) above,
    his failure shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties)."

    (4) After Schedule 2 there shall be inserted the Schedule set out in Schedule (Mixing of rebated oil) to this Act.
    (5) This section and Schedule (Mixing of rebated oil) to this Act shall have effect in relation to—

    (a) the production on or after the appointed day of a mixture which is leaded or unleaded petrol; and

    (b) the supply on or after the appointed day of a mixture of heavy oils;
    and "the appointed day" here means such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint.'—[Mr. Heathcoat-Amory]

    Brought up, read the First and Second time, and added to the Bill.

New clause 5
  MATERIAL REMOVED FROM WATER

    Exemptions
    .—(1) A disposal is not a taxable disposal for the purposes of this Part if it is shown to the satisfaction of the Commissioners that the disposal is of material all of which—

    (a) has been removed (by dredging or otherwise) from water falling within subsection (2) below, and

    (b) formed part of or projected from the bed of the water concerned before its removal.

    (2) Water falls within this subsection if it is—

    (a) a river, canal or watercourse (whether natural artificial), or

    (b) a dock or harbour (whether natural or artificial).

    3) A disposal is not a taxable disposal for the purposes of this Part if it is shown to the satisfaction of the Commissioners that the disposal is of material all of which—

    (a) has been removed (by dredging or otherwise) from water falling within the approaches to a harbour (whether natural or artificial),

    (b) has been removed in the interests of navigation, and

    (c) formed part of or projected from the bed of the water concerned before its removal.

    (4) A disposal is not a taxable disposal for the purposes of this Part if it is shown to the satisfaction of the Commissioners that the disposal is of material all of which—

    (a) consists of naturally occurring mineral material, and

    (b) has been removed (by dredging or otherwise) from the sea in the course of commercial operations carried out to obtain substances such as sand or gravel from the seabed:.—[Mr. Heathcoat-Amory.]

    Brought up, and read the First time.
    Mr. Heathcoat-Amory: I beg to move, That the clause be read a Second time.
    Madam Deputy Speaker (Dame Janet Fookes): With this, it will be convenient to discuss the following: Government new clause 6—Mining and quarrying.
    Government new clause 7—Pet cemeteries
    Government new clause 8—Exemptions: power to vary.
    Government amendment No. 12.
    Amendment No. 70, in clause 59, page 40, line 34, at end insert—
    '(9) Subsection (1)(b) above shall not apply where the material is deposited in an underground cavity created by the controlled solution mining of salt and the material arises from the processing of naturally occurring minerals to remove their naturally occurring impurities and the deposit of the material in such underground cavity will not give rise to environmental pollution and, due to the natural source of such material, there is no scope to reduce the quantity of such material and there is no more environmentally benign way of dealing with the material.'.
    Government amendment No. 13.
    Mr. Heathcoat-Amory: The House will recall from debates at earlier stages of the Bill that we are introducing a landfill tax, which will come into effect on 1 October. It aims to reduce our reliance on landfill, and will promote more sustainable waste disposal practices, especially by encouraging the reuse and recycling of material—and, indeed, waste reduction. It will also ensure that waste disposal costs reflect the full environmental impact of landfill.
    The revenue from the new tax will be used to make a further cut in employers' national insurance contributions, which have already fallen from 13.5 per cent. in 1979 to 10.2 per cent. now. A further cut costing about £0.5 billion will be made in April next year, also funded by revenue from the landfill tax.
    It is worth recalling that the total reduction in national insurance contributions since 1979 is now worth about £7.85 billion a year. That represents a direct relief on employment costs, and it partly explains why our employment record is better than those of most of our European competitors.
    or New clause 5 and its associated amendments and other new clauses arise from discussions that we had in Standing Committee, and with the trade, with other

    1053
    interested potential taxpayers and other groups. Their effect is to exempt dredgings and waste from mining and quarrying operations, and to introduce a power to vary the scope of the exemptions by Treasury order. We specifically intend to use that power to exempt historically contaminated land from the tax.
    I mentioned dredgings, and shall say a little more about that subject, because it interested the House and the Committee in earlier debates. New clause 5 provides that a disposal is not taxable if the material being disposed of consists entirely of material dredged from
    "a river, canal or watercourse",
    a harbour or suchlike. Most dredgings would not fall to be taxed in any case, because the material is often disposed of at sea or on land, rather than in a landfill site. But some material is disposed of in licensed landfill sites, and so would otherwise fall to be taxed.
    We are exempting such material because the waste is naturally occurring, and exists to be dredged only because of the operation of natural forces. Moreover, dredging has a beneficial effect on navigation and in preventing flooding. It produces a relatively easily definable category of waste, and I am therefore happy to confirm the exemption by introducing the new clause to give it practical effect.
    New clause 6 exempts waste from mines and quarries. It was never our intention to tax such waste unless it was disposed of in licensed landfill sites, but it became apparent following discussions with the industry that quite a tonnage of such waste is disposed of in licensed sites and would therefore be taxed. The exemption will apply to all naturally occurring waste arising from mining and quarrying operations. The exemption will not apply where waste arises from a process separate from mining or quarrying operations, or if it arises from a process that permanently alters the waste's chemical characteristics.
    The next major category that I want to mention is contaminated land. Customs and Excise has consulted widely on the matter with the agencies involved in clearing up contaminated land. A consultation exercise took place on a draft clause that tried to define a category of contaminated land, linking it to the necessary planning approval, to provide an objective criterion for the eligibility for exemption. But it became clear that too many clearance projects do not require planning permission, and we have decided instead upon a different approach. The exemption will apply to waste from the clearance of contaminated land where the clearance of all or part of the contamination is necessary to allow the land to be used for the intended purpose when the development is complete. The exemption will apply to waste arising from the reclamation of the land, but current polluters will not be able to benefit from it.
    That will be done by a system of certification by customs, and we want to consult further on the details. That means that the details of the exemption cannot be brought forward by primary legislation. New clause 8 enables the Treasury to make orders to add to, delete or vary the definition of waste exempt from the tax. We intend to use the order-making power because it may be necessary from time to time to alter the exemptions—particularly at the margins—in the light of technical or other developments, or to iron out difficulties that may
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    arise during the operation of the tax. But it will be used specifically to bring in an exemption for historically contaminated land, and a draft of the order to do that will be ready early next month. Subject to the views expressed, we hope to be able to lay the order in June—well before 1 October, the date on which the tax comes into effect.
    Ms Primarolo: I should like the Paymaster General to clarify a number of issues with regard to the new clauses. I am grateful to him for his explanation of the new clauses, which arise from our debates in Committee.
    I should like the right hon. Gentleman to explain the use and meaning of the word "watercourse" in new clause 5(2)(a). Chambers dictionary defines a watercourse as
    "a channel through which water flows or has flowed".
    That would seem to exclude lakes, ponds and reservoirs, for instance. Is that the Government's intention? If so, what is their justification for doing so?
    New clause 6 deals with mining and quarrying, but it appears that the problems with salt mining that were raised in Committee by the hon. Member for Beaconsfield (Mr. Smith) are not covered by the new clause. If I am reading the new clause incorrectly, perhaps the Paymaster General can explain how they would be covered.
    4.45 pm
    With regard to the exemption powers in new clause 8 and the development of historically contaminated land, we discussed in Committee contaminated land in inner cities, which might be developed for housing projects—a burden would be placed on the developers prior to the development. I understand the difficulties in refining a definition to deal with that issue, but there are a number of related problems. I shall put them before the House, bearing in mind the fact that the Paymaster General said that there would be further consultation on the details of the way in which the exemptions would work. The powers seem very wide at the moment, but if I heard the right hon. Gentleman correctly, he said that the exemptions could vary at the margins according to the development of technologies. If I misheard him, I apologise.
    The Environmental Industries Commission, in its representations on the new clause—I presume that it has made the same representations to the Paymaster General—made a series of important points that we need to consider. One was that, if we move the contamination from the historically contaminated land into landfill, we shall not be dealing with the contamination, but simply moving it. The EIC points out that companies are emerging in the United Kingdom which offer on-site remediation technologies and that, as was said in the introduction to the new clauses, the point of the landfill tax is to encourage waste reduction and recycling. The tax is supposed to shape the behaviour of others.
    Contaminated land is a substantial problem in Britain, as well as throughout Europe, particularly as most of it is in inner cities and, while it is not dealt with, pressure will continue to be put on green-field sites and sites elsewhere. It is estimated that there are about 50,000 to 100,000 contaminated sites in the United Kingdom alone. I am keen to ensure, as I am convinced that the Paymaster General will be, that we do not undermine the development of the industries that deal with the remediation of contaminated land in what is a very volatile market in the United

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    Kingdom, by giving developers a route to avoid dealing with the contamination on site and simply allowing free tipping on landfill sites.
    Clearly, to encourage those environmental technologies to develop is crucial. Indeed, the Government recognise that, because the Department of the Environment has been encouraging the use of advanced remediation techniques in place of landfill, and Government initiatives, such as the Biotechnology Means Business programme, have been trying to do exactly that. If the House gives too wide a power on exempting historically contaminated land, it will be in danger of running counter to those objectives, and I am sure that that is not the intention.
    The royal commission on environmental pollution and the Office of Science and Technology have recognised that greater emphasis should be placed on the commercial application of environmentally friendly technologies that can deal with contaminated sites. We are discussing historically contaminated sites only. The royal commission's call for urgent action to decontaminate urban sites could be undermined by proposals that are too widely drawn.
    The Government are in danger of sending out conflicting messages. While their policy wishes to assist the development of the environmental technologies, it is in danger of taking away the home market that would help develop them. I ask the Paymaster General during consultation—before the drafting of the orders that will come before the House—to consider the role of the Department of the Environment and the use of advanced land remediation techniques instead of landfill of contaminated land. He should consider the Department of the Environment's sustainable management strategy, which has set targets for reducing the amount going into landfill sites and could be undermined by the inclusion of contaminated land. He should also consider the DTI's Biotechnology Means Business initiative and the LINK programme on the biological treatment of soil and water to deal with contamination, which covers many Government Departments.
    There are numerous environmental arguments for a landfill tax, which we have supported in principle, although we have disagreed with some of the details. On contaminated land, it is important that any short-term arrangements that are made to help out with particular problems of developers do not become medium or long-term solutions that undermine the very industries for whose development the landfill tax was supposed to create the opportunity.
    Mr. Tim Smith: I congratulate my right hon. Friend the Paymaster General on the way in which he has handled the landfill tax. I fully support the principle of a landfill tax, but it is important that, at the margin, we should get its scope right.
    Concern was expressed in Committee on behalf of several industries that felt that they would be placed at a competitive disadvantage or had other genuine reasons for exemption, and my right hon. Friend tabled the new clauses, especially new clause 8. It is always difficult to decide whether it is right to give the Government more order-making powers, but in this case it is sensible, because we may want to vary the scope of the tax, and contaminated land probably will not be the last example of where that would be necessary.
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    The CBI minerals committee welcomed new clause 6, on mining and quarrying, but asked for some reassurance on two matters. The first is straightforward. It seeks confirmation that the exemption provided by new clause 6 embraces the naturally occurring materials that result from the processing of a mineral as part of the normal mining or quarrying operation. I thought that that was clear. Secondly, it seeks reassurance that new clause 6 covers processes which are an essential part of the operation, but which take place at a different location. It would be helpful if my right hon. Friend could deal with those two points in his reply.
    The hon. Member for Bristol, South (Ms Primarolo) mentioned salt. My hon. Friend the Member for Congleton (Mrs. Winterton) has tabled amendment No. 70. As she is not here, I should mention it because I am not sure that the new clauses cover it. It would be helpful if my right hon. Friend could respond on that. The underground cavities in the Cheshire plain where the material is disposed of after processing are in my hon. Friend's constituency—which explains why she has tabled the amendment—and it would be helpful if my right hon. Friend could address that issue. I believe that his handling of the matter has been exemplary.
    Mrs. Helen Jackson: I am pleased that, following our discussions in Committee, several new clauses have been introduced on Report. Although the Opposition's preferred option was to spend more time considering the various issues raised by different industries and local authorities, I accept that the new clauses go a long way towards addressing some of their queries.
    I should like to ask the Paymaster General to respond to a few points that I have raised with him in the interim. The first involves the continuing discussion about the problems that certain industries will have defining and accepting the various classifications of waste. The Secondary Metals Association—which is the trade association for the scrap metal industry and is obviously important to steel producers in South Yorkshire—remains concerned about how to address the classification issue. How will scrap metal merchants know whether the materials they receive qualify for the £2 levy or the £7 levy?
    The second point was raised by the Environmental Services Association, and I do not think that the Paymaster General has responded to it. How will waste be weighed at landfill sites so that landfill tax may be levied accurately to ensure that all operators are competing on a level playing field. In its briefing—with which we all agree—the Environmental Services Association says:
    "the aim of the tax is to encourage the movement of waste up the hierarchy by increasing landfill charges".
    It does not aim to subsidise some businesses, which might be able to get around the landfill tax, at the expense of others. The association is concerned—as am I—that, if waste is not weighed on weighbridges in every case, there could be discrepancies and unfairness.
    Thirdly, I have some concerns about new clause 6 regarding mining and quarrying. There will be concern, particularly in former mining areas, that potential developers of opencast sites will see the landfill tax as a means of increasing their opencast operations.
    5 pm
    Many of the arguments about mining and quarrying were reasonable and well founded. I listened carefully to

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    what the Minister said: that waste in mining and quarrying operations would not be exempt—if I understood him correctly—if the operation was separate from the mining operation or if the composition of the waste was altered. I should like some assurances that opencast operators will not have significant gains out of new clause 6. There are huge areas in Yorkshire and the north-east that would be particularly concerned if it was seen as a ghetto for opencast operators.
    My fourth point relates to new clause 8—an open-ended clause that could mean everything, nothing, half, quarter, three quarters and could be said to accommodate most of the concerns that were raised in Committee. It leaves loopholes. We want further clarification about when the loopholes will be closed if new clause 8 is seen to offer too much flexibility to Ministers, to operators or to waste disposal people.
    The Minister will be aware that I raised a number of concerns of the British Iron and Steel Producers Association in Committee because it wanted dispensation to clear and develop its contaminated land for clean uses such as housing. We were supportive of the association's representations. I am happy because its representations have been addressed by new clause 8, but it seems to me that the dispensation could go much wider and that, perhaps, we do not want it to go too much wider.
    It is extremely important—as my hon. Friend the Member for Bristol, South (Ms Primarolo) said—that the widening of the exemption to include all contaminated land is not jumped on by waste operators as a way of avoiding the pressures that the landfill tax is supposed to put on them to look for ways of recycling waste, cleaning up waste or using waste for new productive purposes through the environmental technologies that have been mentioned by the Environmental Industries Commission.
    I urge the Minister to take seriously the commission's recommendations that, in every case, Ministers and Members of Parliament ought to be assured that the best environmental option that achieves a sustainable waste management strategy is being pursued and that we do not simply respond to pressure from this or that waste disposal operator who is using the term "contaminated land" to avoid landfill tax payments.
    Mr. Barry Sheerman: I welcome the landfill tax and regard this as an exciting new era in terms of how we deal with much of the waste that we produce. I intend to refer not to animal cemeteries—unfortunate as that may be—but to mining and quarrying and the exemptions that have been suggested under new clauses 5 and 6. The exemptions are important—we all know that mining and quarrying produce more waste than any other source.
    We have a highly reputable, efficient and competitive waste disposal industry that does a good job on well-administered sites, but there is the other world of cowboy operators—sometimes the small operators—that regulations do not seem to reach. My only concern is that there are certain elements in the exemptions that seem to cater to the fly-by-night cowboy operators. One worries that there will be tax evasion and more inefficient and rather dodgy sites. We do not want a proliferation of fly tipping across the countryside. It is already a real problem and some attention has to be directed to it.
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    I welcome the fact that there is an exemption. All hon. Members have been lobbied by an efficient and welcome lobby—not all lobbies are welcome. A number of waterway and canal societies, including the Huddersfield narrow canal society, have lobbied me. I am glad that the Government have been able to respond with an exemption.
    Some would say that we do not want exemptions for one part of an industry when similar exemptions are not available for another part of it. I refer to the chemical industry and the production of salt. There is concern about competitiveness. That sector of the industry believes that it is being hard done by and that further consideration should be given to its special case. I do not know the pros and cons of the case, only what my postbag looks like and the arguments that have passed across my desk. The issue needs further attention.
    The Government need flexibility to deal with poisoned land. The issue must be dealt with sensitively. Technology is changing quickly in this area—indeed, the tax is producing new technologies. The energy from waste movement is producing new technologies. We already know that operators in the waste world are looking at totally different technologies because they know that the landfill tax is coming in on 1 October. That is all very good, but we must have a system that is sensitive enough to react quickly if my hon. Friend the Member for Bristol, South (Ms Primarolo) is right and we experience evasion of the tax and movement towards a less good disposal of polluted land.
    Sir James Molyneaux: I join those who have welcomed the exemptions, because they are a move in the right direction. We pay tribute to the Treasury Ministers and all who served on the Committee for starting to move in the right direction. The exemptions will be of great benefit to small local authorities and we have—with only one exception—small local authorities in Northern Ireland.
    We also welcome the flexibility conferred by new clause 8 and the powers to vary by order. The hon. Member for Beaconsfield (Mr. Smith) and others asked whether there would be a general welcome for the powers for central Government to take certain action by order. In Northern Ireland, we can hardly object to the phrase "made by order", because the Secretary of State for Northern Ireland has no other option. He must govern Northern Ireland "by order" in nearly all respects, so we do not quibble with that one.
    I want to ask the Paymaster General for an assurance that the commissioners will consult district councils meaningfully, because they have two interests in this area. First, they are bound to be affected directly because they will run some of the sites. Secondly, councils are regarded—I think that this is the case throughout the United Kingdom—as the link, even the go-between, between central Government and the average citizen. For that reason, it would be useful if district councils, as the recognised authorities, had effective lines of communication and consultation with the commissioners.
    We must be merciful to councillors, because they are usually blamed—I am sure that the problem is the same on both sides of the water—for the actions and inaction of Governments of whatever complexion. I say that to preserve my neutrality. Some Departments sometimes

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    seem to welcome the fact that the fire is directed at local councillors rather than the Ministers who are answerable to Parliament. I want to pay tribute to councillors in the presence of my hon. Friend the Member for East Antrim (Mr. Beggs), who has served for a long time on a local authority. He endures all the heat and burden of the day and very often gets little sympathy from those who elect him—and still less sympathy from Governments, again of whatever complexion.
    Mr. John Home Robertson: I warmly endorse the closing words of the right hon. Member for Lagan Valley (Sir J. Molyneaux), not least because my wife has recently been elected to a Scottish local authority.
    Sadly, I am about to develop a substantial constituency interest in the landfill industry since Blue Circle Industries plc has obtained planning permission to use what used to be an enormous quarry close to Dunbar as a large landfill site, which will be available to users in south-east Scotland and north-east England. I fear that the site will provide lots of revenue to the private company, Haul Waste, that has bought it from Blue Circle.
    It is interesting to note that Haul Waste is a subsidiary of the privatised South West Water, so there will be a number of snouts in that trough. All those involved will want to get their cut from the business and, under the landfill tax, the Chancellor of the Exchequer will get £7 a tonne out of the same hole.
    My main anxiety is that, after the privatised water industry gets its profit out of that hole in the ground and the Chancellor of the Exchequer has had his take, very little might be left to protect the environment of the neighbourhood. We all know that landfill sites can be very messy locations. The best impression of the east coast of Scotland will not be created if people travelling up the A 1 or the east coast main line go past a colossal hole full of visible, smelly, messy rubbish. It is therefore important that people who operate such sites should be given incentives to do so in an environmentally friendly and responsible manner.
    Mr. Roy Beggs: The hon. Member will share my concern that Haul Waste is seeking planning permission for a huge—probably the biggest—quarry site in Northern Ireland on the edge of Larne lough. Does he agree that landfill sites must be strictly supervised to ensure that leachate does not flow into rivers and loughs to cause permanent and, in many cases, irreparable damage?
    Mr. Home Robertson: We are in danger of having a general debate about the merits and demerits of landfill sites, but I agree entirely with the hon. Gentleman.
    I am personally very sad about the development in my constituency because, in my 18 years as Member of Parliament for East Lothian, I have never received a single complaint about the council-operated tip in my local authority. All the rubbish is baled and most of my constituents do not even know where it goes. Under the new set-up, the rubbish will be tipped loose. The wind will blow it around, the gulls will fly and the rodents will run around. I fear that the site will be revolting and I am concerned that—after everybody has had a profit—the environment of the area should be protected.
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    My specific point about the new clauses and amendments in this group arises from something that the Paymaster General said in his introductory speech. He said that the purpose of the landfill tax is to encourage the reuse and recycling of waste material. It does not quite do that.
    Encouragement can involve carrots or sticks, and the tax is a stick that will penalise landfill, but there is nothing in the package to encourage recycling and investment in plant for recycling. That point was clearly made to me by a waste operator in my constituency, East Coast Skips Ltd., which told me that it is enthusiastic about co-operating with Government policy and wants to invest in equipment to recycle timber, paper, glass and anything else.
    Unfortunately, under these provisions, the company's cash flow will suffer because it will have to start paying the £7-a-tonne levy and it will receive no incentive to invest in the equipment for recycling. It would not be unreasonable for at least part of the revenue from this tax to be made available to encourage people in the industry, local authorities and others to invest in the equipment that they require to do what we all want them to do. I hope that the Paymaster General will address that constructive suggestion.
    5.15 pm
    Mr. Tim Devlin: I welcome the opportunity to say a few words about landfill tax, because it is of great concern in my constituency, which is Britain's largest chemical-producing area. When I recall the Second Reading of the Finance Bill, I am pleased to see in new clauses 5 and 6 that the Government have taken notice of some of the criticisms that were made about the tipping of material dredged from harbours and rivers and about inert material washed from potatoes and resulting from the movement of soil.
    I still have three concerns, which have already been communicated to the Department of the Environment by Teesside development corporation, by contractors in my constituency and by me on behalf of Harcross, the largest producer of chrome in this country and in Europe. Its main competitors are in America, the far east and South Africa, so any burden placed on that company puts it in an unfortunate uncompetitive position against the major competitors that it faces in other parts of the world. I shall be interested to hear what the Paymaster General has to say about my three points.
    The first point is about Harcross. I have read new clause 6 on mining and quarrying and I am uncertain whether a company that takes mined material from another country, separates it into a useful metal and an inert waste and then landfills the waste in a pit on its own land will be liable to pay the full £7 a tonne rate of tax. If it is liable, that will significantly affect its competitive position. I am interested to know whether the steps that the company has taken to reduce the waste that it produces—they have cost a considerable sum—will be offset against the amount of tax that it may have to pay if it is indeed liable to the tax.
    My second concern relates to the activities of the urban development corporations. This point has been pursued with the Department of the Environment by Teesside development corporation. It has to do with contaminated land being excavated to regenerate an area, and whether

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    the scrapings taken up from the surface of the earth and then sent away to landfill will be liable to the £7 a tonne tax. If they are, that will, in effect, be a tax on regeneration. I had understood from the DOE that that would not happen, and that the removals would be classed as inert material and thus be exempt from the tax. The development corporation and I would both be grateful for confirmation of that.
    My third concern is material used for landscaping. I have to admit that I am rather confused by a letter that I have received from a junior Minister at the Department of the Environment, with whom I have corresponded on this matter. Incidentally, he offered to meet me to discuss the problem but has not yet found himself able to do so. The letter, dated 14 March, says:
    "You question whether the landfill tax should also apply to inactive or inert wastes. Inactive or inert waste is waste which does not decompose when it is landfilled to produce methane gas, or have the potential to pollute groundwater. We recognise that the risk of environmental pollution is much smaller for this type of waste, and the lower tax rate of £2 per tonne will apply to inactive wastes to take account of this."
    On the next page, the letter continues:
    "The landfill tax will provide an incentive to use these materials productively rather than disposing of them in landfill sites".
    Further on, the letter continues:
    "The purpose of the tax is to face producers of waste with their actions … Research published by my Department into the recycling of demolition and construction waste does suggest that there is scope for increasing both the total quantity of waste recycled and the proportion which is recycled as quality secondary aggregate."
    The point here is whether construction industry waste—bricks, tiles and pipes—which is then sold by companies to other companies for use as hard core on building sites to fill in soft patches in the ground, and as underlay for carparking areas and farmyards, will be classed as waste. Will it be classified as destined for landfill or as recycled material that is wholly exempt from the tax? That is an important aspect to the chemical industry and to agriculture generally. Hard-core material is often sold to companies such as ICI to build bunds around their plants, so that if there is a chemical leak it can be contained within a specified area. It is then landscaped with topsoil, effectively creating what looks to the eye of the passer-by like a long, low hill. That improves the visual aspect of many a factory and plant, at the same time as adding to safety.
    Many companies sell their hard core for the construction of new roads, farm roads, farmyards, turning areas and parking areas. Is that classified as landfill? If so, will the material be charged at £2 a tonne, or will it be classed as recycled material? That point has been raised by hauliers in my constituency who are anxious for the answers. I look forward to some guidance on how this part of the construction industry will be affected by the proposed landfill tax.
    I must warn the Minister that if people have to pay landfill tax to take their waste to an approved tipping site, we face the prospect of a considerable increase in fly tipping. That concerns me greatly. Will the Minister therefore ensure that local authorities provide at least one place where local residents can take their unwanted bedsteads and domestic refuse and dump it for free? At the main incinerator and waste disposal unit in Teesside
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    we currently have to pay £25 a load. Providing a free dump would be a massive incentive for people on low incomes to dispose of their rubbish properly.
    Mr. Paddy Tipping: I welcomed the landfill tax when it was announced in the Budget and I followed its progress in Standing Committee. I still welcome it, although the more I examine it the more difficult the subject becomes. I am particularly pleased by new clause 6 as it affects the deep coal industry. I had never thought that that industry would be affected by the landfill tax, but I am pleased that the new clause clarifies the matter.
    I should like to pursue the Minister a little further on the consequences of the tax for the coal industry. Will materials brought in for engineering work be exempt from the landfill tax? I offer the Minister two examples. During construction of a colliery slag heap, the base is lined with clay to prevent water from permeating it. That clearly involves bringing waste on to the site, but it is designed to stop other waste from polluting the water.
    Secondly, capping a colliery tipping site with soil needs to be done to enable tree planting to take place. I am keen that that, too, should be exempt from the landfill tax.
    It also seems clear to me that if coal is brought out of the mine and then washed, that is part of the coal mining process, so the resulting waste should not be liable to the landfill tax. Sometimes coal is transported away from the colliery to another site for washing; does it matter whether the process takes place on the same site?
    I may be pushing my luck a little, but it would be helpful to the coal industry to have these answers. It would also help the industry if fly-ash were exempt from the tax. I assume that subsection (5)—
    "a process forming part of those operations and permanently altering the material's chemical composition"—
    excludes fly-ash, but I use it as a device to ask the Minister about what category fly-ash will come under—the higher rate, or the lower rate for inactive and inert waste. The coal industry faces many challenges at the moment, and I know that the Revenue is consulting on this. I, for one, am very anxious that the industry should survive.
    Mr. Heathcoat-Amory: I am grateful to the House for the general welcome for the tax. I think that it is seen as an advance in environmental terms, and that it will raise a useful sum that will be applied to relieve the burden of employment taxation.
    On the specific questions, the hon. Member for Bristol, South (Ms Primarolo) asked about dredging and whether material reclaimed or taken out of ponds and lakes will be exempt. The answer is no. The dredging exemption is designed for the removal of material that has entered harbours and waterways through natural forces. It is also designed to keep those harbours and waterways clear for navigation purposes and to prevent flooding. That is not the case for material removed from stagnant ponds and lakes. I remind her that, if such material is disposed of other than to a licensed landfill site, it will not be taxed anyway.
    Ms Primarolo: What about material removed from reservoirs that do not have a throughput of moving water?
    5.30 pm
    Mr. Heathcoat-Amory: Unless a reservoir is a waterway used for traffic, and therefore might qualify as a type of canal, I do not envisage that it will be exempt.

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    That question illustrates the validity of the new clause, which introduces an order-making power, because it is precisely these marginal issues that may fall to be altered in due course.
    Mr. Home Robertson: I do not think that the Minister quite understands what a reservoir is. A body of water is not a reservoir unless water flows through it. The whole purpose of a reservoir is for water to go in at one end and to be taken out at the other, and if in the process silt gets into the bottom of the reservoir, presumably it is reasonable to allow the operator to remove it without being taxed.
    Mr. Heathcoat-Amory: Nor do many canals have water flowing through them. They are not rivers; some canals are virtually stagnant, yet they take traffic and therefore have to be kept clear for navigation purposes. I can envisage, if I stretch the definition to its extreme, a type of reservoir that might also be used to take commercial traffic and might therefore form a type of canal. That might fall to be exempted from the tax. In general terms, I feel that reservoirs will not fall within the exemption and therefore material removed from them will fall to be taxed.
    Mrs. Helen Jackson: Surely, as we in Yorkshire know, the whole point about reservoirs is that if they are allowed to silt up, the supply and resources can be threatened. That issue has been raised not once but many times by the people of Yorkshire in the past six months, because silting up may have contributed to the problems last year. I should be grateful if the Minister would agree to examine the implications of that.
    Mr. Heathcoat-Amory: I do not want to get into the problems of Yorkshire Water during the debate. The problem there is too little water rather than too much silt. I would rather re-emphasise the point that the order-making power is partly designed to deal with possible future definitional problems, where the House may decide to move the borderline between exempt and non-exempt material, which neatly makes the point for the new clause, which introduces such a provision.
    The hon. Member for Bristol, South wants to ensure that the contaminated waste provision is not abused and that it should not be used in cases where there is a perfectly good alternative. The point is that clearing up historically contaminated land is currently extremely expensive, and it would act as a deterrent if such material were to bear tax at £7 a tonne. It would give every incentive to the development of green-field sites rather than the contaminated brown-field sites, where we wish to see development taking place in some cases.
    Of course, there are other ways to deal with contamination. Soil can be washed. I have even heard that microbes can be employed to chew up the offending contamination, but all this technology is in its infancy and at present is a good deal more expensive than existing methods. If the balance were to shift, we would need to consider whether it would be appropriate to continue to exempt contaminated sites.
    I am grateful for the remarks of my hon. Friend the Member for Beaconsfield (Mr. Smith) about the way in which we have tried to introduce this tax through listening
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    to representations that have been made. Indeed, we have gone a long way towards meeting some of the objections where they are well founded. He mentioned the salt mining industry. I can confirm that material put back into salt cavities will not be exempt, because it has been altered chemically. In other words, what is taken out of the salt cavities is different from what is being put back in. We have, however, met some of the industry's concerns by bringing within the definition of the lower rate these deposited materials, which will be taxed at £2 a tonne rather than the original £7 a tonne. In addition, we shall make an allowance for the water contained in the brine material that is pumped back into the excavated cavities.
    The hon. Member for Sheffield, Hillsborough (Mrs. Jackson) asked me about the different classifications of waste between the upper and the lower rate. In answer to a written question, I announced the categories that fall within the lower rate, but before that is taken forward into secondary legislation we are open to further representations.
    The hon. Member for Hillsborough asked about weighbridges. It is not our intention to insist that all landfill sites be equipped with a weighbridge. Many of them are, but where there is no such facility for weighing material, for environmental control purposes the quantity of waste has to be assessed. When that is done to the satisfaction of Customs and Excise without a weighbridge, we shall use that as a basis for taxation. It is important when we introduce a new tax that we do not unnecessarily burden small operators with capital expenditure that they might not be in a position to meet. It is not a requirement that there should be a weighbridge at smaller sites.
    The hon. Member for Hillsborough also asked about opencast mining. No special privileges will apply. The planning process must take care of the question whether opencast mining can take place, and spoil and waste from that operation will be exempted in exactly the same way as they are from deep mining. She also made a point about being restrictive about the definition of historically contaminated waste. I have dealt with that point.
    My hon. Friend the Member for Beaconsfield also asked me two questions about mining waste. I can answer both of them positively. Material that is normally processed or separated from quarried or mined material will not be taxed. Similarly, it does not matter whether that process takes place at the quarry or whether it is geographically separate.
    The right hon. Member for Lagan Valley (Sir J. Molyneaux) asked about the need for consultation, particularly with district councils. Talking to representatives and officers from local authorities is very much part of our consultation exercise, and we shall continue to engage in such consultation.
    The hon. Member for East Lothian (Mr. Home Robertson) mentioned the burden imposed on local authorities that might have to provide for, or encourage, the recycling to which the tax relates. Between 1990 and 1994, the Government provided some £10 million in grant to assist the development of alternative environmental technology, including recycling technology. More specifically, local authorities were permitted to borrow more than £50 million for capital investment in recycling facilities. All that will be boosted by the introduction of the

    1065
    tax. The hon. Gentleman may call it a stick rather than a carrot; nevertheless, it is a direct incentive for all waste producers, and all who handle waste, to find alternatives to land filling. Recovery of waste, incineration with heat recovery and recycling in all its forms will be given a direct impetus.
    Mr. Home Robertson: I was referring not only to local authorities but to established contractors, large and small. The Government say that such contractors want to begin recycling rather than landfilling. The Government are clearly imposing a substantial extra burden on their cash flow by introducing the £7 a tonne tax, but at the same time the Government want them to invest in recycling equipment. Surely it is reasonable for those contractors to gain an incentive—perhaps a grant scheme—from the tax revenue, so that they can install such equipment.
    Mr. Heathcoat-Amory: As I have explained, through the normal credit approval procedures the Government have directly encouraged local authorities to install such facilities. Even without the tax, however, many self-sustaining recycling systems exist. For instance, all aluminium cans are taken by Alcan and other companies and turned into new aluminium ingots. A further direct financial incentive will be given; it will be in everyone's interest to remove aluminium from the waste stream in order to recycle it, and to reduce the volume that would otherwise have to be taxed when it went to landfill.
    Mr. Sheerman: I am rather worried about the fact that the Minister has not mentioned trusts. I am thinking of carrots rather than sticks. I would have thought that, under the new clause 5 criteria, the trusts that we expected to benefit from the landfill tax would be able to supply some of the "carrots" that we all eagerly awaited from 1 April. Will those trusts disappear, or will they remain with us? Will they be affected?
    5.45 pm
    Mr. Heathcoat-Amory: The trusts are very much part of the legislation. I have not mentioned them only because they are not part of the new clauses, and I do not wish to be ruled out of order. We hope that environmental trusts will spring up to develop other ways of dealing with the waste stream, including research into alternatives. They may also clear up some of the so-called orphan sites that would otherwise remain derelict.
    My hon. Friend the Member for Stockton, South (Mr. Devlin) referred to material brought into the country and then separated out as part of an industrial process. He asked whether the resulting material would be taxed. It would, but, without access to further details, I do not know whether it would be taxed at the "inactive" rate of
    £2 a tonne or at the higher rate of £7. My hon. Friend gave the more specific example of what he described as "scrapings" from contaminated land. That would be exempted under the provisions relating to contaminated land.
    My hon. Friend gave other examples from a letter that he had received from the Department of the Environment, and questioned me about material from the construction
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    industry. In particular, he wanted to know whether material that was sold would be taxed in any way. The answer is no. If material has a use and is sold to an end user, it will not be taxed; it will be taxed only if it goes to a licensed landfill site. Ordinary inert waste would be taxed at £2 a tonne. My hon. Friend also mentioned fly tipping. We already have provisions in environmental law to deal with that, and we want them to be rigorously enforced to prevent incentives being given to those who engage in fly tipping rather than responsible disposal.
    Mr. Devlin: I am grateful for my right hon. Friend's helpful comments. It seems from what he has said that, if the incinerator that currently stands at the centre of Teesside is removed and the development corporation demolishes and clears the site, that will be treated as an exempt disposal.
    Mr. Heathcoat-Amory: If the site were shown to be historically contaminated, we would envisage exempting it, but it is dangerous for Ministers to give definitive interpretations of tax liability from the Dispatch Box. If my hon. Friend would like a more authoritative reply, he had better write to me.
    The hon. Member for Sherwood (Mr. Tipping) asked me about material brought on to a site. If it is bought by those who are lining, or indeed capping, a site, that would not be a disposal for landfill purposes and would not be taxed. As for coal, the hon. Gentleman gave an example in which water was added. I know that water is often added to pulverised ash from power stations to help transport it. We do not want to tax water that is added in that way; customs will apply a conversion factor so that the actual material is taxed.
    The hon. Gentleman also asked about processing that is geographically remote from the original site. That itself would not mean that the material was taxed, provided that it was part of the same basic operation and that the material was not chemically altered—provided, in other words, that it was still part of the original quarry or mining operation. It would not matter where the operation took place.
    Having given those few elaborations, illustrations and reassurances, I commend the new clauses to the House.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

  New clause 6

    MINING AND QUARRYING
    —(1) A disposal is not a taxable disposal for the purposes of this Part if it is shown to the satisfaction of the Commissioners that the disposal is of material all of which fulfils each of the conditions set out in subsections (2) to (4) below.
    (2) The material must result from commercial mining operations (whether the mining is deep or open-cast) or from commercial quarrying operations.
    (3) The material must be naturally occurring material extracted from the earth in the course of the operations.
    (4) The material must not have been subjected to, or result from, a non-qualifying process carried out at any stage between the extraction and the disposal.
    (5) A non-qualifying process is—

    (a) a process separate from the mining or quarrying operations, or

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    (b) a process forming part of those operations and permanently altering the material's chemical composition.'.—[Mr. Heathcoat-Amory.]

    Brought up, read the First and Second time, and added to the Bill.

  New clause 7

    PET CEMETERIES
    .—(1) A disposal is not a taxable disposal for the purposes of this Part if—

    (a) the disposal is of material consisting entirely of the remains of dead domestic pets, and

    (b) the landfill site at which the disposal is made fulfils the test set out in subsection (2) below.

    (2) The test is that during the relevant period—

    (a) no landfill disposal was made at the site, or

    (b) the only landfill disposals made at the site were of material consisting entirely of the remains of dead domestic pets.

    (3) For the purposes of subsection (2) above the relevant period—

    (a) begins with 1st October 1996 or (if later) with the coming into force in relation to the site of the licence or resolution mentioned in section 60 below, and

    (b) ends immediately before the disposal mentioned in subsection (1) above.'.—[Mr. Heathcoat-Amory.]

    Brought up, read the First and Second time, and added to the Bill.

  New clause 8

    EXEMPTIONS: POWER TO VARY
    `.—(1) Provision may be made by order to produce the result that—

    (a) a disposal which would otherwise be a taxable disposal (by virtue of this Part as it applies for the time being) is not a taxable disposal;

    (b) a disposal which would otherwise not be a taxable disposal (by virtue of this Part as it applies for the time being) is a taxable disposal.

    (2) Without prejudice to the generality of subsection (1) above, an order under this section may—

    (a) confer exemption by reference to certificates issued by the Commissioners and to conditions set out in certificates;

    (b) allow the Commissioners to direct requirements to be met before certificates can be issued;

    (c) provide for the review of decisions about certificates and for appeals relating to decisions on review.

    (3) Provision may be made under this section in such way as the Treasury think fit (whether by amending this Part or otherwise).'.—[Mr. Heathcoat-Amory.]
    Brought up, read the First and Second time, and added to the Bill.

  New clause 15
    INCIDENTAL BENEFITS FOR THE SPEAKER, FOR HOLDERS OF MINISTERIAL OFFICE AND FOR OPPOSITION LEADERS AND WHIPS
    `.—(1) After section 200 of the Taxes Act 1988 (expenses of Members of Parliament) there shall be inserted the following section—

    Incidental benefits for holders of certain offices etc
    200AA.—(1) A person holding any of the offices mentioned in subsection (2) below shall not be charged to tax under Schedule E in respect of—
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    (a) any transport or subsistence provided or made available by or on behalf of the Crown to the office-holder or any member of his family or household; or

    (b) the payment or re-imbursement by or on behalf of the Crown of any expenses incurred in connection with the provision of transport or subsistence to the office-holder or any member of his family or household.

    (2) Those offices are—

    (a) any office in Her Majesty's Government in the United Kingdom, and

    (b) any other office which is one of the offices and positions in respect of which salaries are payable under section 1 of the Ministerial and other Salaries Act 1975 (whether or not the person holding it is a person to whom a salary is paid or payable under the Act).

    (3) Nothing in this section shall prevent a person from being chargeable to tax under Schedule E in respect of the benefit of a mobile telephone (within the meaning of section 159A).
    (4) References in this section to a member of the family or household of an office-holder shall be construed in accordance with section 168(4).
    (5) References in this section to the provision of transport to any person include references to the following—

    (a) the provision or making available to that person of any car (whether with or without a driver);

    (b) the provision of any fuel for a car provided or made available to that person;

    (c) the provision of any other benefit in connection with a car provided or made available to that person.

    (6) In this section—

    `car' means any mechanically propelled road vehicle; and

    `subsistence' includes food and drink and temporary living accommodation."

    (2) This section has effect for the year 1996–97 and subsequent years of assessment.'.—[Mr. Jack.]
    Brought up, and read the First time.
    The Financial Secretary to the Treasury (Mr. Michael Jack): I beg to move, That the clause be read a Second time.
    I apologise to the House for the relatively late tabling of this new clause. I thank the hon. Member for Oxford, East (Mr. Smith) for the way in which he has responded to that. I hope that the information that I was able to supply to him has helped him to gain a clear understanding of the clause.
    Put simply, our proposal is to maintain the way that travel and subsistence for the Speaker, Ministers and Opposition officeholders have been dealt with for the past 20 years. Some 20 years ago, the then Government included in their Finance Bill new legislation to tax company cars and other benefits in kind. That Finance Bill included an exemption for pool cars. Broadly, those are cars that are used for business, are shared, are not usually taken home overnight by employees and have no more than merely incidental private use.
    At that time, it was expected that Ministers' cars would be pool cars. The then Financial Secretary to the Treasury, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) said:
    "As I understand it, normally, from what goes on in industry, pool cars are used on a Monday to Friday basis and that is the position with regard to Government pool cars, that there are restrictions on private use, such as the provision that the employee does not normally have a pool car for use on holidays or weekends—and the same position applies to Ministers. From my examination, there is

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    very little to choose between the way in which the Government run their car service and the ordinary pool car arrangements that we see in operation. Because of this, there is no reason to suggest that Ministers receive any benefit more than any other who have a pool car system as a traditional means of providing motor cars."— [Official Report, Standing Committee E, 22 June 1976; c. 1188.]
    That was also the view in subsequent years when official cars were treated under successive Governments as pool cars.
    As we moved into the 1990s, Ministers and the Inland Revenue had questions probing the precise application of tax law to official cars from tax practitioners, individual employers and employees, and from some hon. Members. Against that background, the Inland Revenue was asked to review the whole matter. Although nothing has changed since 1976, the Inland Revenue took, as it would in any such review, a fresh look at the interaction of tax law with the way in which official cars are used.
    After taking legal advice, the Inland Revenue concluded that it could no longer guarantee that all official cars are pool cars for tax purposes. That was because it no longer took the view that, in strict tax terms, private use was merely incidental to the business use. Having looked at that again, it concluded from the strict tax standpoint that working on classified papers in a car did not mean that travel between home and work was necessarily merely incidental to the other use of the car. Failing that one test means that the tax exemption is lost even when the car is pooled and is not normally kept at home overnight.
    The Inland Revenue also found in its review that legislation in 1989 had made it clear that security cars were not necessarily exempt from tax. For security reasons, some cars are used in a way that means that they cannot be treated as pool cars. Faced with a similar position, other employees might ask their employer to pay the tax for them so that they are no worse off. That option is not open to us. It was clear at that time that legislation would be needed to maintain the intention of Parliament in 1976 that there should be no tax on official cars which can now, as then, be used only for official travel and for a limited range of what, in strict tax terms, is not business travel.
    The additional travel allows Ministers to make more efficient use of their time for work in the office or at official engagements. It also gives them time to work in their cars and protects them and official papers. Successive Governments have recognised that that is a cost-effective measure and makes good sense. It became apparent that we also needed to look at other things that are provided in connection with official duties, including in some circumstances meals, travel or overnight accommodation for spouses. That raised complex questions that took a long time to resolve.
    We were determined from the outset to resolve the tax treatment fully and openly and wished to make sure that all the issues had been identified. It took some time to check all the possible circumstances in which Departments may incur costs in connection with the official duties of the Speaker, Ministers and Opposition officeholders. The Inland Revenue wished to take legal advice on some of them. In the light of the Inland Revenue advice, we had to consider that meals, travel or overnight accommodation for spouses could be
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    taxable, and all the options open to us were fully and carefully considered. They included the option of presenting to the House legislation to allow Departments to meet any tax on travel as other employers do for their employees. We had to revisit our options in the light of developments along the way, which included the report of the Top Salaries Review Body.
    We are satisfied that the new clause reflects the 1976 intention and that it meets our objective of removing doubt about the tax treatment now and in future. It invites the House to confirm that meals, travel or overnight accommodation that are provided by Departments for the Speaker, Ministers and Opposition office holders should not be taxed in future just as they have not been taxed in the past. That is all that it does.
    The Speaker, Ministers and Opposition officeholders will pay no more and no less tax than they pay now. They will have meals, travel or overnight accommodation only in connection with their official duties. Occasionally, and quite justifiably, that includes meals, travel and overnight accommodation for spouses who are invited to accompany them and assist in their duties.
    I make it clear that checks are in place to ensure that public money is spent only for those purposes and as set out in "Questions of Procedure for Ministers", which states:
    "The expense of a Minister's spouse when accompanying the Minister on the latter's official duties may occasionally be paid from public funds, provided that it is clear in the public interest that he or she should accompany the Minister. In the case of official visits overseas the Prime Minister's prior assent should be obtained on each occasion. For official visits within the United Kingdom, this is at the discretion of the Minister in charge of the Department concerned who, if in any doubt, should consult the Permanent Secretary."
    In summary, the new clause does no more than confirm what everyone expected the position to be when the Administration in 1976 introduced tax legislation on benefits in kind. That position has been subsequently maintained in the way that meals, travel and temporary accommodation for the Speaker, Ministers and Opposition officeholders have been treated in practice by successive Governments since 1976.
    Mr. Mike O'Brien: I thank the Minister for attempting to answer the 17 questions that we put to him today through my hon. Friend the Member for Oxford, East (Mr. Smith) who is the shadow Chief Secretary. Unfortunately, that cannot compensate for inadequate time for proper parliamentary consideration of the clause. We regret that, at the last minute, Ministers are trying to insert into the Bill a clause from which they might be perceived personally to benefit. I say, more in sorrow than in anger, that that does nothing for public confidence in the reputation of the House.
    The shadow Leader of the House and the shadow Chief Secretary were told of the clause on the day that it was tabled, and it was tabled on the last possible day on which it would have been in order. The House should not be doing business in that manner if it can be avoided, particularly when some members of the public are already suspicious of hon. Members' motives and might construe a wrong conclusion from the procedure adopted by Ministers.
    We must not only do the right thing to protect the honour and reputation of the House but we must be seen to do the right thing. We must be above the suspicion

    1071
    that hon. Members might seek unfairly to profit personally from their legislative powers. That is why any proposal that benefits hon. Members should have been openly and publicly debated and referred to the Nolan committee or to the office of Sir Gordon Downey before it ever reached the Floor of the House. That is just basic good sense and good practice in the light of the public criticism of the House in the past year. Quietly placing a clause such as this into the Finance Bill at the last possible moment is politically crass. It invites criticism and does nothing to enhance the House's reputation.
    6 pm
    I do not accuse Ministers—or, for that matter, the four Opposition postholders who will be affected—of obtaining new benefits from this clause, but there is an obligation to ensure that the public know that that is the case. Openness and transparency are so important because the issue is perception and reputation, as well as our doubts about the clause's detail.
    Let us refer this clause to Sir Gordon Downey or to the Nolan committee. Let it be seen that the clause will merely replicate the circumstances in which employers pay for transport for employees, as the Government claim in their press release. We should continue the current treatment and refer the question of enshrining this clause in legislation to the independent authority. If the clause is accepted in an independent assessment, after public debate, the Chancellor can propose it in the Budget in the normal way. The Revenue would be aware of the Government's intention to legislate on this matter to cover 1996–97, and it could take that into consideration when making any tax claims.
    Last-minute amendments raise unnecessary suspicions. Unfortunately, last-minute amendments have become a feature of the Government, with their rushed, ill-prepared legislation. We saw that demonstrated in loan relationships, self-assessment, and recently with the National Health Service (Residual Liabilities) Bill. I am perhaps less suspicious of last-minute amendments than other people. I am more used to ministerial incompetence and tend to suspect the cock-up rather than the conspiracy theory of late amendments, but I can see tomorrow's press.
    At the weekend, there were stories of the Secretary of State for Social Security having trips to and from his holiday home in France paid for by the taxpayer. The Sunday Telegraph said that he claimed £2,980 for a round-trip flight by private plane. I do not propose to delve further into that matter today—but, on Monday, the new clause was placed before the House. I repeat: it is just crass timing.
    What has changed since the 1976 provisions were introduced? They seemed adequate at that time. What are Ministers doing now that they were not doing then? If any part of the new clause related to security issues—perhaps for protection costs for Ministers—we would be anxious to assist with it. Certainly, no Minister or other parliamentary officeholder should be exposed to tax for carrying out essential duties.
    On the security issue, some senior corporate employees may have legitimate security concerns. To what extent can we justify giving tax exemptions to Ministers and senior parliamentarians that do not extend to other people who may be at some risk when travelling to and from work? Those issues may require consideration before we move to legislation.
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    The Financial Secretary rightly quoted something that my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) said in 1976. My right hon. Friend also said:
    "As I have said before, the position of a Minister is on all fours with the position of a director or higher-paid employee. That I stand by. I should not wish to be present speaking from this position if I were introducing legislation other than that."—[Official Report, Standing Committee E, 22 June 1976; c. 1029.1
    We now seem to be going beyond that statement.
    The new clause is not just about cars. Clauses such as this should reflect the widest possible consensus between the parties in the House. It may be that we could agree on a clause that is similar to this, but we have not had the time yet to consider fully its implications. We wish to be cautious.
    Mr. Tim Smith: Will the hon. Gentleman give way?
    Mr. O'Brien: I am pressed for time, but I shall give way.
    Mr. Smith: Given the clear assurance that my hon. Friend the Financial Secretary gave on this matter, I am slightly surprised at the hon. Gentleman's response. Will the hon. Gentleman now say that, if the clause finds its way into the Finance Act, a future Labour Government would immediately refer it to Nolan or to Sir Gordon Downey?
    Mr. O'Brien: If the hon. Gentleman had been listening, he would know that we want this matter to be referred now, before we legislate. Why is the wording of the clause so wide ranging? Can he answer that question? According to subsection 1(a) of the proposed new section 200AA of the Taxes Act 1988, tax relief is included not only for the officeholder but for
    "any member of his family or household".
    "Family" I can understand, but does "household" include servants, valets, butlers or Great-uncle Charlie, who happens to live with the Minister?
    A relative who assists at an official function should be covered, but we need to consider with more care how far we extend the exemption. The broad nature of the clause suggests hasty drafting. Some people—not I—might say that it was a hasty response to the stories on Sunday about the Secretary of State for Social Security. Perhaps the terms of rules on taxation of Ministers and others should be better circumscribed. Perhaps we should better protect ourselves in the House in terms of the legislation that we pass.
    Today, we asked a number of questions of the Financial Secretary in writing. I shall ask a few of them now. Why have the Government not allowed a reasonable time for consultation on their proposals? Why did the press release of 25 March say that the new clause covers only expenses incurred in connection with official duties, when there is no such limitation in the text of the new clause? Why was the matter not referred to the Nolan committee? Is there a difference between the rules for Ministers and parliamentary officers and those for employees? If so, precisely what are those differences, and what are the reasons for them? The Government press release is vague on that point.

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    Perhaps we need to protect our reputation with more detailed rules. This is not the right way to go about enacting such provisions. I ask the Minister to withdraw the clause and to refer it for independent assessment by Nolan or by Sir Gordon. The debate over the Nolan report was about transparency and the need for Members of Parliament to be open about what they do. Let the House show in its procedures that it has learnt the lesson.
    Let us reject the new clause and the way in which it has been put forward—at least for today. Let us say that we expect more transparency in such matters, and send a message to the public that the House has cleaned up its act and will be as open as possible in its future dealings. Our constituents have a right to such openness, and they will put up with nothing less. Labour will oppose this clause, with some regret.
    Mr. Devlin: I had not planned to speak to this clause, but the speech of the hon. Member for North Warwickshire (Mr. O'Brien) was most disgraceful. He is trying to make a most boring little clause about non-taxation of ministerial cars into an Opposition attack on sleaze in government; it is absolutely absurd. He should be ashamed of himself for coming along and—rather feebly—trying to make a rather stupid mountain out of a very small molehill.
    Mr. Malcolm Bruce: I wholly understand the basic reasoning behind this amendment—the Minister has had the courtesy to explain its purpose—and, like the hon. Member for North Warwickshire (Mr. O'Brien), I do not find anything fundamentally objectionable with it. I am, however, a little puzzled about why it had to be tabled at this very late stage.
    The Minister said that apparently there has been, up until now, some type of agreement with the Inland Revenue, but that the agreement has since come to a crunch, and that the Inland Revenue is basically saying that unless the matter is put into law, it will apply taxation—presumably retrospectively—to Ministers. Some Ministers could potentially be faced with very large tax bills, which I appreciate is a real difficulty. I should be grateful, however, if the Financial Secretary could explain the situation a little more.
    The timing puzzles me because, having been alerted to the clause, I asked my office to research its origin. As a result of the research, I was given a cutting from The Guardian of 12 May 1993, which said that this issue was very much under discussion at that time. In fact, my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) asked specific questions of the then Financial Secretary, currently the Secretary of State for Health. The then Financial Secretary said that, if he were taxed on his travel-to-work requirements, he would walk to work. I do not know whether he still intends to do that. I am not unsympathetic to the fact that Ministers go home late at night and travel in with boxes. If the argument is that Ministers need to be treated differently, that needs to be made a little clearer.
    What worries me slightly is that there seems to be a contradiction in the argument. It is argued that, in relation to travel to work, Ministers are treated on the same terms as anyone else. It is also argued that Ministers have a special requirement—perhaps involving security—and
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    work requirements that can be carried out in the car taking them to and from their engagements. It should be either one thing or the other. If the Government's argument is that Ministers require cars to and from work for work-efficiency purposes, that they are in a special category and that they should not be taxed for that, I and, I am sure, my party do not have a particular problem. However, the Inland Revenue and the Financial Secretary will have a problem with all the knock-on implications: other people might make similar claims.
    My worry is similar to that of the hon. Member for North Warwickshire, the Labour Front-Bench spokesman. As the matter has been tackled so late, we are left with a few questions that we do not have to time to answer. If it is possible to refer the matter outside without putting Ministers in prejudice, it should be done. After the Inland Revenue has held off this long, I find it difficult to believe that, if such a statement were made today, Ministers would find themselves landed with big tax bills at short notice. I should be grateful if the Financial Secretary would deal with those points.
    Mr. Stuart Randall: The Financial Secretary's explanation of the new clause was clear and I thank him for that. His argument, however, hinged on the Inland Revenue's investigation of the matter and on the fact that it was unable to guarantee that Ministers' cars could be regarded as pool cars because of incidental use—personal use—as opposed to official use. I would be grateful if the Financial Secretary would clarify that just a little and tell us what evidence before the Inland Revenue showed that perhaps it was difficult to regard those cars as something other than pool cars.
    I have been abroad and seen Ministers travelling around the world. It is good that spouses should attend engagements with Ministers. That is important, not only because it enables Ministers who look after policy abroad to be with their spouses as often as possible, but because their spouses can perform a useful function for this country, so I welcome that provision. However, I should like to add to the comments of my hon. Friend the Member for North Warwickshire (Mr. O'Brien), the Front-Bench spokesman, on the part of the new clause that refers to
    "any member of his family".
    It would not be unreasonable to limit that provision to spouses. I should be grateful if the Financial Secretary would comment on that.
    The definitional part of the new clause refers entirely to motor cars. Now that the European Union is becoming more and more integrated, why does the definition not include general aviation'? It is no more expensive and it would be consistent with the current arrangements on the use of general aviation that all Members of Parliament have with the Fees Office: they may do so, provided that it is not more expensive than normal air travel.
    Mr. Jack: I am disappointed that the Opposition have taken the line that they have. They have explained their reasons and have suggested that there is a hidden agenda. The hon. Member for North Warwickshire (Mr. O'Brien) said clearly that we should be transparent in all this, but, as my hon. Friend the Member for Stockton, South (Mr. Devlin) said, there was a nudging-in of matters connected with a sleaze element. That is far from what the

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    new clause is about. It is a technical tax issue and in no way would provide a privilege for people who are the temporary officeholders of the day. Ministers, Leaders of the Opposition, Speakers of the House come and go.
    In 1976, the provision of cars was deemed sensible, as it was in 1951 when Mr. Churchill, as he was then, first introduced such provision for Ministers, to provide that means of transport. In 1976, when its tax treatment was confirmed, people thought that the matter could be straightforwardly dealt with by making the cars pool cars and that there would therefore not be a liability to tax. As I have illustrated in my remarks, the Inland Revenue has been challenged effectively to the point of having to review the matter again.
    6.15 pm
    The party of the hon. Member for Gordon (Mr. Bruce) was among others in probing that matter. The provision had not been reviewed for about 17 years, so, rightly, the Revenue thought it timely to reconsider it. It came to the view that, of the three-part test that defined the cars that Ministers, office holders and others use as pool cars, the test that dealt with so-called merely incidental travel—home-to-work travel—was unsustainable. We failed therefore on that test and, after careful analysis, the Revenue deemed that a liability of tax could arise for users of a pool car.
    On the point raised by the hon. Member for Kingston upon Hull, West (Mr. Randall), when the law was originally passed, it was felt that, for example, the act of working on papers in the car was sufficient to make it merely incidental. A further re-examination of the law by the Revenue's legal advisers—particularly bearing in mind the legislation on benefits in kind and the tightening of the law—ultimately made the Revenue say to Ministers, "Look. You have got to do something about this to put beyond doubt the tax treatment of the provision of these cars."
    No one has seriously challenged the provision of the cars. That is open and above board. Ministers of the day, officeholders and the Speaker have access to those vehicles because it makes good common sense for that to be so. The problem is that that common-sense procedure falls foul of a ruling by the Revenue.
    The hon. Member for North Warwickshire asked whether we could postpone the measure. We have considered the matter for some time and examined whether there are other ways of dealing with it, which picks up on his point about the way in which someone in the private sector might be dealt with. The problem is that, in relation to such cases in the private sector, one of two things could happen.
    An individual benefiting in this way from a benefit in kind might make a deal with his company to pay the tax if it provides the benefit or, as is more often the case, the company may gross up the salary, effectively paying the tax for the individual. That facility does not afford itself to officeholders of the day. That is the reason why we seek to make clear, and put beyond peradventure, the tax treatment of the use of pool car arrangements.
    Some questions have been asked on the wider issues of the provision of accommodation, travel and spouses. We have been challenged on whether the new clause is drawn too broadly in relation to those subjects. Before we have
    1076
    use of an official car or have our air fare or accommodation paid, there are gates through which we must pass—the proprietorial grounds. Those are laid down in "Questions of Procedures for Ministers". If any Minister of the day has any doubt about those, his private office will be quick to remind him or her of the correct procedures. There is no question, therefore, but that we must pass through stringent tests before we use such cars. That is the point.
    A Minister whose spouse has died might require the assistance of, for example, another member of the family in undertaking his or her official duties. That is why the new clause is cast fairly widely. Before we benefit from the new clause, we must pass stringent tests. The new clause in no way, shape or form would confer on Ministers any particular additional benefit other than was outlined by Parliament in 1976. All we seek to do is to put beyond doubt the tax treatment.
    In answer to the question of the hon. Member for Gordon, we are not trying to be treated differently. In 1976, Parliament took the view that pool cars should be made available to Ministers. For the reasons that I have given, we wish to sustain the availability of the cars, but put beyond doubt the tax treatment.
    Mr. Mike O'Brien: How does the hon. Gentleman deal with the fact that my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) said at that time that his objective was to put a Minister on all fours with a director or a high-paid employee?
    Mr. Jack: Exactly as I have described. If a director or high-paid employee receives the benefit in kind paid for by his employer, there are two courses of action. One is that his tax would be paid for him by virtue of his salary being grossed up. That facility is not available to office holders. That is why the tax treatment makes certain that, for the duration of the holding of the office, an individual is not liable for a substantial amount of tax.
    I assure the House that the Inland Revenue has made it very clear that it would have no option but to levy tax charges in the forthcoming tax year if new legislation were not introduced. I am sorry that the official Opposition feel that they must vote against the new clause, which confers no extra benefit at all on Ministers. We look forward to hearing how they will deal with the issue in future. As usual, they have no alternative proposal. All one can say is that we are protecting all officeholders, including their leader, from what could be a very substantial tax bill.
    Question put, That the clause be read a Second time:—
    The House divided: Ayes 291, Noes 241.

    Division No. 88]

    [18.21 pm

    AYES

    Ainsworth, Peter (East Surrey)

    Atkinson, Peter (Hexham)

    Aitken, Rt Hon Jonathan

    Baker, Rt Hon Kenneth (Mole V)

    Alexander, Richard

    Baker, Nicholas (North Dorset)

    Alison, Rt Hon Michael (Selby)

    Baldry, Tony

    Allason, Rupert (Torbay)

    Banks, Matthew (Southport)

    Amess, David

    Banks, Robert (Harrogate)

    Arnold, Jacques (Gravesham)

    Bates, Michael

    Arnold, Sir Thomas (Hazel Grv)

    Batiste, Spencer

    Ashby, David

    Beggs, Roy

    Atkins, Rt Hon Robert

    Bellingham, Henry

    Atkinson, David (Bour'mouth E)

    Bendall, Vivian

    1077

    Beresford, Sir Paul

    Gill, Christopher

    Biffen, Rt Hon John

    Gillan, Cheryl

    Bonsor, Sir Nicholas

    Goodlad, Rt Hon Alastair

    Boswell, Tim

    Goodson-Wickes, Dr Charles

    Bottomley, Rt Hon Virginia

    Gorman, Mrs Teresa

    Bowis, John

    Gorst, Sir John

    Boyson, Rt Hon Sir Rhodes

    Grant, Sir A (SW Cambs)

    Brandreth, Gyles

    Greenway, Harry (Ealing N)

    Brazier, Julian

    Greenway, John (Ryedale)

    Brooke, Rt Hon Peter

    Griffiths, Peter (Portsmouth, N)

    Brown, M (Brigg & Cl'thorpes)

    Grylls, Sir Michael

    Browning, Mrs Angela

    Gummer, Rt Hon John Selwyn

    Bruce, Ian (South Dorset)

    Hague, Rt Hon William

    Budgen, Nicholas

    Hamilton, Rt Hon Sir Archibald

    Burt, Alistair

    Hamilton, Neil (Tatton)

    Butler, Peter

    Hampson, Dr Keith

    Butterfill, John

    Hanley, Rt Hon Jeremy

    Carlisle, John (Luton North)

    Hannam, Sir John

    Carrington, Matthew

    Hargreaves, Andrew

    Carttiss, Michael

    Harris, David

    Cash, William

    Haselhurst, Sir Alan

    Channon, Rt Hon Paul

    Hawkins, Nick

    Chapman, Sir Sydney

    Hawksley, Warren

    Churchill, Mr

    Hayes, Jerry

    Clappison, James

    Heald, Oliver

    Clark, Dr Michael (Rochford)

    Heathcoat-Amory, Rt Hon David

    Clarke, Rt Hon Kenneth (Ru'clif)

    Hendry, Charles

    Clifton-Brown, Geoffrey

    Heseltine, Rt Hon Michael

    Coe, Sebastian

    Hicks, Robert

    Colvin, Michael

    Higgins, Rt Hon Sir Terence

    Congdon, David

    Hogg, Rt Hon Douglas (G'tham)

    Coombs, Anthony (Wyre For'st)

    Horam, John

    Coombs, Simon

    Hordern, Rt Hon Sir Peter

    Cope, Rt Hon Sir John

    Howell, Sir Ralph (N Norfolk)

    Cormack, Sir Patrick

    Hughes, Robert G (Harrow W)

    Couchman, James

    Hunt, Rt Hon David (Wirral W)

    Cran, James

    Hunt, Sir John (Ravensbourne)

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

    Hunter, Andrew

    Curry, David (Skipton & Ripon)

    Hurd, Rt Hon Douglas

    Davies, Quentin (Stamford)

    Jack, Michael

    Davis, David (Boothferry)

    Jackson, Robert (Wantage)

    Day, Stephen

    Jenkin, Bernard

    Deva, Nirj Joseph

    Jessel, Toby

    Devlin, Tim

    Johnson Smith, Sir Geoffrey

    Dicks, Terry

    Jones, Robert B (W Hertfdshr)

    Dorrell, Rt Hon Stephen

    Kellett-Bowman, Dame Elaine

    Douglas-Hamilton, Lord James

    Key, Robert

    Dover, Den

    Kirkhope, Timothy

    Duncan-Smith, Iain

    Knapman, Roger

    Dunn, Bob

    Knight, Mrs Angela (Erewash)

    Dykes, Hugh

    Knight, Rt Hon Greg (Derby N)

    Elletson, Harold

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

    Evans, David (Welwyn Hatfield)

    Kynoch, George (Kincardine)

    Evans, Jonathan (Brecon)

    Lait, Mrs Jacqui

    Evans, Nigel (Ribble Valley)

    Lang, Rt Hon Ian

    Evans, Roger (Monmouth)

    Lawrence, Sir Ivan

    Evennett, David

    Legg, Barry

    Faber, David

    Leigh, Edward

    Fabricant, Michael

    Lennox-Boyd, Sir Mark

    Fenner, Dame Peggy

    Lester, Sir James (Broxtowe)

    Field, Barry (Isle of Wight)

    Lidington, David

    Fishburn, Dudley

    Lilley, Rt Hon Peter

    Forman, Nigel

    Lord, Michael

    Forsyth, Rt Hon Michael (Stirling)

    Luff, Peter

    Forsythe, Clifford (S Antrim)

    Lyell, Rt Hon Sir Nicholas

    Forth, Eric

    MacGregor, Rt Hon John

    Fowler, Rt Hon Sir Norman

    MacKay, Andrew

    Fox, Dr Liam (Woodspring)

    Maclean, Rt Hon David

    Fox, Rt Hon Sir Marcus (Shipley)

    McLoughlin, Patrick

    Freeman, Rt Hon Roger

    McNair-Wilson, Sir Patrick

    French, Douglas

    Maginnis, Ken

    Fry, Sir Peter

    Maitland, Lady Olga

    Gale, Roger

    Malone, Gerald

    Gallie, Phil

    Mans, Keith

    Gardiner, Sir George

    Marland, Paul

    Garnier, Edward

    Marlow, Tony

    1078

    Marshall, John (Hendon S)

    Spicer, Sir James (W Dorset)

    Martin, David (Portsmouth S)

    Spicer, Sir Michael (S Worcs)

    Mawhinney, Rt Hon Dr Brian

    Spink, Dr Robert

    Mayhew, Rt Hon Sir Patrick

    Spring, Richard

    Mellor, Rt Hon David

    Sproat, Iain

    Merchant, Piers

    Squire, Robin (Hornchurch)

    Mills, Iain

    Stanley, Rt Hon Sir John

    Mitchell, Andrew (Gedling)

    Steen, Anthony

    Mitchell, Sir David (NW Hants)

    Stephen, Michael

    Moate, Sir Roger

    Stewart, Allan

    Molyneaux, Rt Hon Sir James

    Streeter, Gary

    Monro, Rt Hon Sir Hector

    Sumberg, David

    Montgomery, Sir Fergus

    Sweeney, Walter

    Needham, Rt Hon Richard

    Sykes, John

    Nelson, Anthony

    Tapsell, Sir Peter

    Neubert, Sir Michael

    Taylor, Ian (Esher)

    Newton, Rt Hon Tony

    Taylor, Rt Hon John D (Strgfd)

    Nicholls, Patrick

    Taylor, John M (Solihull)

    Nicholson, David (Taunton)

    Taylor, Sir Teddy (Southend, E)

    Norris, Steve

    Temple-Morris, Peter

    Onslow, Rt Hon Sir Cranley

    Thomason, Roy

    Oppenheim, Phillip

    Thompson, Patrick (Norwich N)

    Ottaway, Richard

    Thornton, Sir Malcolm

    Page, Richard

    Thumham, Peter

    Paice, James

    Townend, John (Bridlington)

    Patnick, Sir Irvine

    Townsend, Cyril D (Bexl'yh'th)

    Patten, Rt Hon John

    Tracey, Richard

    Pawsey, James

    Tredinnick, David

    Peacock, Mrs Elizabeth

    Trend, Michael

    Pickles, Eric

    Trimble, David

    Porter, Barry (Wirral S)

    Trotter, Neville

    Porter, David (Waveney)

    Twinn, Dr Ian

    Portillo, Rt Hon Michael

    Vaughan, Sir Gerard

    Powell, William (Corby)

    Viggers, Peter

    Rathbone, Tim

    Waldegrave, Rt Hon William

    Redwood, Rt Hon John

    Walden, George

    Renton, Rt Hon Tim

    Walker, A Cecil (Belfast N)

    Richards, Rod

    Walker, Bill (N Tayside)

    Riddick, Graham

    Waller, Gary

    Robathan, Andrew

    Ward, John

    Robertson, Raymond (Ab'd'n S)

    Wardle, Charles (Bexhill)

    Robinson, Mark (Somerton)

    Waterson, Nigel

    Roe, Mrs Marion (Broxbourne)

    Watts, John

    Ross, William (E Londonderry)

    Wells, Bowen

    Rowe, Andrew (Mid Kent)

    Whitney, Ray

    Rumbold, Rt Hon Dame Angela

    Whittingdale, John

    Ryder, Rt Hon Richard

    Widdecombe, Ann

    Sackville, Tom

    Wiggin, Sir Jerry

    Scott, Rt Hon Sir Nicholas

    Wilkinson, John

    Shaw, David (Dover)

    Willetts, David

    Sheldon, Rt Hon Robert

    Winterton, Mrs Ann (Congleton)

    Shephard, Rt Hon Gillian

    Winterton, Nicholas (Macc'f'ld)

    Shepherd, Sir Colin (Hereford)

    Wolfson, Mark

    Shepherd, Richard (Aldridge)

    Wood, Timothy

    Shersby, Sir Michael

    Yeo, Tim

    Sims, Roger

    Young, Rt Hon Sir George

    Skeet, Sir Trevor

    Smith, Tim (Beaconsfield)

    Tellers for the Ayes:

    Smyth, The Reverend Martin

    Mr. Derek Conway and

    Soames, Nicholas

    Mr. Simon Burns.

    NOES

    Abbott, Ms Diane

    Benn, Rt Hon Tony

    Adams, Mrs Irene

    Bennett, Andrew F

    Ainsworth, Robert (Cov'try NE)

    Bermingham, Gerald

    Allen, Graham

    Berry, Roger

    Alton, David

    Blair, Rt Hon Tony

    Anderson, Donald (Swansea E)

    Blunkett, David

    Anderson, Ms Janet (Ros'dale)

    Boateng, Paul

    Armstrong, Hilary

    Bradley, Keith

    Ashdown, Rt Hon Paddy

    Bray, Dr Jeremy

    Austin-Walker, John

    Brown, Gordon (Dunfermline E)

    Barnes, Harry

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

    Battle, John

    Bruce, Malcolm (Gordon)

    Bayley, Hugh

    Burden, Richard

    Beckett, Rt Hon Margaret

    Byers, Stephen

    1079

    Caborn, Richard

    Hood, Jimmy

    Callaghan, Jim

    Hoon, Geoffrey

    Campbell, Mrs Anne (C'bridge)

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

    Campbell, Menzies (Fife NE)

    Howarth, George (Knowsley North)

    Campbell, Ronnie (Blyth V)

    Howells, Dr Kim (Pontypridd)

    Campbell-Savours, D N

    Hoyle, Doug

    Canavan, Dennis

    Hughes, Kevin (Doncaster N)

    Cann, Jamie

    Hughes, Simon (Southwark)

    Carlile, Alexander (Montgomery)

    Hutton, John

    Chidgey, David

    Illsley, Eric

    Chisholm, Malcolm

    Ingram, Adam

    Church, Judith

    Jackson, Glenda (H'stead)

    Clapham, Michael

    Jackson, Helen (Shef'ld, H)

    Clark, Dr David (South Shields)

    Jamieson, David

    Clarke, Eric (Midlothian)

    Jones, Ieuan Wyn (Ynys Môn)

    Clarke, Tom (Monklands W)

    Jones, Jon Owen (Cardiff C)

    Clwyd, Mrs Ann

    Jones, Lynne (B'ham S O)

    Coffey, Ann

    Jones, Martyn (Clwyd, SW)

    Cohen, Harry

    Jones, Nigel (Cheltenham)

    Connarty, Michael

    Jowell, Tessa

    Cook, Frank (Stockton N)

    Keen, Alan

    Cook, Robin (Livingston)

    Kennedy, Charles (Ross,C&S)

    Corbett, Robin

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

    Corston, Jean

    Khabra, Piara S

    Cousins, Jim

    Kilfoyle, Peter

    Cunningham, Jim (Covy SE)

    Kirkwood, Archy

    Cunningham, Roseanna

    Lestor, Joan (Eccles)

    Darling, Alistair

    Lewis, Terry

    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

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

    Loyden, Eddie

    Denham, John

    Lynne, Ms Liz

    Dixon, Don

    McAllion, John

    Dobson, Frank

    McAvoy, Thomas

    Donohoe, Brian H

    McCartney, Ian

    Dowd, Jim

    McCartney, Robert

    Dunwoody, Mrs Gwyneth

    Macdonald, Calum

    Eagle, Ms Angela

    McFall, John

    Etherington, Bill

    McGrady, Eddie

    Evans, John (St Helens N)

    McKelvey, William

    Ewing, Mrs Margaret

    McLeish, Henry

    Fatchett, Derek

    Maclennan, Robert

    Faulds, Andrew

    McMaster, Gordon

    Field, Frank (Birkenhead)

    McNamara, Kevin

    Flynn, Paul

    McWilliam, John

    Foster, Rt Hon Derek

    Madden, Max

    Foster, Don (Bath)

    Maddock, Diana

    Foulkes, George

    Mahon, Alice

    Fyfe, Maria

    Marshall, David (Shettleston)

    Galbraith, Sam

    Marshall, Jim (Leicester, S)

    Galloway, George

    Martin, Michael J (Springburn)

    Gapes, Mike

    Martlew, Eric

    George, Bruce

    Maxton, John

    Gerrard, Neil

    Michael, Alun

    Godman, Dr Norman A

    Michie, Mrs Ray (Argyll & Bute)

    Godsiff, Roger

    Milburn, Alan

    Golding, Mrs Llin

    Mitchell, Austin (Gt Grimsby)

    Gordon, Mildred

    Moonie, Dr Lewis

    Graham, Thomas

    Morgan, Rhodri

    Grant, Bernie (Tottenham)

    Morley, Elliot

    Griffiths, Nigel (Edinburgh S)

    Morris, Rt Hon Alfred (Wy'nshawe)

    Griffiths, Win (Bridgend)

    Morris, Rt Hon John (Aberavon)

    Gunnell, John

    Mowlam, Marjorie

    Hain, Peter

    Mudie, George

    Hall, Mike

    Mullin, Chris

    Hanson, David

    Murphy, Paul

    Harvey, Nick

    Oakes, Rt Hon Gordon

    Henderson, Doug

    O'Brien, Mike (N W'kshire)

    Hill, Keith (Streatham)

    O'Brien, William (Normanton)

    Hinchliffe, David

    Olner, Bill

    Hodge, Margaret

    O'Neill, Martin

    Hoey, Kate

    Pearson, Ian

    Home Robertson, John

    Pickthall, Colin

    1080

    Pike, Peter L

    Steel, Rt Hon Sir David

    Pope, Greg

    Steinberg, Gerry

    Powell, Ray (Ogmore)

    Stevenson, George

    Prentice, Bridget (Lew'm E)

    Stott, Roger

    Prescott, Rt Hon John

    Straw, Jack

    Primarolo, Dawn

    Taylor, Mrs Ann (Dewsbury)

    Purchase, Ken

    Taylor, Matthew (Truro)

    Quin, Ms Joyce

    Timms, Stephen

    Radice, Giles

    Tipping, Paddy

    Randall, Stuart

    Touhig, Don

    Raynsford, Nick

    Trickett, Jon

    Rendel, David

    Tyler, Paul

    Robertson, George (Hamilton)

    Vaz, Keith

    Robinson, Geoffrey (Co'try NW)

    Walker, Rt Hon Sir Harold

    Robinson, Peter (Belfast E)

    Wallace, James

    Roche, Mrs Barbara

    Walley, Joan

    Rooney, Terry

    Wardell, Gareth (Gower)

    Ross, Ernie (Dundee W)

    Wareing, Robert N

    Rowlands, Ted

    Watson, Mike

    Welsh, Andrew

    Ruddock, Joan

    Wicks, Malcolm

    Salmond, Alex

    Williams, Rt Hon Alan (Sw'n W)

    Sedgemore, Brian

    Williams, Alan W (Carmarthen)

    Sheerman, Barry

    Wilson, Brian

    Short, Clare

    Wise, Audrey

    Simpson, Alan

    Worthington, Tony

    Skinner, Dennis

    Wray, Jimmy

    Smith, Andrew (Oxford E)

    Wright, Dr Tony

    Smith, Llew (Blaenau Gwent)

    Young, David (Bolton SE)

    Soley, Clive

    Spearing, Nigel

    Tellers for the Noes:

    Spellar, John

    Mr. David Clelland and

    Squire, Rachel (Dunfermline W)

    Mr. John Cummings.

    Question accordingly agreed to.
    Clause read a Second time, and added to the Bill.
    Mr. Devlin: On a point of order, Madam Speaker. The new clause that we have just passed exempts Ministers and the Leader of the Opposition from paying tax on the cars provided for them for the purpose of carrying out their duties. Given that the right hon. Member for Sedgefield (Mr. Blair) and his party voted against that new clause, will the right hon. Gentleman now do the honourable thing and pay the tax anyway?
    Madam Speaker: That is not a point of order for me; it is a point that should have been debated when we were debating the new clause.

  New clause 17

    LIFE ASSURANCE BUSINESS LOSSES
    `. Schedule (Life assurance business losses) to this Act, which makes provision about losses arising to insurance companies in the carrying on of life assurance business, shall have effect.'.—[Mr. Jack.]
    Brought up, and read the First time.
    Mr. Jack: I beg to move, That the clause be read a Second time.
    Madam Speaker: With this, it will be convenient to discuss also Government amendments Nos. 65 to 67.
    Mr. Jack: The new clause and the schedule in amendment No. 65 fulfil an undertaking I gave in Committee to my hon. Friend the Member for Beaconsfield (Mr. Smith) that, if possible, we would introduce our own provision to do what his new clause 38 sought to do.

    1081
    The schedule amends a rule introduced in last year's Finance Act—a very necessary rule, designed to stop the creation of wholly artificial losses in a life insurance company. My hon. Friend and the life insurance industry think that we went too far last year. In particular, it is said that the 1995 rule bore too harshly on companies just starting up, and discouraged new entrants to the life insurance market. We have found a way of allowing start-up life insurance companies to use their losses within a group, as any other company would.
    The new clause and the schedule identify circumstances in which the 1995 rule will continue to apply—where there is a takeover, including one following a demutualisation, and where the business is split by way of reinsurance or transfer of business. It will no longer apply to the start-up company where losses arise through normal patterns of business.
    The measures in the schedule also clarify and amend existing rules preventing double relief for losses. If we relax the 1995 rule to allow more losses to arise than in the past, it is important that we have robust rules to prevent double relief.
    Associated with the new schedule is a purely consequential amendment to schedule 13, and an amendment to the repeals schedule.
    Mr. Tim Smith: As you will have gathered, Madam Speaker, this is effectively a piece of unfinished business from last year's Finance Act. We discussed it in Committee, and I am grateful to my hon. Friend the Financial Secretary to the Treasury for bringing the measure forward.
    Mr. Alistair Darling: I think that there is unanimity that the new clause should be added to the Bill, but I want to make one small point, which follows to some extent from the previous debate. The schedule is extremely complex. I understand why it is complex, and I support what it aims to do, but its complexity raises a point that has been identified again and again during the Bill's passage through the House. That is that Parliament is passing complex legislation without adequate scrutiny. It is not possible on Report to go through a schedule or a new clause in anything like the detail possible in Committee.
    The new clause and the schedule were tabled comparatively recently, and, as far as I know, there is nothing wrong with the drafting, and there are no unintended consequences. But I say "as far as I know", because the fact is that we do not know. The chances are that a further amendment will be necessary if we are debating the measure this time next year. Understandably, the industry complains about the way in which Parliament treats it, as the changes and uncertainty add to the cost and other complications faced by the corporate taxpayer, as well as by the individual taxpayer.
    I repeat my request for the Government to do two things. First—in so far as they can—they should avoid tabling complicated and lengthy pieces of legislation at the eleventh hour. Secondly, they should reflect further on a point raised by a number of hon Members—the desirability of transferring certain aspects of the Finance Act to a taxes management Act, where they can be looked at with greater leisure.
    1082
    There is no political difference between the parties on these points, which are technical to a large extent, and we all agree on the objective. But we are not making good law by dealing with complex matters at the last possible moment. I agree with the measure, and I understand why the Financial Secretary has brought it before the House at this stage. But the Government ought to try harder to avoid getting themselves into such situations in the years to come.
    Mr. Jack: If there is one thing that I have learnt from my first ministerial involvement in the Finance Bill, it is that there is a need for the earliest possible consultation to take place with interested parties on complex matters. I understand the point raised by the hon. Member for Edinburgh, Central (Mr. Darling), and I take his message to heart.
    In fairness, the matters dealt with by the new clause were discussed thoroughly in 1995. My hon. Friend the Member for Beaconsfield (Mr. Smith) tabled an amendment in Committee that the Government, while unable to accept it in the letter, certainly accepted in spirit. That is why we worked hard and fast—given that this is a complex matter—to try to meet the request of the life insurance industry.
    Clearly the industry was party to the discussions in the period between the Committee and now, but I accept that others may not have had the chance to scrutinise the precise words. Those directly affected by the measure, however, have studied them, and are grateful and pleased by the moves we have made. I take the hon. Member for Edinburgh Central' s point. It is sensible, and I shall bear it in mind when dealing with future Finance Bills.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

  New clause 3

    PERSONAL PENSION SCHEMES: RETURN OF CONTRIBUTIONS AFTER DEATH OF MEMBER
    `.—(1) In section 633(1) of the Taxes Act 1988 (Board not to approve a personal pension scheme which makes provision for any benefit other than those specified in paragraphs (a) to (e)) in paragraph (e) (payment on or after the death of a member of a lump sum satisfying the conditions in section 637A) for the words following "a lump sum" there shall be substituted "with respect to which the conditions in section 637A (return of contributions) are satisfied".
    (2) For section 637A of that Act (return of contributions on or after death of member) there shall be substituted—

    Return of contributions on or after death of member
    637A.—(1) The lump sum payable under the arrangements in question (or, where two or more lump sums are so payable, those lump sums taken together) must represent no more than the return of contributions together with reasonable interest on contributions or bonuses out of profits, after allowing for—

    (a) any income withdrawals, and

    (b) any purchases of annuities such as are mentioned in section 636.

    To the extent that contributions are invested in units under a unit trust scheme, the lump sum (or lump sums) may represent the sale or redemption price of the units.
    (2) A lump sum must be payable only if, in the case of the arrangements in question,—

    1083

    (a) no such annuity as is mentioned in section 634 has been purchased by the member;

    (b) no such annuity as is mentioned in section 636 has been purchased in respect of the relevant interest; and

    (c) no election in accordance with subsection (5)(a) of section 636 has been made in respect of the relevant interest.

    (3) Where the member's death occurs after the date which is his pension date in relation to the arrangements in question, a lump sum must not be payable more than two years after the death unless, in the case of that lump sum, the person entitled to such an annuity as is mentioned in section 636 in respect of the relevant interest—

    (a) has elected in accordance with section 636A to defer the purchase of an annuity; and

    (b) has died during the period of deferral.

    (4) In this section "the relevant interest" means the interest, under the arrangements in question, of the person to whom or at whose direction the payment in question is made, except where there are two or more such interests, in which case it means that one of them in respect of which the payment is made.
    (5) Where, under the arrangements in question, there is a succession of interests, any reference in subsection (2) or (3) above to the relevant interest includes a reference to any interest (other than that of the member) in relation to which the relevant interest is a successive interest."
    (3) This section—

    (a) has effect in relation to approvals, of schemes or amendments, given under Chapter IV of Part XIV of the Taxes Act 1988 (personal pension schemes) after the passing of this Act; and

    (b) does not affect any approval previously given.'.—[Mrs. Angela Knight.]

    Brought up, and read the First time.
    The Economic Secretary to the Treasury (Mrs. Angela Knight): I beg to move, That the clause be read a Second time.
    Where a member of a personal pension scheme dies without purchasing an annuity and the survivor—that is, the spouse or dependant—also dies before purchasing an annuity, the new clause allows a pension fund to pass to the survivor's heir, however long a period has elapsed since the original member's death. This is presently possible within two years of the member's death. In other words, the new clause extends the circumstances in which a personal pension fund may be paid as a lump sum. The new clause has been tabled in response to representations that we have received. It is widely welcomed, and I trust that all hon. Members support it.
    Mr. Darling: The Opposition do indeed support the new clause.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

  New clause 16

    CAPITAL ALLOWANCES: ROLL-OVER RELIEF IN RESPECT OF SHIPS
    '. Schedule (Roll—over relief in respect of ships) to this Act (which amends sections 33A to 33F of the Capital Allowances Act 1990) shall have effect.'.—[Mr. Jack.]
    Brought up, and read the First time.
    Mr. Jack: I beg to move, That the clause be read a Second time.
    Madam Speaker: With this, it will be convenient to discuss also Government amendments Nos. 63 and 64.
    Mr. Jack: During the Committee's debates on shipping, I said that the Government were not opposed in principle to extending rollover relief for balancing charges arising on ships across groups of companies. We had discussions with the shipping industry, and we made rapid progress. I am pleased to be able to say that we reached agreement on the matter, and I commend new clause 16 to the House.
    Mr. David Hunt: I would like to thank my hon. Friend the Financial Secretary and congratulate all those involved on some speedy work. I pressed my hon. Friend to try to ensure that the work was done in time for this Finance Bill, and that has been done. I am sure that the measure will overcome a number of anomalies, and will enable a number of investment decisions to be made that might otherwise not be made, or perhaps might not be so well-timed.
    My hon. Friend will know that I have raised a number of other matters on behalf of the shipping industry, an industry that is vital to the future of this country. I am grateful to him for agreeing that further meetings can take place, so that we can explore a number of other matters further.
    Mr. Mike O'Brien: The Opposition welcome and support the new clause.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

  New clause 1

    REPORT ON EMPLOYMENT AND JOB INSECURITY
    `.—Not later than 1st November 1996, the Treasury shall prepare and lay before Parliament a report which assesses the impact of the provisions of this Act and of the Budget measures introduced on 28th November 1995 on employment and job insecurity in the United Kingdom.'.—[Mr. Andrew Smith.]
    Brought up, and read the First time.
    6.45 pm
    Mr. Andrew Smith: I beg to move, That the clause be read a Second time.
    The new clause calls for a report to be made on the effects of the Budget and the Finance Bill on employment and job insecurity. We see this as part of the focus that this country needs on employment generation and tackling job insecurity. We are arguing that the measures in the Budget and the Finance Bill should be assessed for their effects on jobs and on helping people into jobs in a far more comprehensive and purposeful way than happens at present. We believe that the "Financial Statement and Budget Report"—the Red Book—which quite properly devotes substantial space to the effect of the Budget's tax and public spending proposals on revenue yields and costs, borrowing and the public finances, ought also to evaluate the employment implications.

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    That is especially important at present, when Britain has not only 2.2 million unemployed, but 800,000 long-term unemployed and 600,000 young unemployed. Even when unemployment has fallen, there has not been a corresponding increase in employment. Job insecurity has become a more pressing concern for millions of people, and Conservative Members would do well to remember that when they attempt to boast about the Government's record on unemployment.
    If Conservative Members want an explanation why the so-called feel-good factor remains so elusive, they need look no further than the fact that, on top of the Government's betrayal on tax promises and on top of last year's fall in living standards—the sharpest for 14 years—we still have not only high unemployment, but many people in work suffering downward mobility and insecurity, and people riddled with anxiety about how long their job will last and what will happen if they lose it.
    It is true that there are already some contributions on the labour market within the "Financial Statement and Budget Report". For example, in annex B to chapter 3 of last year's Red Book, there are some interesting remarks by the Treasury's panel of independent advisers that some Conservative Members seem to ignore when making claims about unemployment. For example, on page 61 it says:
    "The recovery in the labour market appears to be losing momentum. Employment growth has slowed, and the rate of decline of unemployment has slowed sharply."
    There follows an analysis of the dismal employment record in this recovery compared with previous recoveries, concluding that
    "it is clear that there has been a substantial increase in numbers counted as economically inactive … the peculiar feature of the recovery … is that participation has not picked up."
    Although it is helpful to have that evaluation of the labour market from the panel, the new clause argues that we should go beyond that and focus attention much more closely on the employment implications of the Budget measures themselves. For example, it would be useful to have a broad report on the composition of the labour market, categorised by tenure in terms of part-time, full-time, temporary and self-employed employment. Each category could be analysed in terms of qualification for employment rights and turnover within the category.
    At present, those in full-time work qualify for full rights after two years of service, and that requirement rises to five years for those in part-time work. It would therefore be important to include an analysis of turnover within each category and between categories, so that the extent of job insecurity can be properly ascertained.
    As well as analysis of the labour market broken down into those categories, it would be useful to assess the direct effects of the Budget on new jobs. Employment creation should be broken down in the same way as the fuller picture of the labour market to keep track of any headway being made on countering job insecurity and encouraging quality employment.
    On a more specific basis, the impact of Budget changes in tax, expenditure or national insurance could be more directly assessed in terms of jobs and employment. For example, in this year's Red Book, the revenue implications for the extension of the rebate on employers' national
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    insurance contributions for the long-term unemployed are listed on page 107. They are costed at £5 million in 1996–97 and 1997–98 and £10 million in 1998–99, but there is no mention of the corresponding impact on alleviating long-term unemployment within the Red Book—the very purpose that is argued for the measure.
    In future years, that could with benefit be factored in for specific taxation and expenditure measures. In addition, the much broader impact on employment of Government policies on taxation, national insurance contributions and employment rights in the tenure and distribution of the labour market, both for existing jobs and for those newly created, could be included. We want that information not merely for the better analysis of what is happening, but to focus attention on the need for action if unemployment and job insecurity are to be tackled with real effect.
    Since the publication of the Red Book last November, the picture has worsened further. Unemployment rose last month for the first time in two years, to reach more than 2.2 million. Not only is mass unemployment a symptom of Tory Britain, but, under the present Government, the 1990s have become a decade of mass downward mobility and insecurity. Many of those who have jobs are insecure in them and overshadowed by the threat of redundancy. Many are having to move into lower-paid jobs, with less secure contracts and conditions.
    What is more, whatever the convenience and attraction of part-time work for many employees, which we recognise, according to the March labour force survey, nearly half the men in part-time work say that they work part-time because they cannot get a full-time job. The facts speak for themselves. Our analysis has revealed that more than 8 million people have had at least one spell of unemployment since the last general election. This year, more than 2 million new people are likely to experience a spell of unemployment, and, since the Prime Minister took office in 1990, no fewer than 10 million people have experienced one or more spells of unemployment. That is one in four of the working population.
    Mr. Nigel Forman: So that we get the figures in context, can the hon. Gentleman tell the House the average length of the period of unemployment that those 8 million people experienced?
    Mr. Smith: I do not have the figure to hand, but any period of unemployment is too long for those who suffer it. The aim of public policy in the area—the role of the state in assisting the individual—should be to help to equip them with the skills to ensure that they can get back into quality employment as quickly as possible. In that sense, the true measure of the success of policies to counter unemployment is not merely, where appropriate, to attenuate the rate at which people are losing jobs, but to ensure that, when they do lose them, they are in a position to get back into jobs.
    The tragedy at the moment is that 2.2 million people are unemployed, another 2 million are likely to experience a spell of unemployment this year, and there are 800,000 long-term unemployed, who have been out of work for more than a year, and 600,000 young unemployed, for whom I hope the whole House would agree there is a case for priority action.
    In practice, the Government's record on these matters matches neither their claims nor the needs of the country. We hear many comparisons with the rest of the European

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    Union from Conservative Members, yet the United Kingdom's record on job generation since 1979 has been the worst among the major European countries. To take a wider comparison—these figures are based on a parliamentary answer—employment in the United States has grown 21 times faster than that in the United Kingdom since 1979, and in Japan it has grown 18 times faster.
    As we know, unemployment has more than doubled under this Government. Since the last general election, there has been no increase in full-time or permanent employment.
    Mr. Forman: Taking up the comparison with the United States, does the hon. Gentleman concede that most experts agree that one of the main reasons why the United States has generated more jobs than this country in that period, and far more than our partners on the continent is that it has a more deregulated labour market, with a more flexible attitude—more akin to our attitude than that of countries on the continent?
    Mr. Smith: I would not equate the words "flexible labour market" with a deregulated labour market in quite the way that the hon. Gentleman does, and there are many people in the United States who would not do so either. For example, to draw on the analysis of the operation of minimum wage legislation there, studies demonstrate that, where that wage has been increased—contrary to the arguments that many Conservative Members put forward—it has not led to a rise in unemployment. On the contrary, in the industries covered, it has led to a rise in employment. It is a mistake, therefore, for the hon. Gentleman to equate a flexible labour market, or an acceptably flexible market, with blanket deregulation.
    In a modern labour market, of course we want flexibility, but we also want civilised conditions for the work force and proper support from the Government to equip people for success and to help them to meet the challenges that confront us all in a rapidly changing world. Judged by their record throughout their time in office, Conservative Members and their Government fail that test.
    As we have pointed out a number of times since the Prime Minister took office, there are 1 million fewer people in jobs. Male unemployment in the United Kingdom is higher than the European average. On the Government's own figures, the financial cost of unemployment is more than £20 billion a year to the taxpayer, and that is before one counts the human cost of the misery and insecurity attached to unemployment, which has rocketed under this Government.
    The truth is also that, under this Government, more people are suffering insecurity and downward mobility. Just as Britain has fallen from 13th to 18th down the world prosperity league, so millions of people are sliding down the personal prosperity league. That downward mobility is a scar across the face of Britain in the 1990s. That is why we have argued for measures to help people from welfare into work and off benefit into jobs.
    The public will not be persuaded by the Government's credentials when they do not take up our proposals to help the young and the long-term unemployed into work. Instead, the Prime Minister threatens to withdraw employment rights from millions of workers in small businesses thereby exacerbating the crisis of insecurity
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    that he should be seeking to solve. The Government have taken no action on the measures that we have suggested to help people off welfare into work. Instead, they are cutting the training budget and have abolished the community action programme, which only a year earlier they boasted was providing 40,000 quality, paid places for the some of the most vulnerable people in our society.
    7 pm
    The Finance Bill has failed to address the disastrous unemployment and job insecurity in Britain. Our proposals for welfare-to-work, investment, skills and public-private partnership have made clear our commitment to act where the Government have failed to act. Our policy statements make it clear that our commitment to a medium-term objective of raising the trend rate of growth, with low inflation, will be accompanied by an annual statement of the implications for employment of our policies and the ways in which they can be increased.
    Mr. Jack: The hon. Gentleman fleetingly mentioned his target for growth. I would be most interested if he could tell us what it would be in numerical terms.
    Mr. Smith: I said that we would have a medium-term strategy to raise the trend rate of growth, which under the Conservative Government since 1979, has been 1.9 per cent. including oil and 1.7 per cent. excluding it—one of the worst records of any industrialised country. Britain can and must do better and with Labour, it will. It is in that spirit that we bring new clause 1 before Parliament tonight. If the Government were serious about tackling the crisis of unemployment and job insecurity, a sensible first move would be to support new clause 1, publish the report that we call for and to act on it to ensure that each and every Budget measure generates work and eases the chronic problem of job insecurity that afflicts so many millions of people.
    Mr. Forman: I am grateful to you, Madam Speaker, for calling me in this crowded debate. I wish to comment on new clause 1 and on the speech of the hon. Member for Oxford, East (Mr. Smith). I am sure that he really knows—he is more sensible than he appears—that Government strategies do not create new jobs, but that enterprising firms and individuals do. To answer my hon. Friend the Financial Secretary by saying that the Labour party does not have a target for growth but has a strategy, as if that were a guarantee of job prospects for people without jobs, is a grievous error that would mislead our people, if ever they were unfortunate enough to have a Labour Government. The Labour party is wise not to have a target, because such things usually end in tears, as happened with the national plan and George Brown in 1965.
    There is no need for the sort of report that new clause 1 demands. The debate gives the Labour party an opportunity to indulge its normal habit of scaremongering on the important and sensitive question of job insecurity. I do not deny that there is much job insecurity. That is evident to all hon. Members from our surgeries and from what we read and learn about. The question is how best to deal with that psychological and real problem and how best to address the concerns of people who feel insecure.
    Insecurity matters most for those who are out of work and finding it difficult to get back into work. I am glad that the Government are bringing forward a range of

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    measures, both in this Budget and in other aspects of policy, which are designed to create jobs and make people feel more confident about their lives. I draw the attention of the hon. Member for Oxford, East to the measures that are summarised right at the beginning of the Red Book under the heading, "Encouraging enterprise and helping business". For example, there is the reduction of the small companies rate of corporation tax to 24p rather than 25p.
    Mr. Andrew Smith: Does not it make my point that jobs, unemployment and work insecurity are not mentioned in that list of Budget measures?
    Mr. Forman: The benefit to people who have those problems derives from concrete measures, in the Budget and elsewhere, and not necessarily from more paragraphs that recognise the problem. My right hon. and learned Friend the Chancellor of the Exchequer, in his Mais lecture some time ago, made it clear that this is an important problem that the Government are addressing. I was trying to convey that the Government have taken practical measures. There is more help for businesses facing higher rate bills following last year's revaluation. We have mentioned already that employers' national insurance contributions are to be cut by £500 million from April 1997.
    More importantly, the Finance Bill, and the Budget from which it flows, created the macro-economic and market conditions in which it has been possible for my right hon. and learned Friend the Chancellor further to cut interest rates. A prudent Budget and the effects of reduced interest rates, which are lower than they were at the time of the Budget, help to create new jobs and underpin the strength of the economic recovery, which mercifully, has been carried forward on a largely non-inflationary basis.
    First, the Finance Bill contains useful measures that are designed to address the problems in the labour market. Secondly, the Budget has facilitated, through its fiscal prudence, a cut in interest rates. Thirdly, the background to the labour market is not as bleak or unsatisfactory as the hon. Member for Oxford, East implied. Paragraph 3.44 of the Red Book shows that although there was a period when the number of economically active people in Britain fell by more than 110,000, between the winters of 1992–93 and 1994–95, it has since risen by more than 140,000. Indeed, it is rising again partly because more people are being attracted into the labour force by the better job prospects to which I have already referred. Having gone through something of a trough, the labour market is manifestly improving. As it improves, so people will feel more secure about their employment prospects.
    The hon. Member for Oxford, East talked about part-time work, but he must know that the majority of people in part-time work do it because it suits them, especially women with young children of school age, who want jobs with hours that fit in with their parental responsibilities. However, that is not confined to that group. That preference is increasingly true of the older worker, the professional or other worker in what Charles Handy calls the third age. People of my age, aged over 45 or 50, often find that their needs are well met by what Charles Handy calls a portfolio of employment activity, some of it self-employed, some of it employed.
    Mr. Andrew Smith: Does the hon. Gentleman recall that I acknowledged that part-time work was convenient and attractive for many workers? That is not a reason to deny part-time workers full employment rights in the way in which Conservative Members are inclined to. Equally, I pointed out—and this is in the March labour force survey—that more than half the men working part time do so because they cannot find full-time jobs.
    Mr. Forman: I am sure that we shall have to assist people to retrain and to reskill as a result of the technological changes that are taking place. That is a social priority that the Government are keen to address.
    The hon. Member for Oxford, East prayed in aid the American experience and he contrasted it favourably with that of this country in terms of job creation. However, I said by way of intervention that the United States has been able to create more jobs more consistently over a longer period because it has a flexible labour market. The American Government recognised the fact that the unemployed would rather have even a relatively low-paid job than no job at all. One of the phenomena of the labour market—it is the real tragedy of the 800,000 long-term unemployed in this country—is that the longer one is unemployed, the less employable one becomes.
    It is vital that people should be registered as unemployed for only a short time. The efforts of the Government and of the private and public agencies should be directed at getting people back to work as quickly as possible. Mercifully, the figures suggest that most people are unemployed for only a short duration. It might be helpful if my hon. Friend the Financial Secretary, in winding up this brief debate, could inform the House and the hon. Gentleman about the average duration of unemployment in this country. I believe that the figure is about three months. I am not saying that those three months are not an awkward time for those who are unemployed, but that is to be expected in a flexible labour market where there is a considerable turnover of jobs and much activity. That was the situation under previous Governments and it is likely to continue into the future.
    The argument advanced by the hon. Member for Oxford, East could be regarded as scaremongering, and I do not believe that new clause 1 would serve any constructive purpose.
    Mr. Tipping: New clause 1 is important because it provides an opportunity to check the theory against the practice and to measure the rhetoric against the reality. The new clause seeks to measure the Budget and to assess its impact. My hon. Friend the Member for Oxford, East (Mr. Smith) talked about the national perspective and about job insecurity. I shall refer to job insecurity on a smaller scale as it affects the coalfield communities.
    It is slightly more than three years since the then President of the Board of Trade announced the closure of the coal industry as we knew it around the country. It is important to examine the consequences of that decision and the insecurity felt by those who lost their jobs as a result of the rundown of the industry and by their families.
    In 1980, there were 40,000 miners in Nottinghamshire: today there are about 3,000. Much work has been done within coalfield communities to discover the plight of those who lost their jobs. Their situation is extremely insecure—the figures speak for

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    themselves. Several research studies have been conducted in that area—I recall the work done by the Coalfield Communities Campaign and by Derbyshire county council. They have shown that 50 per cent. of former miners have not found jobs since October 1992.
    The hon. Member for Carshalton and Wallington (Mr. Forman) referred to the length of time that people are unemployed. Some ex-miners have been unemployed for more than three years, and the jobs that they find are not nearly as secure as their former occupations. Former miners typically earn 50 per cent. of the salaries that they received while working in the industry.
    We must introduce measures to create jobs. I agree entirely that we must support firms and new industry, as they are the job creators. The simple fact is that that is not happening. New clause 1 will question the Government's good intentions: it is a means of testing budgetary measures to see whether they will achieve their purpose.
    7.15 pm
    Unemployment has fallen by 17 per cent. nationally since October 1992. However, in the Mansfield travel-towork area, unemployment has fallen by only 7.5 per cent. and in the Worksop travel-to-work area—another coalfield community—unemployment has not decreased at all. The gap between affluent areas and those of disadvantage and deprivation is widening. The Government aspire to change all that, and the Budget aims to foster a climate for creating jobs. I do not wish to be pessimistic, but I share the sense of desolation that permeates coalfield communities: they believe that in November this year, the unemployment figures will not be any better.
    We must find job-creating measures. I am extremely disappointed that the community action programme has been scrapped. It is a young programme that gives people the opportunity to come off welfare and into work. As well as denying those opportunities, its abolition leaves a big gap in the work of voluntary organisations.
    At the time of the Budget announcement, I said that in some parts it could be better and that in other parts it was a green Budget. We could revamp the community action programme and give people the opportunity to do environmental work. Mr. Deputy Speaker, you know about the dereliction that has occurred in coalfield communities: a revamped community action programme could benefit the environment and lift the landscape.
    One budgetary measure aims to reduce the money that is spent on the home energy efficiency scheme. We should look at the consequences of that decision for employment—for example, we know from answers to parliamentary questions that 200,000 fewer homes will be insulated. If the community action programme were thought out properly and geared towards conservation measures, it could create many hundreds of thousands of jobs for young people. It is important to introduce new programmes and to measure their achievements.
    Job creation is not simply a matter for the Government: it will be achieved through partnership, and we must explore what budgetary measures will make that partnership work. I view the new clause as both a signpost and a milestone. It shows the way forward for the objectives that the Budget wants to achieve and it
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    measures them at a later date. Therefore, I have no hesitation in welcoming the new clause, because I know that if we were to change rhetoric into reality in that way, we could create jobs in coalfield communities and across the country.
    Mr. Jack: This is a welcome opportunity for the Government to reply in the context of the Budget and to put on record some of the benefits that will flow from it into the labour market. It was somewhat rich to hear the hon. Member for Oxford, East (Mr. Smith) propose his new clause, particularly when his party subscribes to the minimum wage and the social chapter—both of which, by universal claim by all analysts, would have a depreciating effect on creating jobs in this country.
    One of the things that I have noticed during the passage of the Finance Bill is that the Labour party, if it is in doubt as to what its policies are, asks the Government to produce a report on some aspect of the subject of its concern—we have had that on shipping, on housing investment trusts and on one or two other issues. The Government are now asked to produce a report on the employment impact of the Budget.
    If Labour Members had asked for a report on what we had done about boosting confidence and job security in my right hon. and learned Friend the Chancellor's Budget, I might well have been inclined to say, "Yes, I can produce a report and I can give it to you here and now"—it would have been a copy of my right hon. and learned Friend's Budget speech. Sadly, those are not the terms of the new clause.
    I refer to the minimum wage. This week a MORI poll showed that approximately one third of employers would expect to lay off people if the minimum wage was around £4—that is a devastating indictment of the Labour party's policies. This week I happened to watch "Newsnight", and I listened very carefully to what the shadow Chancellor had to say about the problem.
    Mr. Andrew Smith: And he was very good.
    Mr. Jack: If he was very good, I am sure that he was chastened by what Mr. Michael Swift—who is currently being assisted by the Department for Education and Employment in his search for a job—said when he came to London to hear what the shadow Chancellor had to say. After hearing those ideas, Mr. Swift—who was formerly with Anglian Water—said:
    "At present I cannot see anything radical in today's announcement from the new Labour party at all."
    Mr. David Urp—another gentleman who was working hard; a former export consultant—said:
    "I see it as a very positive point, but I do not see there being a full package here."
    That is not exactly a ringing endorsement of the employment policies put forward by the hon. Member for Oxford, East, in support of the analysis that he asks us to do. In any Budget, it is the sum total of its effects on the totality of the labour market that matters—there are complex interactions. He has asked us to produce a piece of exacting analysis, but that misses the way in which the real world works.
    I shall give the hon. Gentleman the headlines of the report that I should like to write. I pick up the point that my hon. Friend the Member for Carshalton and

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    Wallington (Mr. Forman) raised, when he reminded hon. Members that the landfill tax had given us the flexibility to reduce employers' national insurance charges by 0.2 of 1 per cent.—putting something like £500 million back in the hands of employers, which will no doubt assist them.
    I refer to the income tax changes that we made in relation to the rate and the allowances. They have given a real boost to the incentive to work. I refer to the small companies corporation tax rate, which improves the profitability and the return of small companies. Clause 137 of the Finance Bill extends tax relief on vocational training for people over the age of 30. That is another contribution in the Budget to boost prospects and job security.
    My hon. Friend the Member for Carshalton and Wallington raised some interesting points. He talked about the speed of turnover in the labour market, to which I shall refer in a moment. In response to his specific questions, one in four people are unemployed for less than one month, one in two people are unemployed for less than three months, and two in three people are unemployed for less than six months. That shows that there is fairly rapid turnover in the labour market. The hon. Member for Oxford, East said that up to 8 million people had been touched by unemployment.
    Mr. Andrew Smith: It is 8.7 million people.
    Mr. Jack: Yes, 8.7 million people. The figures show that while people may have been touched by unemployment—we all have sympathy for those who lose their jobs; we want to see them back in work quickly—the policies that the Government have put forward, particularly their many forms of assistance for the unemployed through the work of jobcentres, get them back to work quickly.
    The nature of that work has been raised in the debate. It is interesting to note that, in the European Union, 10.9 per cent. of the work force is on temporary contracts and in this country only 6.3 per cent. of the work force is on such contracts. The United States was mentioned. The average job tenure in the United Kingdom is significantly above that in the United States. Characteristics of our labour force are beneficial. I refer to the proportion of the population that has claimed for benefits in the past five years. It has remained remarkably stable compared with the late 1980s. While job insecurity is a proper subject to discuss, when one compares the facts, one sees that it may have been somewhat distorted.
    I think that I ought to send the hon. Member for Oxford, East a copy of a booklet that I have in my hand—in fact, I shall send him a copy; he deserves it after asking for a report from the Government. Perhaps I am cheating slightly, because a report has already been produced. It comes out every month, and is a remarkable little booklet called, "The U.K. at work: Key facts". I commend it to the hon. Gentleman, and I make no apology for quoting one or two facts from it. The booklet states:
    "U.K. has had the strongest recovery since 1993 of any major European economy."
    It reminds us of the effects of that—more than 600,000 have come off the unemployment register during that time. The booklet states further:
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    "Each year about 6 million jobs become vacant. On any one day there are 300,000 vacancies available."
    If hon. Members are looking at the structure of the labour market, they should let the booklet speak for itself. It states:
    "Workforce in employment has increased by 2.0 million since March 1983.
    1.3 million more self-employed than in 1979."
    If that is not a testament to the good economic policies being followed by the Government in their Budget, I do not know what is.
    Youth unemployment was mentioned. Sadly, it is 15.7 per cent.—it must be lower, and we are working hard to achieve that. However, the European Community average is 20.8 per cent., and youth unemployment in the United Kingdom is lower than in Spain, Italy, Ireland, France and Belgium. We can be duly proud of that record.
    The community action programme has been raised, and I shall pick up on that point. It has been cut back because unemployment is reducing. I refer to training for work, 1–2–1, job interview guarantee, work trial and job plan—I could go on. We have funded a whole range of policies through the Budget, and through the spending proposals of my right hon. Friend the Chief Secretary to the Treasury, which have enabled us to support people so that they can get back into work in the way that I have identified.
    The booklet "The U.K. at work: Key facts" gives the lie to anyone who attacks the Government on the subject of employment prospects. At the back of the booklet are some excellent examples of things such as inward investment and new job-creating activities throughout the length and breadth of the country. Indeed, the constituency of the right hon. Member for Sedgefield (Mr. Blair) has benefited from our being No. 1 for inward investment, which is helping to create jobs. That would not have happened if we had not had a Budget and a financial policy that attracted inward investment.
    The right hon. Member for Sedgefield is gaining 300 jobs with Black and Decker. The hon. Member for Dunfermline, East (Mr. Brown) has Lex mark International coming in, with an average investment of £31.5 million and 500 new jobs. The hon. Member for Livingston (Mr. Cook) is hiding his light under a bushel on unemployment—2,000 new jobs are coming in. I could go on. If it were not for the Government's policies, which are a report in themselves of our success in employment, I could not attest to such achievements.
    It is a remarkable situation. The hon. Member for Oxford, East chastised us in terms. Sadly, in one month unemployment went up, but—since the December 1992 peak—unemployment in total has declined by 764,900. The work force in employment rose by 68,000 in one quarter in 1995 compared with a year earlier. Manufacturing employment was up in January by 6,000 on a year earlier. The labour market does change. It has to be flexible in a modern economy, but I hope that the House will see that all that we have done has boosted job opportunities.
    On job insecurity, I shall conclude with one fact, because there is little hard evidence that jobs have become less secure, despite some people's perceptions. The 1994 labour force survey showed that almost two thirds of men aged between 30 and 49 had held their present jobs for more than five years, and that figure was little changed

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    from 10 years before. We understand the problem of unemployment and we are working hard to deal with it. The record that I have put before the House attests to that.
    7.30 pm
    Mr. Andrew Smith: It is a tragedy that the Financial Secretary and the Government did not respond with the seriousness that our proposal warranted, just as they have not tackled the unemployment and job insecurity crisis that the country faces with the seriousness that it deserves. It was clear from the Financial Secretary's speech that, if he were to produce a report on the employment consequences of the Budget, it would be a short document indeed. In fact, in his presentation, he could not get beyond the headlines and even then he barely mentioned actual job generation.
    The Financial Secretary made some European comparisons and some reference to the social chapter and the minimum wage. It is interesting that, of the 17 countries that are higher than Britain in the world prosperity league—the league in which we have fallen from 17th to 18th under the Government—all the eight European Union countries that are higher than us have signed the social chapter. Of the 17 countries above us, no fewer than 15 operate a minimum wage policy. That shows the fallacy of the Financial Secretary's arguments on those points.
    We welcome inward investment and we want to encourage it and the jobs that it brings. But why do not the Government look at the total picture on investment? Has Britain's share of total European. Union investment gone up since 1979? No, it has gone down since 1979. The share of total European investment is lower on the most recent figures than it was in 1979—so much for the Financial Secretary's claims and so much for the Government's record.
    The Conservatives have failed on unemployment and on job insecurity because they have failed on investment, training and skills and on building up the country's economic and social fabric. It is time that they made way for a Government who would bring forward the reports that we have proposed, who would act on them, and who would start to tackle the devastating crisis of unemployment and job insecurity that afflicts so many millions in this country.
    Question put, That the clause be read a Second time:—
    The House divided: Ayes 226, Noes 294.

    Division No. 89]

    [7.33 pm

    AYES

    Abbott, Ms Diane

    Bennett, Andrew F

    Adams, Mrs Irene

    Benton, Joe

    Ainsworth, Robert (Cov'try NE)

    Bermingham, Gerald

    Allen, Graham

    Berry, Roger

    Alton, David

    Betts, Clive

    Anderson, Donald (Swansea E)

    Blunkett, David

    Anderson, Ms Janet (Ros'dale)

    Boateng, Paul

    Armstrong, Hilary

    Bradley, Keith

    Austin-Walker, John

    Bray, Dr Jeremy

    Banks, Tony (Newham NW)

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

    Barnes, Harry

    Burden, Richard

    Battle, John

    Caborn, Richard

    Bayley, Hugh

    Callaghan, Jim

    Beckett, Rt Hon Margaret

    Campbell, Mrs Anne (C'bridge)

    Bell, Stuart

    Campbell, Ronnie (Blyth V)

    Benn, Rt Hon Tony

    Campbell-Savours, D N

    1096

    Canavan, Dennis

    Jackson, Glenda (H'stead)

    Cann, Jamie

    Jackson, Helen (Shef'ld, H)

    Church, Judith

    Jamieson, David

    Clapham, Michael

    Janner, Greville

    Clark, Dr David (South Shields)

    Jones, Barry (Alyn and D'side)

    Clarke, Eric (Midlothian)

    Jones, Jon Owen (Cardiff C)

    Clarke, Tom (Monklands W)

    Jones, Lynne (B'ham S O)

    Clelland, David

    Jones, Martyn (Clwyd, SW)

    Clwyd, Mrs Ann

    Jowell, Tessa

    Coffey, Ann

    Keen, Alan

    Cohen, Harry

    Khabra, Piara S

    Connarty, Michael

    Kilfoyle, Peter

    Cook, Frank (Stockton N)

    Lestor, Joan (Eccles)

    Cook, Robin (Livingston)

    Lewis, Terry

    Corbett, Robin

    Liddell, Mrs Helen

    Corston, Jean

    Litherland, Robert

    Cousins, Jim

    Livingstone, Ken

    Cummings, John

    Lloyd, Tony (Stretford)

    Cunningham, Jim (Covy SE)

    Llwyd, Elfyn

    Cunningham, Roseanna

    Loyden, Eddie

    Dalyell, Tam

    McAllion, John

    Darling, Alistair

    McAvoy, Thomas

    Davidson, Ian

    McCartney, Ian

    Davies, Bryan (Oldham C'tral)

    McCartney, Robert

    Davies, Rt Hon Denzil (Llanelli)

    Macdonald, Calum

    Davies, Ron (Caerphilly)

    McFall, John

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

    McKelvey, William

    Denham, John

    McLeish, Henry

    Dixon, Don

    McMaster, Gordon

    Dobson, Frank

    McNamara, Kevin

    Dowd, Jim

    MacShane, Denis

    Dunwoody, Mrs Gwyneth

    McWilliam, John

    Eagle, Ms Angela

    Madden, Max

    Etherington, Bill

    Mahon, Alice

    Evans, John (St Helens N)

    Marek, Dr John

    Evang, Mrs Margaret

    Marshall, David (Shettleston)

    Fatchett, Derek

    Marshall, Jim (Leicester, S)

    Field, Frank (Birkenhead)

    Martin, Michael J (Springburn)

    Flynn, Paul

    Martlew, Eric

    Foster, Rt Hon Derek

    Maxton, John

    Foulkes, George

    Meale, Alan

    Fyfe, Maria

    Michael, Alun

    Galbraith, Sam

    Michie, Bill (Sheffield Heeley)

    Gapes, Mike

    Milburn, Alan

    George, Bruce

    Mitchell, Austin (Gt Grimsby)

    Gerrard, Neil

    Moonie, Dr Lewis

    Godman, Dr Norman A

    Morgan, Rhodri

    Godsiff, Roger

    Morley, Elliot

    Golding, Mrs Llin

    Morris, Rt Hon Alfred (Wy'nshawe)

    Gordon, Mildred

    Morris, Rt Hon John (Aberavon)

    Graham, Thomas

    Mowlam, Marjorie

    Grant, Bernie (Tottenham)

    Mudie, George

    Griffiths, Nigel (Edinburgh S)

    Mullin, Chris

    Griffiths, Win (Bridgend)

    Murphy, Paul

    Gunnell, John

    Oakes, Rt Hon Gordon

    Hain, Peter

    O'Brien, Mike (N W'kshire)

    Hall, Mike

    O'Brien, William (Normanton)

    Hanson, David

    Olner, Bill

    Henderson, Doug

    Pearson, Ian

    Heppell, John

    Pickthall, Colin

    Hill, Keith (Streatham)

    Pike, Peter L

    Hinchliffe, David

    Pope, Greg

    Hodge, Margaret

    Powell, Ray (Ogmore)

    Hoey, Kate

    Prescott, Rt Hon John

    Home Robertson, John

    Primarolo, Dawn

    Hood, Jimmy

    Purchase, Ken

    Hoon, Geoffrey

    Quin, Ms Joyce

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

    Radice, Giles

    Howarth, George (Knowsley North)

    Randall, Stuart

    Howells, Dr Kim (Pontypridd)

    Raynsford, Nick

    Hoyle, Doug

    Reid, Dr John

    Hughes, Kevin (Doncaster N)

    Robertson, George (Hamilton)

    Hughes, Robert (Aberdeen N)

    Robinson, Geoffrey (Co'try NW)

    Hutton, John

    Robinson, Peter (Belfast E)

    Illsley, Eric

    Roche, Mrs Barbara

    Ingram, Adam

    Rooney, Terry

    1097

    Ross, Ernie (Dundee W)

    Tipping, Paddy

    Rowlands, Ted

    Touhig, Don

    Ruddock, Joan

    Trickett, Jon

    Salmond, Alex

    Turner, Dennis

    Sedgemore, Brian

    Vaz, Keith

    Sheerman, Barry

    Walker, Rt Hon Sir Harold

    Sheldon, Rt Hon Robert

    Walley, Joan

    Shore, Rt Hon Peter

    Wardell, Gareth (Gower)

    Short, Clare

    Wareing, Robert N

    Simpson, Alan

    Watson, Mike

    Skinner, Dennis

    Welsh, Andrew

    Smith, Andrew (Oxford E)

    Wicks, Malcolm

    Smith, Llew (Blaenau Gwent)

    Williams, Rt Hon Alan (Sw'n W)

    Soley, Clive

    Williams, Alan W. (Carmarthen)

    Spearing, Nigel

    Wilson, Brian

    Spellar, John

    Worthington, Tony

    Squire, Rachel (Dunfermline W)

    Wray, Jimmy

    Steinberg, Gerry

    Wright, Dr Tony

    Stevenson, George

    Young, David (Bolton SE)

    Stott, Roger

    Sutcliffe, Gerry

    Tellers for the Ayes:

    Taylor, Mrs Ann (Dewsbury)

    Mrs. Jane Kennedy and

    Timms, Stephen

    Mr. Malcolm Chisholm.

    NOES

    Ainsworth, Peter (East Surrey)

    Clarke, Rt Hon Kenneth (Ru'clif)

    Aitken, Rt Hon Jonathan

    Clifton-Brown, Geoffrey

    Alexander, Richard

    Coe, Sebastian

    Alison, Rt Hon Michael (Selby)

    Colvin, Michael

    Allason, Rupert (Torbay)

    Congdon, David

    Amess, David

    Conway, Derek

    Arnold, Jacques (Gravesham)

    Coombs, Anthony (Wyre For'st)

    Arnold, Sir Thomas (Hazel Grv)

    Coombs, Simon (Swindon)

    Ashby, David

    Cope, Rt Hon Sir John

    Atkins, Rt Hon Robert

    Cormack, Sir Patrick

    Atkinson, David (Bour'mouth E)

    Couchman, James

    Atkinson, Peter (Hexham)

    Cran, James

    Baker, Rt Hon Kenneth (Mole V)

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

    Baker, Nicholas (North Dorset)

    Curry, David (Skipton & Ripon)

    Baldry, Tony

    Davies, Quentin (Stamford)

    Banks, Matthew (Southport)

    Davis, David (Boothferry)

    Banks, Robert (Harrogate)

    Day, Stephen

    Bates, Michael

    Deva, Nirj Joseph

    Batiste, Spencer

    Devlin, Tim

    Beggs, Roy

    Dicks, Terry

    Bellingham, Henry

    Dorrell, Rt Hon Stephen

    Bendall, Vivian

    Douglas-Hamilton, Lord James

    Beresford, Sir Paul

    Dover, Den

    Biffen, Rt Hon John

    Duncan-Smith, Iain

    Body, Sir Richard

    Dunn, Bob

    Bonsor, Sir Nicholas

    Durant, Sir Anthony

    Boswell, Tim

    Dykes, Hugh

    Bottomley, Rt Hon Virginia

    Elletson, Harold

    Bowis, John

    Evans, David (Welwyn Hatfield)

    Boyson, Rt Hon Sir Rhodes

    Evans, Jonathan (Brecon)

    Brandreth, Gyles

    Evans, Nigel (Ribble Valley)

    Brazier, Julian

    Evans, Roger (Monmouth)

    Brooke, Rt Hon Peter

    Evennett, David

    Brown, M (Brigg & Cl'thorpes)

    Faber, David

    Browning, Mrs Angela

    Fabricant, Michael

    Bruce, Ian (South Dorset)

    Fenner, Dame Peggy

    Budgen, Nicholas

    Field, Barry (Isle of Wight)

    Burns, Simon

    Fishburn, Dudley

    Burt, Alistair

    Forman, Nigel

    Butler, Peter

    Forsyth, Rt Hon Michael (Stirling)

    Butterfill, John

    Forsythe, Clifford (S Antrim)

    Carlisle, John (Luton North)

    Forth, Eric

    Carlisle, Sir Kenneth (Lincoln)

    Fowler, Rt Hon Sir Norman

    Carrington, Matthew

    Fox, Dr Liam (Woodspring)

    Carttiss, Michael

    Fox, Rt Hon Sir Marcus (Shipley)

    Cash, William

    Freeman, Rt Hon Roger

    Channon, Rt Hon Paul

    French, Douglas

    Chapman, Sir Sydney

    Fry, Sir Peter

    Churchill, Mr

    Gale, Roger

    Clappison, James

    Gallie, Phil

    Clark, Dr Michael (Rochford)

    Gardiner, Sir George

    1098

    Garnier, Edward

    Marlow, Tony

    Gill, Christopher

    Marshall, John (Hendon S)

    Gillan, Cheryl

    Martin, David (Portsmouth S)

    Goodlad, Rt Hon Alastair

    Mawhinney, Rt Hon Dr Brian

    Goodson-Wickes, Dr Charles

    Mayhew, Rt Hon Sir Patrick

    Gorman, Mrs Teresa

    Mellor, Rt Hon David

    Gorst, Sir John

    Merchant, Piers

    Grant, Sir A (SW Cambs)

    Mills, Iain

    Greenway, Harry (Ealing N)

    Mitchell, Andrew (Gedling)

    Greenway, John (Ryedale)

    Mitchell, Sir David (NW Hants)

    Griffiths, Peter (Portsmouth, N)

    Moate, Sir Roger

    Grylls, Sir Michael

    Molyneaux, Rt Hon Sir James

    Gummer, Rt Hon John Selwyn

    Monro, Rt Hon Sir Hector

    Hague, Rt Hon William

    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

    Harris, David

    Nicholson, David (Taunton)

    Hawkins, Nick

    Norris, Steve

    Hawksley, Warren

    Onslow, Rt Hon Sir Cranley

    Hayes, Jerry

    Oppenheim, Phillip

    Heald, Oliver

    Ottaway, Richard

    Heathcoat-Amory, Rt Hon David

    Page, Richard

    Hendry, Charles

    Paice, James

    Heseltine, Rt Hon Michael

    Patnick, Sir Irvine

    Hicks, Robert

    Pawsey, James

    Higgins, Rt Hon Sir Terence

    Peacock, Mrs Elizabeth

    Hogg, Rt Hon Douglas (G'tham)

    Pickles, Eric

    Horam, John

    Porter, Barry (Wirral S)

    Hordern, Rt Hon Sir Peter

    Porter, David (Waveney)

    Howell, Rt Hon David (G'dford)

    Portillo, Rt Hon Michael

    Howell, Sir Ralph (N Norfolk)

    Powell, William (Corby)

    Hughes, Robert G (Harrow W)

    Rathbone, Tim

    Hunt, Rt Hon David (Wirral W)

    Redwood, Rt Hon John

    Hunt, Sir John (Ravensbourne)

    Renton, Rt Hon Tim

    Hunter, Andrew

    Richards, Rod

    Hurd, Rt Hon Douglas

    Riddick, Graham

    Jack, Michael

    Robathan, Andrew

    Jackson, Robert (Wantage)

    Roberts, Rt Hon Sir Wyn

    Jenkin, Bernard

    Robertson, Raymond (Ab'd'n S)

    Jessel, Toby

    Robinson, Mark (Somerton)

    Johnson Smith, Sir Geoffrey

    Roe, Mrs Marion (Broxbourne)

    Jones, Robert B (W Hertfdshr)

    Ross, William (E Londonderry)

    Kellett-Bowman, Dame Elaine

    Rowe, Andrew (Mid Kent)

    Key, Robert

    Rumbold, Rt Hon Dame Angela

    Kirkhope, Timothy

    Sackville, Tom

    Knapman, Roger

    Sainsbury, Rt Hon Sir Timothy

    Knight, Mrs Angela (Erewash)

    Scott, Rt Hon Sir Nicholas

    Knight, Rt Hon Greg (Derby N)

    Shaw, David (Dover)

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

    Shaw, Sir Giles (Pudsey)

    Kynoch, George (Kincardine)

    Shephard, Rt Hon Gillian

    Lait, Mrs Jacqui

    Shepherd, Sir Colin (Hereford)

    Lang, Rt Hon Ian

    Shepherd, Richard (Aldridge)

    Lawrence, Sir Ivan

    Shersby, Sir Michael

    Legg, Barry

    Sims, Roger

    Leigh, Edward

    Skeet, Sir Trevor

    Lennox-Boyd, Sir Mark

    Smith, Tim (Beaconsfield)

    Lester, Sir James (Broxtowe)

    Smyth, The Reverend Martin

    Lidington, David

    Soames, Nicholas

    Lilley, Rt Hon Peter

    Spicer, Sir James (W Dorset)

    Lloyd, Rt Hon Sir Peter (Fareham)

    Spicer, Sir Michael (S Worcs)

    Lord, Michael

    Spink, Dr Robert

    Luff, Peter

    Spring, Richard

    Lyell, Rt Hon Sir Nicholas

    Sproat, Iain

    MacGregor, Rt Hon John

    Squire, Robin (Hornchurch)

    MacKay, Andrew

    Stanley, Rt Hon Sir John

    Maclean, Rt Hon David

    Steen, Anthony

    McNair-Wilson, Sir Patrick

    Stephen, Michael

    Maginnis, Ken

    Stewart, Allan

    Maitland, Lady Olga

    Streeter, Gary

    Major, Rt Hon John

    Sumberg, David

    Malone, Gerald

    Sweeney, Walter

    Mans, Keith

    Sykes, John

    Marland, Paul

    Tapsell, Sir Peter

    1099

    Taylor, Ian (Esher)

    Walker, Bill (N Tayside)

    Taylor, Rt Hon John D (Strgfd)

    Waller, Gary

    Taylor, John M (Solihull)

    Ward, John

    Taylor, Sir Teddy (Southend, E)

    Wardle, Charles (Bexhill)

    Temple-Morris, Peter

    Waterson, Nigel

    Thomason, Roy

    Watts, John

    Thompson, Patrick (Norwich N)

    Wells, Bowen

    Thornton, Sir Malcolm

    Whitney, Ray

    Thumham, Peter

    Whittingdale, John

    Townend, John (Bridlington)

    Widdecombe, Ann

    Townsend, Cyril D (Bexl'yh'th)

    Wiggin, Sir Jerry

    Tracey, Richard

    Wilkinson, John

    Tredinnick, David

    Willetts, David

    Trend, Michael

    Winterton, Mrs Ann (Congleton)

    Trimble, David

    Winterton, Nicholas (Macc'f'ld)

    Trotter, Neville

    Wolfson, Mark

    Twinn, Dr Ian

    Yeo, Tim

    Vaughan, Sir Gerard

    Young, Rt Hon Sir George

    Viggers, Peter

    Waldegrave, Rt Hon William

    Tellers for the Noes:

    Walden, George

    Mr. Timothy Wood and

    Walker, A Cecil (Belfast N)

    Mr. Patrick McLoughlin.

    Question accordingly negatived.

  New clause 2

    ENVIRONMENTAL IMPACT OF TAXES AND DUTIES
    `.—In each year Mr. Chancellor of the Exchequer shall lay before Parliament not later than 30th June a report stating for the previous financial year the environmental impact of the provisions of the previous Finance Act and of the taxes and duties levied during that year.'.—[Ms Primarolo.]
    Brought up, and read the First time.
    7.45 pm
    Ms Primarolo: I beg to move, That the clause be read a Second time.
    The new clause concerns the environmental impact of the Finance Bill. We depend on the integrity of the environment for our survival and for that of generations to come. As Herman Daly of the World bank puts it:
    "There is something fundamentally wrong with treating the earth as if it were a business in liquidation".
    We are continuing to pollute our seas and rivers. The Sea Empress is the most recent tragedy to hit the headlines. The oil spill has damaged miles of coastline and smothered hundreds of birds in oil. What is less well known is that large incidents—spills of more than 100 gallons—number almost 100 a year.
    Industrial and commercial development and modern farming continue to have a profound impact on our countryside and wildlife. We accept the Brundtland commission's definition of environmentally sustainable development:
    "development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs."
    We seek initiatives that promote economic efficiency, social justice and environmental protection—all together. The Government need to ensure that we look more closely at the environmental impact of our policies, just as many progressive companies do. We must also ensure that environmental considerations are properly integrated.
    The Government now publish indicators of more and more services—from schools, to the citizens charter, to water leaks. It is right to introduce new indicators of environmental factors too. The Government's new report is welcome in that respect.
    1100
    The relationship between environmental concerns and those of social justice is not always straightforward. The environment will never be protected unless people are convinced that their livelihoods are protected as well. In many cases, environmental sustainability and a thriving economy go together. The key to the relationship between the economy and the environment is the concept of environmental productivity. Protecting the environment means increasing the economy's environmental productivity. It means using resources more efficiently and producing less pollution per unit of output. That is the key to sustainable development.
    Evidence from Germany, Japan, the United States and Sweden suggests that domestic regulation provides firms with a "first-mover" advantage in environmental industries, as finns are stimulated to innovate and create new, cleaner processes and attract greener products. We need to see improving environmental standards as an economic opportunity. The world is adopting higher environmental standards, and it is crucial that British industry is ready to lead the way.
    There are tremendous opportunities for job creation in the new environmental technologies. The environmental sector is now very large. The global market was thought to have been worth $200 billion in 1990. It is growing by more than 5 per cent. a year and will be worth $300 billion by 2000. A survey by the German Government showed that 50 per cent. of the market is currently shared by only three countries—Germany, the United States and Japan. Britain should be leading the way in environmental management techniques, but it is not.
    A recent Department of the Environment report, "Indicators of Sustainable Development for the UK", published in March this year, laid out clearly the Government's failure to respond to their objectives. Having set out report after report, they continue to fail in putting those objectives into action. Their own figures show that road traffic is likely to grow by between 58 and 92 per cent. by 2025 compared to what it was in 1994. Since 1970, car travel per head of population has nearly doubled. At the same time, travel on buses and coaches has dropped by a quarter.
    On page 34 of the report, the Government state that they have recognised that they have a role to play in influencing people's travel behaviour and the choices that they make. One way to do that is through price. Having acknowledged that pricing is important in influencing behaviour, the report says:
    "Since 1974, the real increase in bus fares has been 55 per cent. and in rail fares, 71 per cent., both higher than the 51 per cent. real increase in disposable income. Meanwhile the cost of motoring, which includes all costs like insurance, servicing and repairs, road tax as well as fuel and oil, has fallen by nearly 2 per cent. The real price of fuel and oil only—which is the perceived 'marginal' cost for an individual journey once someone owns and runs a car, and is therefore more important to decisions about individual journeys—has fallen by nearly 8 per cent … This demonstrates that the real cost of motoring, particularly the marginal cost of petrol, is very much more affordable, in relation to the real increase in personal disposable income, than it was 20 years ago."
    That is obviously true, but I would add that that demonstrates the Government's total lack of commitment to public transport. How can they possibly hope to encourage more people to use public transport in our congested cities if they make the car cheaper?

    1101
    The report also refers to energy use, and says:
    "Fuel use for road passenger transport has nearly doubled since 1970 and has increased by over 60 per cent. for freight. The volume of traffic, measured in terms of passenger-miles and freight tonne-miles has increased by about the same amount, showing that there is little change in efficiency of fuel use, in marked contrast to the industrial and commercial sectors. For passenger traffic, vehicle engines are more fuel efficient than they used to be, but the advent of unleaded petrol, catalytic converters, higher safety standards, higher specifications and performance have all tended to counter the fuel efficiency gains from improved engine design."
    There are more vehicles on the road and fewer people use public transport. The Government's report shows that clearly. Even the most minimal targets are not being met.
    The second report of the British Government panel on sustainable development was published in January 1996. Its first recommendation, in paragraph 12, says:
    "the Panel recommends that the Government should give higher priority to the definition of its environmental objectives and targets, and how it intends to meet them."
    Paragraph 13 reads:
    "The Panel … recommends that the Government enter into discussion with industry to draw up proposals in key sectors for pilot projects involving economic instruments."
    On the progress on last year's recommendations, paragraph 8 on page 8 says:
    "Commitment to setting targets has so far been patchy. The Panel believes that more should be done to define environmental objectives. It recommends that priority should be given to setting targets for agriculture and transport over the coming year."
    The most important recommendations in that report, which tie in with European recommendations, are on environmental accounting. New clause 2 attempts to start that slow and difficult process in moving towards environmental accounting.
    The Secretary of State for the Environment (Mr. John Gummer): How would the hon. Lady answer the accusation made by Friends of the Earth, that in refusing to support an increase in VAT on fuel, the Labour party had turned its back entirely on the very principle that she mentioned—increasing the cost for overuse of energy? This is not a party political point, of course.
    Ms Primarolo: Of course it is not a party political point, and I am happy to take a few minutes out of my speech to inform the Secretary of State of the correct position—
    Mr. Andrew Smith: It is VAT on fuel.
    Ms Primarolo: Yes, I know.
    The statement is linked to the belief that Friends of the Earth supported at that time the idea that VAT should be raised to prevent people from consuming too much fuel. We take the view that that creates fuel poverty, which means that the poor cannot afford to keep warm. Therefore, we need an energy efficiency programme to ensure that people are able to keep warm but consume less energy. Had the Government not cut the neighbourhood energy scheme by £30 million in this year's Budget, we would be in a better position to help families who are suffering fuel poverty.
    Mr. Gummer: Surely the hon. Lady remembers that the £30 million was to ensure that people were not energy poor
    1102
    but recompensed for the additional VAT against which her party voted—a vote that meant that the £30 million was no longer necessary. The hon. Lady has not answered the question. She is not prepared to adopt unpopular measures to defend the environment, but she will always attack the Government for adopting them and leading Europe in that regard.
    Ms Primarolo: Is the right hon. Gentleman saying that the Government still want to raise VAT on fuel to 17.5 per cent? Having imposed such a massive tax increase on the population, would the Government be prepared to restore that £30 million to the energy conservation budget?
    8 pm
    Mr. Gummer: The hon. Lady was asked how she had replied to Friends of the Earth. She told that organisation that the Labour party did not care about the environment, and could not answer the challenge issued to her.
    Ms Primarolo: It is very unusual for a Cabinet Minister to intervene so many times on such a junior Opposition spokesperson, but I am extremely grateful for the opportunity to correct a misunderstanding by the Secretary of State. I am not the one who is on the run; I am clear. Labour's commitment is to energy efficiency and energy saving—and when we deal with VAT on energy-saving materials later this evening, I expect the Secretary of State to join us in the Division Lobby.
    The right hon. Gentleman is still not prepared to answer the question that we have raised. Are not the Government still committed to raising VAT on fuel to 17.5 per cent? The British electorate may want to hear a different message, but let them be clear about this: a tax-raising Government are attacking the poor. They would not deny that.
    I would be happy to continue to discuss the merits of reducing VAT on fuel to 8 per cent.—a cut achieved by the Opposition against the Government's wishes—but I am sure that you would call me to order, Mr. Deputy Speaker. I had assumed that the Government would accept new clause 2, as they claim to be committed to the environment. According to paragraph 34.1 of their White Paper "Sustainable Development: The UK Strategy", published in 1994,
    "For development to be sustainable, environmental considerations must become a central part of the decision-making process within government and industry. For this to happen, better information is needed on the way in which economic development impacts on the environment. The ultimate goal would be the integration of environmental and economic accounting in national accounts".
    Our new clause would start that process. We understand that it is a difficult process, that definitions will be difficult to achieve and that any system that is established must be credible and accepted if it is to be a useful tool in management; but we also believe that the Government's progress in developing new forms of accounting has been slow, and of little use so far. If we leave it to the Government, they will continue to drag their feet. It is time that, having preached to industry, the Government put their own house in order and began the process of economic assessment and environmental protection.
    We had intended to press the new clause to a vote, but we have decided not to do so, in order to save time. We support amendments Nos. 25 to 31, which deal with a reduction of

    1103
    VAT on energy-saving materials. Those amendments give the House a chance to force the Government to practise what they constantly preach, and I hope that every hon. Member will support them.
    Mrs. Helen Jackson: I have little to add to what was said by my hon. Friend the Member for Bristol, South (Ms Primarolo), but I want to make some general points.
    I am sure that, before too many years have passed, the requirement in the new clause will be written into the environmental policy that Parliament expects. I understand why the new clause is not to be pressed to a vote, however: in a sense, that is appropriate. We have made our point, we have presented our arguments and we look forward to the day when our proposal is supported throughout the House.
    As we all know, if we are to make progress we must increase environmental awareness. As the Secretary of State might have pointed out, the Department publishes—in a nice green cover—an annual report of its expenditure and activities. The Department may think that that is sufficient, but it is weak on two fronts. That is why the new clause is necessary. The report does not sufficiently assess the impact of the Department's expenditure proposals, and it fails to mention the environmental impact of any other Department.
    We have heard that every Government team has its environment Minister. In Committee, we heard about the environmental responsibility of the Paymaster General, but we also heard—or surmised—that there was little communication between the "green" Ministers. Certainly, there is no requirement to include in the Department of the Environment's annual report the detailed environmental implications of the legislation and regulations that are pushed through by any other Department.
    We would start at the heart of the Government—in the Finance Bill. It is through financial measures that we affect every area of policy, and every area of policy should be aimed at improving the environment. In Committee, we discussed air pollution and the possible impact of vehicle excise duties on the quality of air in our towns and cities. The new clause would enable that impact to be reported each year: we would be able to see whether our measures relating to unleaded or super-unleaded petrol, for instance, had had the right effect.
    In Committee, we discussed some of the potential effects of the environmental tax on water. The new clause would enable us each year to look more constructively at proposals for the following year's Finance Bill. For example, we could ensure that the management of water resources, leakage and pollution were properly dealt with in the ensuing year.
    The new clause would also give us an opportunity to consider the impact of each Finance Bill on local government expenditure. We could decide whether the legislation would have a positive or a negative impact, depending on the cuts in discretionary expenditure from which local authorities suffer, which have affected litter and parks and the general environment. Because of financial constraints, many cities do not now have the pleasant environment they once had, but the new clause would enable Parliament to examine those systematically every year. I could add to the list. We could debate the Bill's impact on housing and on the work environment in terms of health and safety expenditure.
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    I hope that the new clause will command support. Parliament should look at our position in Europe and at the contribution that Europe makes to establishing high environmental standards. In that context, we should criticise neither our contributions and gains from environmental issues nor the financial requirements that they place on European Union Governments. Such topics could be debated annually in Parliament to discover whether Europe's environmental influence on EU Governments was positive or negative. Such debates would have a significant effect on our policies in Europe in the ensuing year.
    We have a chance to boost jobs and to put Britain at the head not just of the European environmental debate but of the world debate on that subject. As my hon. Friend the Member for Bristol, South said, boosting the technologies of industries that are trying to benefit the environment would result in a major boost for jobs in the years ahead. As we said in Committee, we are ahead of the field at the moment. We need to stay ahead, and the new clause would show all industries that Parliament and the Government mean business on the environment.
    8.15 pm
    Mr. Heathcoat-Amory: I agreed with the first few paragraphs of the speech made by the hon. Member for Bristol, South (Ms Primarolo) about the importance of the environment and about the need to improve environmental standards. There is no difference between the parties on that: we have shared aims in that respect. Economic growth can be fully compatible with protecting the environment, and economic failure and decline can bring their own environmental problems.
    Some environmentalists used to think that zero growth was required to protect the environment. I have visited a zero growth economy. I went to Poland under the communists and saw signs of environmental dereliction that were brought on by a stagnant economy and by command and control political methods that were clearly inappropriate to the well-being of the people and to the environmental well-being of the country.
    I believe in strong economic growth sustained in a way that protects the future of the environment, but I do not think that we need another bureaucratic and unnecessary report, or series of reports, as would be required by the new clause. The new clause overlooks the enormous quantity of information that is routinely published by the Government. I refer in particular, because it is topical, to the latest in a series of White Papers on the environment. "This Common Inheritance" was first published in 1989 and the series has continued annually since then. It sets out the Government's targets and shows progress in meeting them.
    The latest White Paper in the series was published only yesterday and, to answer the query made by the hon. Member for Sheffield, Hillsborough (Mrs. Jackson), it includes the environmental targets that have been discussed and agreed on a European basis. It fully integrates European environmental aims and achievements with our national ones. An example concerns carbon dioxide emissions, which are central to the debate about global warming. The White Paper makes it clear that we are now expected comfortably to meet the aim to which we signed up of returning carbon dioxide emissions to below the 1990 level by 2000.

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    Of course the achievement of that target is affected by taxation, especially by fuel duties, but it is not affected only by taxation. There is a range of regulatory, expenditure and taxation mechanisms to achieve environmental targets. The hon. Member for Bristol, South seemed to suggest that motor taxation was too low, but she stopped short of telling us exactly what her party thinks the true rate should be.
    Ms Primarolo: The Prime Minister referred to the targets that have been set by the Government for reducing greenhouse gas emissions by 2010. Why did the Government panel on sustainable development say in January that, to meet the targets, the Government would have to use all appropriate means to achieve greater energy efficiency and energy saving by domestic users, industry and transport? Will he confirm that he will support amendments Nos. 25 to 31 as the beginning of that process?
    Mr. Heathcoat-Amory: We shall debate that subject when we get to it. The point that I made, and which the hon. Lady does not dispute, is that we have signed up to a target reduction of CO2 emissions by 2000, and it is clear that we shall achieve it. We use a range of mechanisms to do that, and they include vehicle taxation.
    The hon. Lady evidently believes that vehicles are undertaxed. I had half hoped that, in her intervention, she would state Labour's thinking on the subject rather more clearly. The intervention by my right hon. Friend the Secretary of State for the Environment drew from the hon. Lady the fact that she altogether failed to support a move effectively to increase the price of fuel and power—a move that would have helped to achieve these targets. For purely opportunistic party reasons, she and her party did not support the Government and environmental groups such as Friends of the Earth when we urged putting VAT at the standard rate on fuel and power, which is done in practically every other country with a VAT system. No one can take either Labour or Liberal Democratic environmental policies seriously because those parties drew back from supporting an environmental measure simply for opportunistic reasons.
    The hon. Member for Bristol, South spoke about fuel poverty, but she overlooked the fact that, even with the addition of VAT, gas and electricity prices to consumers are now lower than they were two years ago. I have not even mentioned the impact of schemes such as the home energy efficiency scheme, which deliberately caters for those who live in houses that are or have been inadequately energy-efficient.
    The report for which the hon. Lady is calling is not only unnecessary and bureaucratic, but conflicts with a superior method to improve the environment—the setting of targets and the use of a range of measures, not only those in the Budget, to achieve them. We in the Conservative party believe that economic instruments have an important part to play. That is why the switch from leaded to unleaded petrol was, in part, achieved by creating a duty differential. We have also established the landfill tax to reduce the quantity of waste going to landfill. That environmental achievement is gained from an economic instrument.
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    We are also committed to increasing fuel duties by, on average, 5 per cent. a year in real terms. We have also reduced the duty on liquified petroleum gas and compressed natural gas. We are also increasing the duty on super unleaded petrol in case increased usage of that fuel were to increase the emissions of benzene and other harmful aromatic compounds. We do not shrink from using economic mechanisms as part of the overall picture. They were all carefully laid out in the White Paper, and are reported on at the time of the Budget.
    The hon. Lady may have overlooked the fact that, at the time of the Budget, we drew together the measures used to reduce vehicle emissions. They specify the increases and, in some cases, decreases in fuel taxes that were introduced to achieve our environmental aims.
    Possibly the best example I can give of where we drew on published information to put forward a specific environmental policy was the preparation of the landfill tax. Officials and Ministers drew on a study by Coopers and Lybrand, commissioned by the Department of the Environment, to design and legislate for the structure of that tax. Officials also drew on the report by Professor David Pearce on externalities of landfill and incineration. All that information is publicly available. We do not need another report to bring before the House and the public information that is already freely available.
    The conclusion that I must reach at the end of this short debate is that the Opposition are, characteristically, more interested in reports than in delivering on published targets. I end with the simple assertion that, whereas the Opposition talk about the environment, we deliver on it.
    Ms Primarolo: We intend to deliver on the environment later this evening and to defeat the Government. I beg to ask leave to withdraw the motion.
    Motion and clause, by leave, withdrawn.

  New clause 9

    DOMICILE FOR TAX PURPOSES OF OVERSEAS ELECTORS
    '.—(1) In determining—

    (a) for the purposes of inheritance tax, income tax or capital gains tax where a person is domiciled at any time on or after 6th April 1996, or

    (b) for the purposes of section 267(1)(a) of the Inheritance Tax Act 1984 (deemed UK domicile for three years after ceasing to be so domiciled) where a person was domiciled at any time on or after 6th April 1993,
    there shall be disregarded any relevant action taken by that person (whether before, on or after that date) in connection with electoral rights.

    (2) Relevant action is taken by a person in connection with electoral rights where—

    (a) he does anything with a view to, or in connection with, being registered as an overseas elector; or

    (b) when registered as an overseas elector, he votes in any election at which he is entitled to vote by virtue of being so registered.

    (3) For the purposes of this section, a person is registered as an overseas elector if he is—

    (a) registered in any register mentioned in section 12(1) of the Representation of the People Act 1983 (right to be registered of persons entitled to vote at parliamentary elections) on account of any entitlement to vote

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    conferred on him by section 1 of the Representation of the People Act 1985 (extension of parliamentary franchise to certain non-resident British citizens); or

    (b) registered under section 3 of that Act of 1985 (certain non-resident peers entitled to vote at European Parliamentary elections).

    (4) Nothing in subsection (1) above prevents regard being had, in determining the domicile of a person at any time, to any relevant action taken by him in connection with electoral rights if—

    (a) his domicile at that time falls to be determined for the purpose of ascertaining his or any other person's liability to any of the taxes mentioned in subsection (1)(a) above; and

    (b) the person whose liability is being ascertained wishes regard to be had to that action;
    and a person's domicile determined in accordance with any such wishes shall be taken to have been so determined for the purpose only of ascertaining the liability in question.'.—[Mr. David Hunt.]

    Brought up, and read the First time.
    Mr. David Hunt: I beg to move, That the clause be read a Second time.
    I should like to thank my hon. Friend the Financial Secretary for taking such an interest in this matter and for helping to ensure that the new clause is technically workable.
    The history of this matter is that legislation on overseas electors has always had all-party support. I believe that all parties have run up against a difficulty, however, because there is some uncertainty about whether registering to vote and then voting might have an effect on an individual's tax position. A person's domicile is relevant in establishing certain tax liabilities—for example, inheritance tax in the case of non-residence. I feel strongly that there must be no unnecessary disincentives to people exercising their democratic right wherever in the world they may live. There should also be no uncertainty about any possible financial consequences of registering to vote and then voting.
    My new clause would, of course, apply to all voters. I believe that it is non-partisan and I hope that the Government and the Opposition will accept it. The United States has a comparable rule. When a United States citizen who lives abroad registers to vote in federal elections, it is clearly stated in the law of the United States that that in no way affects that individual's residence or domicile status for federal, state or local tax purposes.
    Finally, I am encouraged in my belief that the new clause will be accepted by the Government and the Opposition by the news that, last month, the Opposition launched their campaign to win overseas voter registration. I pay tribute to the fact that there are a number of individuals in the Labour party who have gone out to win over support abroad. I understand that the Opposition's launch mentioned that Los Angeles is one of their most active centres. Well, good luck to them. Perhaps it is appropriate that the film star world should be in the lead in what we believe to be a rather cosmetic new Labour party.
    The initiative was launched by the deputy leader of the Labour party and one of its foreign affairs spokesmen under the title, "Wish you were here". The main centres of Labour activity will be Spain, Australia, Hong Kong, Brussels, Rome, New York and Washington DC. I therefore hope that my new clause will gain support from the Opposition and the
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    Government. It is important that everyone considering whether he should vote and whether he should register to be entitled to vote should not be subject to any uncertainty. People should certainly not fear that that democratic act might have a detrimental effect on their tax liabilities.
    Mr. Mike O'Brien: Whereas the American colonies in 1774 cried, "No taxation without representation," it seems that certain rich Tory overseas voters are now demanding representation without taxation.
    I hate to say it, but new clause 9, proposed by the right hon. Member for Wirral, West (Mr. Hunt), who is held in some respect in the House, has all the hallmarks of a cynical amendment motivated by the self-interest of the Tory party. It seeks to reduce the evidential weight attached to registering to vote in determining whether a person is domiciled in this country.
    Does citizenship not carry with it any responsibilities for Tories any more? Does patriotism and duty to others mean nothing? Is the right hon. Gentleman saying that seeking to vote—to influence the future of the country—and being represented in Parliament does not carry with it any duty to that country and its other citizens? No one says that people must pay taxes to vote, nor do we want unnecessary barriers to voting, but the rich should not get special tax privileges to encourage them to vote.
    With opportunities to vote come responsibilities of caring about one's country and fellow citizens. Accepting that registration to vote shows a commitment to one's country. It can be evidence of domicile. In each case, that evidence will have a different weight, depending on the other circumstances of the individual, but it is right that registration should have some weight and show some degree of commitment to one's country.
    Seeking representation in Parliament, although seeking to avoid making a proper contribution to taxation, is not the way in which to show patriotism. Let people who vote accept our laws. Let them not seek the special privileges that the new clause would confer. With the benefit of the vote comes the burden of citizenship. With the right to a voice in Parliament comes a responsibility of commitment to one's fellow citizens.
    Some of the people who would benefit from the new clause are extremely wealthy tax exiles. Some of them may be Tories, perhaps even making contributions to the Tory party. I know that the Tories have been desperately trying to fill their coffers with overseas donations. Now it seems that some seek to give people who seek to evade their responsibilities on tax the right to do so and still vote. Registration to vote should be evidence of domicile and possible liability to tax.
    8.30 pm
    Cynical as, in many ways, the new clause is, I doubt whether the Tory party will benefit all that it imagines from it. Many voters of all sorts, including those overseas, are now turning to new Labour, so I suspect that, in terms of votes, the right hon. Gentleman may be hoist with his own petard.
    Let no one say that we tried to stop people from voting. We will not force a Division, although others may decide to, but nor can we, in all conscience,

    1109
    support this change in the law. There is a certain tackiness in the new clause that ill befits the right hon. Member for Wirral, West, who, as I said, has had a high reputation in the House. I regret that he has proposed it. I suspect that he did so out of party loyalty, which has its place. I therefore cast no slight on the respected right hon. Gentleman, but I hope that he will withdraw the new clause. If the Minister decides to support it, the people will judge the Government's criteria for law-making. They will know the Government's standards. That is why they will vote against them at the next general election.
    Mr. Jack: I am tempted to ask, "Has the hon. Member for North Warwickshire (Mr. O'Brien) finished?" because that was the most amazing outburst on a modest proposal made by my right hon. Friend the Member for Wirral, West (Mr. Hunt), whose face shows the reaction that must be abroad in the House.
    The hon. Member for North Warwickshire told us, first, that the Opposition will not vote against the new clause, so I suppose that that will be an abstention against democracy, as they have put it. He then asked my right hon. Friend to withdraw the new clause. It sounds like the Opposition want a good each-way bet.
    I suspect that my right hon. Friend starts from the same position as me in this. When I came into my job as Financial Secretary, I received letters from people asking what their position was. We in the Treasury have done our best to write to people who want to exercise their democratic rights, conferred on them by the House, but, clearly, letters of advice showing that, effectively, registering to vote would not corrupt their tax position in relation to domicile was not enough for them.
    Therefore, my right hon. Friend is right to introduce the new clause. He has put the matter beyond doubt, because domicile is not a tax concept, but one of general law that is used for many other purposes—for example, the validity of a marriage and the effect of a marriage on property rights and legitimacy.
    Broadly, a person is domiciled in the country where they have their permanent home. Those are the types of test that, effectively, influence matters when tax considerations must be considered. The new clause says simply that registering to vote does not change anything in relation to domicile. I hope that, by reading out that brief paragraph, I have put on record some of the factors that must be taken into account in adjudging, as I said, the context of general law.
    I was delighted that my right hon. Friend referred to an extract, which I presume was from a newspaper, showing that hon. Members on both sides of the House are attempting to woo our respective supporters if they are outside the United Kingdom. There may be doubts in the minds of some of the supporters of the hon. Member for North Warwickshire on this matter. Given his testimony to democracy, it would have been a sensible and simple move to put this matter beyond doubt in the clear and unequivocal terms that my right hon. Friend proposed.
    Which way people vote, wherever in the world they exercise that vote, is a matter for influence in the normal course of electioneering. The new clause has been tabled on a non-partisan basis to enable all people who wish to
    1110
    exercise the democratic rights conferred on them by the House to do so without doubt in relation domicile and tax. I commend my right hon. Friend's new clause to the House.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

  New clause 14

    EXPENDITURE ON IN-TOWN COMMERCIAL PREMISES
    `The following section shall be inserted after section 70 of the Capital Allowances Act 1990—
    "70A (1) If person carrying on a trade incurs expenditure on the construction of or alterations or refurbishment to a qualifying building occupied by him for the purposes of that trade then, if an allowance or deduction in respect of the expenditure could not, apart from this section, be made in taxing the trade or computing the profits or gains from it, this part shall apply as if the expenditure were capital expenditure incurred on the provision of machinery or plant for the purposes of the trade, and as if the machinery or plant had, in consequence of his incurring the expenditure, belonged to him, and as if the disposal value of the machinery or plant were nil.
    (2) If a person has incurred expenditure on the construction of or alterations or refurbishment to a qualifying building let by him otherwise than in the course of a trade then, if an allowance or deduction in respect of the expenditure could not, apart from this section, be made in taxing the letting or computing the profits or gains from it, this part shall apply as if the expenditure were capital expenditure incurred in providing machinery or plant first let by that person, otherwise than in the course of a trade, at the time when the expenditure was incurred and as if the property comprised in the lease of the qualifying building had as from that time included the machinery or plant, and as if the disposal value of the machinery or plant were nil.
    (3) In this section 'qualifying building' means any building or structure in a retail enterprise zone.
    (4) In this section, 'retail enterprise zone' means an area designed as such by an order made by the Secretary of State under power in that behalf conferred by Schedule 32 to the Local Government, Planning and Land Act 1980 or, in Northern Ireland, by an order made by the Department of the Environment for Northern Ireland under Article 7 of Enterprise Zones (Northern Ireland) Order 1981.
    (5) The writing down allowances within section 24 which are made to a person by reason of this section are not to exceed £50,000 in aggregate for a chargeable period.
    (6) This section applies to expenditure incurred on or after 28th November 1995.".'.[Mr. Pearson.]
    Brought up, and read the First time.
    Mr. Ian Pearson: I beg to move, That the clause be read a Second time.
    The aim of new clause 14 is to give help to high streets, which have suffered as a result of out-of-town retail development. In the past 15 years, there has been a major growth in out-of-town shopping centres. The Metro centre in Gateshead, Meadowhall near Sheffield and the Merry Hill centre in my constituency are just three well-known examples. Although those developments have undoubtedly proved popular, they have created major problems for town and local centres, in some cases threatening their future survival as shoppers go elsewhere, retailers move out, premises are boarded up and prone to violent vandalism and high streets go into a spiral of decline.
    Belatedly, the Government have recognised the damage that their lax attitude to planning matters has done to our high streets. In July 1993, they produced planning policy

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    guidance 6 and, in July 1995, even tougher guidance in draft form, which is yet to be implemented, but which clearly states that future proposals must take into consideration the vitality and viability of town and local centres. Turning off the tap now, however, will not stop the flow of the many developments in the pipeline or do anything to right the wrongs and to repair the damage that the Government's policies have heaped on many high streets already.
    It is perhaps stating the obvious to say that building the second biggest retail complex in Europe less than three miles from Dudley and Stourbridge town centres and right next to Brierley Hill was bound to affect local trade. The Merry Hill impact study conducted for the Department of the Environment provides hard evidence of that. It shows graphically the 70 per cent. decline in comparison goods shopping in Dudley town centre and a 43 per cent. decline in Stourbridge.
    We cannot turn back the clock. Nor would I want to with 1.8 million sq ft of retail space and two and a half miles of malls attracting 23 million visitors a year. Merry Hill is a major success story. It has created significant transport problems, clogging up roads for major parts of the day, creating pollution, annoying local residents and having dramatic consequences for long-established town centres.
    I do not want to talk down Dudley or Stourbridge town centres. In the past five years, retailers and business people who are trying to make a living there have suffered enough, but I acknowledge that, recently, there have been some improvements as the market has adjusted to new patterns of shopping. Warm words from the Government and a stricter use of planning controls are simply not good enough.
    The Daily Telegraph, commenting on the new draft guidance, said that it
    "leaves the Environment Secretary in the uncomfortable and somewhat ridiculous position of ordering back the tide of Britain's modern car-borne shoppers."
    We should not be trying to do that. We have to live in the now. What we can do is support town centres and the people in them who are trying to develop new visions and strategies for their future. There have been some exciting recent developments in the science of town centre management and in action in partnership to revitalise and regenerate towns and local centres. The new clause would boost that process of developing new strategies and plans so that towns and local centres could offer a vibrant future. The new clause would give writing-down allowances on costs of construction, alteration or refurbishment of premises in a retail enterprise zone. It is not designed to be massively expensive. It gives the Secretary of State the power to control the number and size of retail enterprise zones. There are limits of £50,000 in any one chargeable accounting period for which business men can claim writing-down allowances.
    The new clause would go some way to repairing some of the damage that has been done to Dudley town centre and other similarly affected centres. It would not solve all the problems, but it would make significant improvements, and I would welcome the Government's favourable response to it.
    The Chief Secretary to the Treasury (Mr. William Waldegrave): The debate initiated by the hon. Member for Dudley, West (Mr. Pearson) has become something of an annual event, which always produces an interesting speech and a response from the Government which sympathises with a great deal of what he says. He will understand if I do not refer in detail to Merry Hill because I understand that a planning application has been submitted to extend that great site, and obviously I must not say anything that might be taken wrongly and prejudice the decision. The experience that the Member for Dudley, West has had in Dudley is obviously interesting and important.
    I want to offer one or two new arguments to show why I do not think that the hon. Gentleman's approach, with which in principle the Government are sympathetic, is right. We are sympathetic because he is trying to use market forces, by offering incentives to get things moving, rather than the dirigisme of planning. In some senses, that fits in very well with Conservative philosophy. However, one or two points lead us—I am sure that it does not surprise the hon. Gentleman—to reject his new clause.
    I also come from an inner-city constituency, where there have been some extremely controversial planning applications over the past two or three years. As a constituency Member of Parliament, I have campaigned against some applications for big retail centres within the city, but on green space within it, which had widespread opposition from my constituents and others on the grounds of loss of green space and also because they would divert shopping from existing shopping areas and streets in the city of Bristol. There has also been rapid development outside Bristol in the north fringe of some classical out-of-town centers—not as big as those in Dudley but of the kind with which the hon. Gentleman is probably familiar.
    If we had designated areas of the city to try to counteract the pull of the north fringe, we might have found ourselves facing the paradoxical outcome of encouraging some of those very big inner-city developments, which—it would have been argued—would not have been very satisfactory. We might still have ended up with a new conflict and encouraged big inner-city shopping developments, which, arguably, would also have damaged the more traditional high streets in the city.
    That seems to show that, although the hon. Gentleman's motivation is very sensible, such an approach is rather a blunt instrument, and that, with all its faults—such an argument is probably more often heard on his side of the House than mine—the finer grain and more exact targeting through the proper use of the planning system is a better way in which to deal with the problem.
    8.45 pm
    Mr. Andrew Smith: I am following the right hon. Gentleman's speech, as I am sure are all hon. Members, with some interest. The argument of my hon. Friend the Member for Dudley, West (Mr. Pearson) is that in some respects at least there is not a genuinely level playing field, in fiscal terms, between new out-of-town, or indeed new inner-town, developments, such as the Chief Secretary has described, and more conventional and traditional developments, especially in inner-city

    1113
    shopping areas. If the right hon. Gentleman does not accept my hon. Friend's argument as a means of addressing that situation, does he at least accept that there is a case for examining with great care the fiscal effects of the present legislation on new and green-field development in comparison to its effects on more conventional city centres to see whether there are not ways in which to give incentives to, particularly, the smaller shopkeepers in more traditional centres, as my hon. Friend is trying to do?
    Mr. Waldegrave: The point made by the hon. Member for Dudley, West is valid. There is certainly a perception that a new green-field site has a range of advantages over the redevelopment of an existing site. In Bristol, if I may refer to it again—the hon. Member for Dudley, West spoke of Dudley—we have the great Broadmead centre, which was built after bombing in the war and which is not very satisfactory in many respects. It is a classic late 1950s or 1960s development. There has been much good investment in it over recent years by Ladbrokes and others and some major steps have been taken, but it was probably more expensive than, as the hon. Members for Oxford, East (Mr. Smith) and for Dudley, West are arguing, it would have been on a wholly green-field site. None the less, the advantages do not seem fiscal. They derive not from any oddity in the tax regime, but from an inherent greater ease of developing on green-field sites, except for possible strains on the road system.
    Therefore, a better way to right the balance is through direct control of the planning system. Although I understand the argument of the hon. Members for Dudley, West and for Oxford, East, with which we experimented in the early 1980s through enterprise zones, and which is still one weapon in the armoury, such a weapon has turned out to be a fairly blunt instrument, which creates curious boundary problems and a deadweight problem. It finances developments that might have happened anyway. Although I am glad to hear that the centre of Dudley is coming back to life, to some extent under its own steam as the hon. Member for Dudley, West was arguing, one ends up helping to finance developments that would have happened anyway.
    We have mechanisms to address the point made by the hon. Member for Dudley, West that have been established and used on a bipartisan basis or by other parties separately over many years through the Town and Country Planning Acts, and the hon. Gentleman was generous enough to say that in recent years we have been steering the system that way. The turnaround was begun by the present governor of Hong Kong, and was carried through by his two successors as Secretary of State for the Environment. I am told that the current draft is quite restrictive. The balance is difficult to maintain because cities are dynamic. I know that many of the shops that are threatened—allegedly—by new developments in Bristol are where they are today only because they had to be moved out of the centre of Bristol because of the bombing in the war. They were not there before the war.
    Things cannot be set in aspic. The traditional British urban centre is usually around a railhead, which was a result of ruthless free-enterprise competition 150 years ago. The only question is whether touching the tiller,
    1114
    which is legitimate for Governments to do, is better done through the fiscal system or the planning system. We argue for the planning system. As usual, the hon. Member for Dudley, West has stimulated an interesting debate and chivvied us along a little in remembering that the balance must be got right.
    Mr. Pearson: I thank the Minister for his careful and considered reply, and for his acknowledgement that I am making a real point. His preference for the direct control mechanism of the planning system is all very fine for future developments, but it does nothing to redress the problems caused to my constituents and their businesses in the Dudley borough.
    I must also point out that Merry Hill—uniquely, I think—is not a green-field out-of-town development but a brown-field development in an enterprise zone, which was not subject to any planning approvals whatever. Under that regime, there were 100 per cent. industrial building allowances and a 10-year rate-free period, so it is clear that the tax system offered significant incentives.
    Mr. Waldegrave: I must not prolong the debate simply because it is interesting; that would get us into trouble with the usual channels. The hon. Gentleman is pointing to one of the inherent problems of the enterprise zone—the boundary problem. We may find that we have simply moved things from one place to another, and the argument revolves around righting the fiscal balance again. We could extend the zone, but then the inherent problems that we have been trying to solve might spread somewhere else. That was probably the right move to deal with the acute problem of Merry Hill, but every time we spread the boundary, perhaps we undermine the principle of the enterprise zone.
    Mr. Pearson: I understand. We could have an interesting debate about boundary problems and creating special local economic initiatives by using the tax system. Arguably, those problems could equally apply to a whole range of other economic development initiatives such as single regeneration budgets, city challenge, and the old task force areas. I do not want to pursue that line, other than to repeat that I think that there is a special case for justice for Dudley, because it is the only area in which something of that size—Merry Hill is the second biggest retail complex in Europe—was built in an enterprise zone. As a result, it had massive tax advantages, and that persuaded virtually all the major retailers to move into it, not only for the capital benefits but for the revenue benefits of the rate-free period.
    The example of the borough of Dudley makes a clear case for justice for our town centres. In view of the Government's reluctance to support my new clause, I shall seek other avenues by which to pursue that case, and I beg to ask leave to withdraw the motion.
    Motion and clause, by leave, withdrawn.

  Clause 4

    RATES OF DUTY AND REBATE
    Mr. Roger Gale: I beg to move amendment No. 24, in page 2, line 22, leave out '£0.2817' and insert `£0.10'.

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    I begin by congratulating the Government on the fact that the provision already in the Bill proposes a 15 per cent. cut in excise duty on gas used as a road fuel. That is an important, indeed a vital, step—a step towards sustainability and towards protecting the health of adults and children in all our towns and cities.
    It is accepted that vehicles using gas fuel pollute much less than their petrol and diesel counterparts. To someone standing on any traffic-filled high street, the case for gas-fuelled vehicles is self-evident. If one stays there long enough, one does not need to read recent Government reports to know that vehicle emissions are far too high.
    In local and national newspapers, the subject of air quality is now discussed. As an asthma sufferer myself, I have a heightened awareness of the effects of polluted air. Regrettably, local government activities sometimes make that worse. I happen to favour traffic calming measures, but the fact remains that, as we introduce them, especially road humps, we cause petrol and diesel vehicles to pollute more.
    The extra acceleration and deceleration caused by traffic calming substantially increases vehicle emissions into our city streets. That is all the more serious because vehicle emissions rise geometrically rather than arithmetically, so the increases in pollution are sixfold, eightfold or even tenfold. More gas vehicles will undo such damage, and help to stop one form of protection for our children—slower speeds—exacerbating another—emission pollution.
    Recently, my hon. Friend the Minister for Transport in London announced the publication of a report by the energy technology support unit highlighting the benefits of gas as a road fuel. Furthermore, gas is transported by pipeline, thus avoiding the need to use road-based oil tankers, so it offers additional quality-of-life benefits. Those of us who travel on Kent's roads recognise only too clearly the need to reduce the heavy traffic that uses them, including the rural roads, as rat runs.
    I wholeheartedly endorse the existing clause that compensates for the extra costs of delivering compressed natural gas to vehicles. The 15 per cent. cut will allow gas fuel to be sold at the same price as petrol and diesel, and that sends the right fiscal message to the marketplace. Unfortunately, the signal is neither strong enough nor clear enough, which is a great shame, because it is the right signal. If we are to develop a large and growing gas fleet, with all its attendant air quality benefits, clearly we need to do more. We need not only to equalise the fuel costs but to allow for the additional costs of gas vehicles themselves.
    Whether they are new or converted, gas vehicles are currently more expensive. That is not inevitable. In time, once the industry has begun mass production, gas vehicles need be no more expensive than existing petrol or diesel vehicles. But for the moment, and probably for some time to come, they are bound to cost more, because they lack the economy of scale of their rivals.
    The Government's existing provision already accepts the benefits of gas fuel, but I suggest that, without greater incentives, especially for fleet operators, the environmental benefits of compressed natural gas usage will not be delivered. My amendment addresses that problem. It would create a differential of 16p a litre between petrol and diesel, on the one hand, and gas on the other.
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    My amendment would also lower the duty rate to the European Union minimum. Our current duty on natural gas is 340 per cent. of that minimum, while our duty on diesel is only 160 per cent., and on petrol only 140 per cent. We have a tremendous opportunity to give the market an unequivocal message by reducing our gas duty to the minimum permitted under EU rules.
    The figure that I have selected is not random, for another reason. It has been carefully selected, because it would give gas vehicles life-cycle costs similar to those of petrol and diesel vehicles.
    It is believed that the natural gas vehicle industry is ready to take off. Its specific early targets are buses, taxis and mid-range trucks—for example, the refuse trucks found in every town and city. These are all largely urban vehicles, and are obvious polluters in the eyes of the public. Research that I have seen suggests that all that is holding fleet managers back is the significant price differential. By making gas fuel substantially cheaper than petrol and diesel, we can compensate them for the extra capital costs of the vehicles and allow the industry to take off. That is what the amendment will do.
    I should emphasise to my right hon. Friend the Paymaster General that I see the enhanced reduction as a temporary measure, lasting only until the economies of scale to which I have referred take effect. Once the industry achieves 20 per cent. of the share in any market, the economies of scale will begin to take hold, and unit costs will fall. The markets will then move to become more environmentally friendly, and the need for such a large differential—I accept that I am suggesting a large differential—will disappear.
    In year one, the revenue impact of what I am suggesting would be minimal, as the actual number of vehicles that could conceivably take advantage of any cut this year is 5,000 at the very most. The potential net cash loss to the Treasury would therefore be relatively small—about £7 million at most. Clearly, the extra reduction could cost more in the longer term.
    Were 200,000 vehicles to convert to natural gas, the Treasury would lose about £200 million a year, but even this would be more than offset by the estimated environmental and social benefits of reduced pollution. It is estimated that 200,000 gas vehicles could save about £240 million a year, and recent reports laying greater emphasis on the health problems caused by particulates suggest that even that may be an underestimate.
    The precedent and example for a lower rate for environmentally better fuels lies with our treatment of unleaded petrol. We all know that the first—minor—cut in the rate led to a small increase in the number of people using the fuel, and it required a second larger cut before the policy affected public behaviour. My amendment avoids a repetition of that mistake with gas as a road fuel.
    The Government have shown in the Bill that they are committed to their approach to the subject. My amendment offers the added benefit of sending a clear and unequivocal signal to the market. The current clause is highly desirable, but I do not believe that it will be sufficient to convert expressions of interest into firm orders. My amendment will be to the benefit of all who live in, work in and visit all our towns and cities. I look forward to hearing my right hon. Friend's reply, and I hope that he will treat my proposal sympathetically.
    9 pm
    Mr. David Jamieson: In rising to support the amendment tabled by the hon. Member for Thanet, North (Mr. Gale), I should first declare an interest. I have given advice to the Natural Gas Vehicle Association, but have no financial contract with it.
    The amendment—which essentially proposes to use a fiscal measure to promote the use of compressed gas vehicles—gives the Government the opportunity to do three things: first, to create a cleaner environment, particularly in terms of air quality; secondly, to develop new technology at which we could be at the leading edge; thirdly, to greatly assist our balance of payments. I shall address a few comments to each of those matters.
    First, the environmental case for moving from diesel and petrol motor vehicles to compressed natural gas is overwhelming. The emissions from natural gas vehicles are substantially lower in almost every category than from diesel and petrol vehicles. Evidence shows that diesel in particular is giving out particulates that are carcinogenic, and much of the evidence from America shows that cancers are developing early in young people as a result of their breathing in diesel fumes. In particular, slow-moving vehicles such as buses, taxis, refuse collection vehicles and other vehicles seen in our city centres give out high levels of pollution. The environmental case is so strong that there is no need to say any more on it.
    Secondly, this country has for many years been at the leading edge of vehicle production—in particular, car production. We should be developing the new technology in this country, but it is instead being developed in other parts of Europe, Japan, America and Canada. We could be losing out by not providing new technology that could be sold right across the world if we could grasp our home market and develop it as we should.
    I have named some countries, but Argentina and Italy, for example, are also ahead of us in this area. Italy has a third of a million gas vehicles on its roads, while we have only a few hundred. The industry needs the critical mass of filling stations to give it a kick start, and that can only be done by the fiscal measures proposed in the amendment.
    Finally, we could substantially help our balance of payments by not importing the oil that presently fuels our vehicles. Some 60 per cent. of oil for our vehicles is imported from other countries—mainly the middle east. Natural gas would come almost in its entirety from the gasfields around the United Kingdom.
    A topical argument is that oil comes to this country across the sea in tankers and is then taken in tankers along our roads, which is, as recent experience in south Wales has shown, an environmental hazard and a hazard to safety and life on our roads; whereas gas is delivered through pipes, which is much safer.
    Clearly, there is cross-party support on such an important matter. The amendment is an opportunity for the Government to reduce the excise duty, which would encourage the use of much cleaner fuels in vehicles on our roads.
    Mr. Robert Atkins: I apologise to you, Mr. Deputy Speaker, to the House and to my hon. Friend the Member for North Thanet (Mr. Gale) for missing the start of my hon. Friend's brief remarks on the amendment,
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    particularly since I added my name to the list of those supporting the amendment. I will speak but briefly, knowing largely what my hon. Friend and the hon. Member for Plymouth, Devonport (Mr. Jamieson) have said.
    When I was Minister of State for the Environment Countryside, the hon. Member for Devonport and I slid) ed a platform, and we talked about this very issue. I pleased to do so, because it is an important issue.
    The hon. Gentleman is wrong on one point, however: the technology is being developed in my constituency at the Leyland technical center—the former Leyland Trucks site, where a lot of work is being done in the field and on designing buses and trucks which, as my hon. Friend the Member for North Thanet rightly said, are being used in other parts of the world. We already have a lead that we can build on and on which Britain can score a few runs, from both the environmental and industrial points of view.
    I am therefore delighted to be associated with the amendment. Allowing for the fact that it has revenue implications that might not be wholly acceptable to my right hon. Friend the Paymaster General, I ask him to realise the strength of feeling that is beginning to build up among—to put it politely—three hon. Members who would consider themselves involved in the issue and who I would hope the House would realise have a genuine and abiding interest. I hope that he will be sympathetic in his response tonight and in the way in which he treats this matter, which has ramifications for health, the environment and pollution control, and would also allow us to make a product that we can sell to the world.
    Mr. Alan Simpson rose—
    Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Does the hon. Member for Nottingham, South (Mr. Simpson) want to speak on this amendment?
    Mr. Simpson: No, Sir.
    Mr. Heathcoat-Amory: The case for the use of natural gas, or liquefied petroleum gas, has been well made during this short debate. I listened with care to the remarks of my right hon. Friend the Member for South Ribble (Mr. Atkins), my hon. Friend the Member for North Thanet (Mr. Gale) and the hon. Member for Plymouth, Devonport (Mr. Jamieson) in support of the amendment. I detect that it is chiefly a probing amendment, but that it nevertheless has a serious intent.
    The Government well understand the advantage that natural gas and LPG can have, particularly in reducing urban pollution. The use of such fuel reduces most of the main pollutants—one cannot escape the production of carbon dioxide, but, for example, sulphur emissions are considerably lower than when such vehicles burn diesel.
    In recognition of those advantages, the duty on road fuel gas was frozen in the November 1994 Budget. It was made clear at the time that further research was necessary, and that further consideration would be given to a possible cut. That was indeed done in the 1995 Budget, when my right hon. and learned Friend the Chancellor of the Exchequer, after examining the environmental and other cases, concluded that a 15 per cent. reduction was appropriate. That was designed approximately to equalise the running costs of vehicles using gas with those using diesel or petrol. Now there is no disincentive to the use

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    of road fuel gases, and it is up to consumers and the market to decide whether to convert or purchase vehicles using those fuels.
    As my right hon. Friend the Member for South Ribble said, some vehicles are already using the fuel. There is at least an embryo industry using them.
    My hon. Friend the Member for Thanet, North urged a dramatic cut in duty because of the problems of conversion. A reduction in the cost of the fuel would tend to encourage high-mileage users rather than the lower-mileage urban use that all hon. Members who spoke thought to be the more achievable use for such vehicles. It may therefore be better to examine whether the cost of conversion could be encouraged through more capital-directed assistance, possibly through changes to vehicle excise duty. I at least offer him the prospect of that being considered.
    We intend to consider carefully using VED as a means to encourage low-emission vehicles. If there was evidence to support that, it could be possible to use it as the incentive to undertake conversion work. That might be a better targeted measure than a simple further cut in the cost of the fuel. I cannot prejudge the outcome of the studies, and I do not wish to give my hon. Friend too certain a steer, but I can undertake that it will be closely considered.
    As to future research, the energy technology support unit is about to produce a report on alternative fuels right across the board. In addition, it has a programme of research into gases and other fuels that will be published next year. I hope that I have said enough to show those interested in the subject that I am at least sympathetic to their points. I can offer no immediate relief but I understand the point about the cost conversion, in addition to the help that we have already given by cutting by 15 per cent. the taxes in the current Budget.
    Mr. Gale: I am grateful to my right hon. Friend, especially for recognising in his closing remarks the burden of the additional cost of conversion. I am also grateful to my right hon. Friend the Member for South Ribble (Mr. Atkins) and to the hon. Member for Plymouth, Devonport (Mr. Jamieson) for their support.
    This issue is not going to go away, but, equally, I know that my right hon. Friend has not come to write out the cheque for the relatively modest sum that we ask to stimulate the industry. I am also conscious that the House wants to move on to an important debate. I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.

  Clause 28

    REFUNDS IN CONNECTION WITH CONSTRUCTION AND CONVERSION
    Mr. Simpson: I beg to move amendment No. 25, in page 17, line 21, at end add
    `provided that any refund made pursuant to paragraph (b) of subsection (1D) below may, unless the Treasury decides otherwise, only be a refund of a least nine and one half per cent. on the VAT chargeable'.
    Mr. Deputy Speaker: With this, it will be convenient to discuss also the following amendments: No. 26, in page 17, line 24, after 'they', insert `(a)'.
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    No. 27, in page 17, line 26, leave out `(a)' and insert `(i)'.
    No. 28, in page 17, line 27, leave out `(b)' and insert `(ii).
    No. 29, in page 17, line 29, leave out `(c)' and insert(iii)
    No. 30, in page 17, line 31, at end insert 'or
    (b) involve the conversion of a dwelling by the installation into or on the dwelling of energy saving materials as defined under subsection (1F) below.'.
    No. 31, in page 17, line 35, at end insert—
    '(1F) For the purposes of subsection (1D)(b) above energy saving materials shall be such materials or products as are by Order designated by the Secretary of State and the materials or products so designated

    (a) shall include all such materials or products which in his opinion are used solely for the purpose of improving the energy efficiency of buildings; and

    (b) may include any material or product of which in his opinion, the primary purpose is the improvement in the energy efficiency of buildings.

    (1G) The Secretary of State

    (a) shall within one year of the passing of this Act make the Order referred to in subsection (IF) above; and

    (b) may make further Orders designating other materials or products if in his opinion it is expedient to do so; and
    any such Orders shall be subject to approval by resolution of the Commons House of Parliament.'.

    Mr. Simpson: I am sorry if I misled the House a few moments ago with my enthusiasm to get on to this debate. This is not a probing amendment, but a genuine one. It aims to address an important energy conservation issue that I have attempted to raise in the House before.
    The amendment is not the channel through which those of us who tabled it would have preferred to go. We were compelled to go through it to get an amendment on the Order Paper which was not ultra vires. During our proceedings, I have discovered that the other options—to propose a reduction in VAT or VAT relief—were not open to me as a Back Bencher to move.
    I reflected on the fact that, although the Chancellor of the Exchequer and I are neighbours, there are important differences between us. He is Chancellor and I am a Back Bencher. I also understand that, in troubled times such as these, he often has cause to envy the security of my position. Although his occupation of the Chancellorship may be temporary, he has the opportunity to introduce proposals relating to VAT reduction and relief. Those opportunities were not available to those who have tabled these amendments. However, the issues and the principles at stake are the same. The principle underpinning the amendments is that it is quite wrong in tax law to pursue a policy of taxing energy conservation more heavily than energy consumption.
    9.15 pm
    I am not the first—and I suppose that I shall not be the last—to make that point. I always try to give credit where it is due, so I pay particular tribute to a former Chancellor of the Exchequer, the right hon. Member for Kingston upon Thames (Mr. Lamont). In his Budget speech on 16 March 1993, he said:
    "For the first time, the rate of VAT on domestic fuel and power will be the same as that charged on goods like loft insulation material, which improve energy efficiency. This will bring to an end

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    the current anomaly, which makes nonsense of any attempt to use the tax system to improve the environment".—[Official Report, 16 March 1993; Vol. 221, c. 183.]
    In its infinite wisdom, the House decided to retain VAT on domestic fuel bills at 8 per cent., but it did not then address the anomaly to which the Chancellor had drawn our attention. So that anomaly—the "nonsense" to which the former Chancellor referred—remains. This group of amendments seeks to remove that anomaly and to restore a level tax field to environmental policies.
    As the Treasury would not do that via VAT reduction or relief, we were forced to explore the possibility of VAT rebates. I am grateful to the present Chancellor of the Exchequer for introducing the administrative framework of a rebate system into the Finance Bill. The amendments slot quite comfortably into that system. It is not simply the administrative system that matters: I shall remind the House of the extent of public support for that sort of proposal.
    I should not be coy, but attribute praise to all those who deserve it. In a way, they are not my amendments, as they were formulated on the basis of wide, cross-party support. In a matter of days, 201 right hon. and hon. Members put their names to the group of amendments. Over a slightly longer period last year, 343 right hon. and hon Members put their names to an early-day motion that said substantially the same thing. A majority of hon. Members have backed the principle that we should tax energy conservation no more heavily than energy consumption.
    I pay particular tribute to the hon. Member for Exeter (Sir J. Hannam) and for Truro (Mr. Taylor) who have worked to ensure that the amendments before the House are of an all-party nature. It is also important to pay tribute to the 350 local authorities around the country that have given their support to the proposal. The Confederation of British Industry energy policy committee, the Builders Merchants Federation, local chambers of commerce, pensioners' rights organisations and Friends of the Earth support the measure. A national survey commissioned by the Association for the Conservation of Energy found that Conservative councillors around the country support the proposal by a ratio of six to one. That is the scale of public support for the measure around the country on a cross-party basis.
    I have attended a number of public meetings up and down the country, and I have not met anyone who opposes the proposal. However, there is one exception: Her Majesty's Treasury. The Treasury has advanced four reasons why it objects to the amendments.
    First, it says that they are too bureaucratic. I shall answer that charge in three parts. The amendments would not create any new bureaucracy, as they would slot into the rebate scheme as set out in clause 28 of the Bill. It is not cumbersome in relation to generating an unsupportable level of demand on a civil service, because the terms of the amendment are targeted to the trade.
    Clause 28(1C) makes it clear that the measure is aimed at contractors, and it makes it administratively simple for that to take place. If the Government's objection is that it is not wide-ranging enough, it would be open to them to come up with a proposal that widened the basis of that uptake—they could introduce it on the basis of an across-the-counter refund system. New clause 19 gives an
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    indication of how the Government might do this, if that were their preferred path. It is not beyond the wit of the House to extend it in simple, non-bureaucratic ways if that is what the Treasury wants to do.
    The second objection is the problem of definition. How will people define what is or what is not an energy-saving material? The Treasury has said that it is not competent to define that list. The truth is that we would not be asking the Treasury to define that list; it is written into the amendment that we would be asking the Secretary of State for the Environment to draw up that list over the next year.
    The list would be divided into two groups: products that are solely for the purpose of energy saving, and products that are primarily for the purpose of energy saving. The Secretary of State would come to the House with that list, and he would have a year to draw it up. The Government would have a year in which they would be free to come back with a better method of delivering that reduction in VAT. I am sure that that would be ample time and would be welcomed.
    The third objection I have heard is precedent—that, if we were to go down this path, a whole series of good causes would come and say, "You have done it for one, so you ought to do it for us." They are not the conditions within which the amendment is being moved. We have an unprecedented position, in which energy saving is actually tax penalised. We are not asking for tax favouring; we are asking for the removal of a tax penalty that favours the wasteful use of energy rather than the safe and responsible use of energy—we are creating a level playing field, not tax favouring.
    The fourth objection that I have heard is that, if we go down this path, we will upset Europe—the objection is probably couched around it being in breach of the sixth VAT directive. I know that there are other countries in Europe—Belgium and Greece, in particular—that already use different rates of VAT to tax-favour energy conservation. If it is sauce for Belgium, it is sauce for Britain. That is not a sense in which we would be in breach—the practices are already being carried out elsewhere in Europe.
    Secondly, I have managed to get a letter from one of the European Commissioners that says that, in relation to the sixth VAT directive,
    "Certain Member States do tax the construction, renovation or alteration of social housing at the reduced rate. In such cases it may be that the contract to construct, renovate or alter the house in question might include the incorporation of energy saving materials".
    We are told that that is a possibility open to us. The Commissioner pointed out that it would not be an option on an individual basis, which reinforces the argument about targeting it on the trade.
    My final comment in relation to this uncertainty about European rules and directives is this: what if we were challenged? If the European Commission told the House that its actions were VAT-illegal, surely that would be precisely the sort of ground on which Her Majesty's Government would want to challenge a European ruling. If European rules and directives prevent a country from tax-favouring energy conservation rather than the wasting of energy, surely that is the absurdity.
    In the words of the right hon. Member for Kingston upon Thames, the former Chancellor of the Exchequer, that is "the nonsense" that the House has a

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    responsibility to tackle. If the nonsense resides at European level, it should be challenged there rather than consented to by the House. We hear much about subsidiarity, but if subsidiarity does not mean that a country has the ability to fend for its fuel-poor, it means nothing at all. The issue is as stark as that.
    Against the detractors, I wish to focus on the positive points in the core of amendment No. 25, which represents a virtuous circle with four-way winners. One group of winners would be those who live in cold homes. The industry estimates that there would be a 10 per cent. increase in demand for home insulation products if we supported the amendment. It would be a real boost to the mileage of moneys left in the home energy insulation budget, which, as the House will remember, was cut by 30 per cent. despite assurances to the contrary, and it would target that greater mileage specifically on those who are suffering greatest hardship from fuel poverty.
    The second beneficiary would be the environment. It has been estimated that the amendment would save 200,000 tonnes of carbon dioxide, 290 tonnes of nitrous oxide and 530 tonnes of sulphur dioxide by the year 2000.
    The third group of beneficiaries would be the unemployed. Industry has estimated that the increase in demand, simply from passing the amendment, would be the equivalent of 10,000 job-years in jobs created and jobs sustained. Finally, the industry itself would benefit. The industry is desperate for the 10 per cent. increase in demand that it estimates would come from the amendment.
    The House should hear some of the comments that I have received from sections of the industry. The chief executive of Owens Corning Building Products has said:
    "Market demand is very disappointing with no sign of improvement".
    More or less the same comment was made by Sheffield Insulations and Schlegel (UK) Engineering Ltd. The director of British Gypsum has said:
    "Builders report that the past six months have been extremely difficult. We expect worse to come".
    Pilkington Glass Ltd. has said:
    "The first six months of the year were very flat and we forecast a decline from here on".
    Dow Construction Products has said:
    "Business is flat or even declining. The future looks bleak".
    Similar comments have come from Vencel Resil Ltd. and the directors of Honeywell Control Systems Ltd. Those are some of the major home insulation contractors working in Britain and they back the amendment. They have urged us to support it tonight.
    The one question with which the Treasury should concern itself is the cost. The estimate for the worst case scenario for costs is £10 million. In Treasury terms, that is no more than a cup of tea between the Chancellor and the Governor of the Bank of England. The figure assumes that there would be no increase in revenue to the Treasury from the increase in demand for products in the home insulation industry. It assumes that no savings would accrue from the retention and development of jobs in the industry. The best case scenario suggests that the Chancellor would come out financially better off from the process. Even the worst case basis shows a minute price to pay for making serious inroads into the 50,000 avoidable deaths
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    of people in the United Kingdom every winter through fuel poverty. That is the real bottom line of the costs borne by this country.
    The reason why the Treasury does not support amendment No. 25, and why it has not come up with any amendments that would achieve the same end, is very simple. The Treasury does not want this because it does not want it. It will not come up with a simpler proposal because it does not want one—but the public do.
    Mr. Christopher Gill: Has the hon. Gentleman been able to assess how much it would cost the Treasury to administer this scheme? Will he not concede that it will be quite complicated, and that it would be much simpler if we could vote in a straightforward way to reduce the rate of VAT?
    Mr. Simpson: I said at the outset that there are simpler ways, but I am not the Chancellor of the Exchequer, so I am not in a position to introduce them. I do know, however, that the Treasury has massively exaggerated the administrative costs involved in this process. The necessary bureaucracy is being set up by the Chancellor in clause 28 of this very Bill. The new processes would simply slot into that, and the bureaucratic costs would be minimal.
    Outside this place, there is massive support for the measure. Inside this House, I believe that there is massive support for the amendments too. I also know that the country will not understand if tonight we turn our backs on the simple principle that energy conservation should not be taxed more heavily than energy consumption. If we turn our backs on that idea, we shall be neither understood nor forgiven for spurning this opportunity. That is why I urge all hon. Members to support the amendments, to restore an equitable system in which sanity and environmental responsibility become the cornerstones of our tax policy.
    9.30 pm
    Sir Teddy Taylor: The hon. Member for Nottingham, South (Mr. Simpson) rather spoiled his case by asking us to follow the examples of Greece and Belgium, which are both in a financial shambles, but every responsible person is aware that energy saving is important. We levy a tax of 8 per cent. on fuel, and it would seem only common sense to say that there should be no VAT at all on energy saving. The tragedy is—Opposition Members well know this because of their obsession with Europe—that under European rules, our Parliament is not permitted to abolish VAT on energy saving. As the Liberal Democrats will appreciate, even if every Member of this House, including the Prime Minister and the Leader of the Opposition, voted to abolish VAT on energy saving, we would not be allowed to.
    The hon. Member for Nottingham, South is proposing something very clever—not because he is particularly clever, but because he has noticed that, in clause 28, the Government have discovered a clever way round the problem. Instead of reducing the rate of VAT, it can be done by means of refunds.
    The amendment is worth supporting if for no other reason than to find out whether that is possible. I therefore hope that every Member of this House who cares about

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    democracy, about the elderly and about preserving fuel will agree that it is worth finding out whether such a system will work.
    Some people, especially the Euro-enthusiasts in the Government, claim that the sixth directive already permits what we want. But I have studied it and it is far from clear. It states that the Government could reduce—not abolish—VAT in the case of housing built as part of a social policy, referring to
    "renovation and alteration of housing provided as part of a social policy."
    My hon. Friends and I would certainly like to take advantage of that if it would reduce VAT, but I very much doubt, for instance, whether my house was built as part of a social policy. But there is still just a possibility that it might work, so let us try—that is, if we care about saving energy.
    I hope that the excellent Paymaster General is a sensible Minister who will let us know shortly whether he has today telephoned the European Commission to ask, "Look lads, are we allowed to do this? Could we reduce the rate of VAT to 8 per cent.?" If by any chance he has not done so—I know he is a busy man—I hope that Liberal Democrats, Labour Members and Conservative Members will form a popular front—a united British Parliament—and will tell the European Commission, once we have agreed the amendment, that we want permission to reduce VAT on energy saving to 8 per cent. Would not all the parties fighting for the restoration of just a little democracy be a fine picture?
    We could do it, so let us try. Why should we bother trying? Because even Government Whips would accept that it is ridiculous to have a higher rate of tax on energy saving than on energy. We should encourage, not discourage, people to save energy. One has to be very careful in supporting unusual amendments, particularly when testing ourselves against the all-powerful European Commission.
    Would the change involve massive bureaucracy? I was talking to a Minister the other day, who said, "If you pass this, it will mean that everyone who goes to a do-it-yourself store will be able to ask for a refund on the VAT. It will involve hundreds of civil servants and lots of paper, and we don't want to waste paper, just as we don't want to waste fuel." Happily, I am able to reassure my hon. Friends, because I have checked up on the amendment, which the hon. Member for Nottingham, South, with the help of the Government, has constructed so carefully. It relates to new subsection (1C), which applies only to jobs done by contractors. Even if the Government wanted to try to stretch this to cover DIY stores, they cannot. The amendment is absolutely clear and precise, so we do not need to worry about bureaucracy. If there is any bureaucracy, it is in clause 28.
    The second thing that worried me—I am sure that it would worry all Conservatives—is that we should not do anything to undermine or upset the Government's brilliant economic strategy. We know that we are so fortunate to have such a splendid Chancellor of the Exchequer and such a fine Government, and when they have added up the figures carefully and put on the taxes, one is always terrified that one might upset them, but the amendment is brilliant, because we do not have to do this tomorrow. In fact, all we have to do is say to the Treasury, "We don't want you to cut
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    the taxes now. All we are saying is, please go away for a year and think carefully about what should be exempt." That means that we do not need to do anything until the next Budget—in fact, the Budget after next.
    I am absolutely confident that the Conservatives will get an even greater majority at the next election, but who knows, there might be—if people are silly—a change of Government, in which case this would have to be done by a Labour Government, or even a Liberal Democrat Government, supported, perhaps, by the Scottish nationalists. It would be they who would have to go to the European Commission to say, "Please, sir, can we do this?" I hope that if there were such a Labour Government, which I would deplore, of course, they would have the support of the Conservatives in the all-popular front.
    But then again, it might not cost anything. I know that, because of the need to try to save money, which the Government are so good at—apart from in their dealings with the EC—we have had to reduce slightly the very expensive and nice little scheme to help to install energy-saving features in people's houses. Whereas we used to help pensioners, we now help only pensioners who are on income support. That means that hard-working pensioners, such as my mother, who worked so hard to save money, are not eligible. That is very sad.
    I do not want to bring personalities into it—otherwise, I should have to declare an interest in the Register of Members' Interests—but pensioners who cannot get income support are cut out. That means that contractors will not be able to work on those pensioners' houses, and will have to ask, "Which of you has an income support book?" If we were able to do this, it would help jobs, and that might save money. There might be an increase in demand, which would also provide jobs and so on. The Government might even find, because they are so clever in these things, that they would make money, not lose it. If there is a prospect of making money, it should appeal to the Conservative party.
    Thirdly, one thing that we must not do is upset the Conservative party. It is terribly important, whether we support something or not, that on no account must we upset the Conservative party. That is one of the rules that we should all obey. Unlike myself, my hon. Friends work so hard that they sometimes do not have time to keep in touch with everybody. I have found out—I hope that my hon. Friends are aware of this—that we have done a survey of all the Conservative councillors. I draw the attention of the House to that most wonderful Conservative council which has more Conservative councillors than any other—Westminster. All the members of that brilliant Conservative council replied that they were in favour. That is the view not only of the vast majority of Conservative councillors, but of Westminster councillors. We should certainly take that into account.
    We should support the amendment. What will be lost if the Government accept it? First, I believe that people will be glad that we are moving away from the nonsense created by the EC, whereby we must charge more for energy saving than for energy. So many aspects of EC policy are mad; let us try to sort one of them out. Secondly, acceptance would unite us; we could all go together to the EC and say, "We want to change this. Please have the courage to let us do it."

    1127
    We have very good Commissioners. We have one who is represented by the Conservative party, and one represented by Labour. The trouble with the EC is that it sometimes does illegal things that it is not entitled to do, such as banning exports of cattle all over the world. It does those things for funny reasons: in that instance, it is taking action not because it wants its action to work, but to deprive us of our subsidies.
    The Commission is all-powerful, and I therefore hope that we can unite on a popular front. Let us help jobs; let us help pensioners who are not on income support; let us help democracy; and let us help to introduce a bit of common sense in the EC. I understand that more than 70 Conservative Members—they do not include me, of course—have put down their names in support of the proposal. Conservatives' word is their bond: I signed the pledge against alcohol when I was six years old, and, like all Conservatives, I have kept my promise. I know that Conservatives keep their promises, and I hope that they will support the amendment. It will be good for Britain, good for pensioners, good for jobs, good for the Government and, I believe, good for the whole nation.
    Mrs. Margaret Ewing: As a sponsor of the amendment, I congratulate my hon. Friend the Member for Nottingham, South (Mr. Simpson) on tabling it.
    The hon. Member for Southend, East (Sir T. Taylor), who spoke at length, said that the amendment contained flaws. He and I, and other members of the all-party parliamentary warm homes group, trawled through the Bill to try to find other ways of addressing the issues of energy conservation and fuel poverty, and this is the best method that we could come up with. Although it is not perfect, at least it is a step in the right direction, and, if accepted, it would send the country the message that we are trying to deal with such matters in Parliament.
    Let me touch briefly on two principles. First, there is the question of the health and safety of the most vulnerable members of society. I thought it despicable that the Budget massively cut the home energy efficiency scheme, given the impact that that will have on the poorest members of society, who are often living in the worst housing. The safety aspect relates to the health issue that has already been mentioned. Many people are now taken into hospital during the winter, which costs the national health service a vast amount. If those people could heat their homes to a reasonable extent, that would not happen. I do not think that the Treasury has considered the saving that could be made.
    Before the Budget, we made a substantial submission. We said that we did not want money simply to be thrown at the problem; the Treasury could benefit from some of the positive ideas that had emerged from the all-party group and, indeed, from many voluntary and statutory organisations throughout the United Kingdom. The Treasury should bang a few heads together, get its civil servants to do their sums and realise that our proposals will benefit not only the health of the most vulnerable in society, but—perhaps—the Treasury.
    The second aspect is energy conservation and employment creation. When the Government introduced the concept of VAT on domestic fuel, they said that it was part and parcel of the Rio agreement. That seemed to paint a bright picture for the Government, but in reality they were looking for money and not adhering to the agreement at all.
    1128
    Hon. Members who care about the environment should vote with us on the amendment because it is about the green issue of energy conservation and employment creation. From whichever part of the House he comes, no hon. Member should sit on his hands—he should join us in the Lobby. Employment creation is important and there are many opportunities to renovate the housing stock, which would take people out of unemployment and social security benefits and enable them to earn money and pay taxes.
    9.45 pm
    I listened to the speech by the hon. Member for Southend, East (Sir T. Taylor). We all talk about the rights of an elective democracy. We are sent here to represent people, and the amendment would remove some power from the Executive, not just in Brussels, but in Whitehall, and would give members of every party in the House the right to say, "We will take the decisions affecting vulnerable sections of society." This is not just an argument about Europe: it is about the Executive and the rights of elected representatives. I hope that hon. Members will support the amendment.
    Sir John Hannam: The hon. Member for Nottingham, South (Mr. Simpson) made a powerful speech in promoting the amendment. I shall be brief, because the case in principle for removal of the VAT anomaly in energy conservation matters is irrefutable. Obviously, the problem is to try to find a method of achieving that objective, whereby customers would pay the same 8 per cent. rate on energy-saving materials as on the fuels that they consumed.
    As the hon. Member for Nottingham, South said, new clause 10 was reasonably clear cut, in that it would have established relief from VAT for a designated list of energy-saving products. However, the new clause was ruled to be outside the resolution of the Bill, so instead we are debating a group of amendments that would enable refunds to be claimed by contractors carrying out energy conservation installations.
    Over the years, like other hon. Members no doubt, I have engaged in many debates with Treasury officials and Ministers in an endeavour to obtain VAT refunds for charities and charitable operations. I am fully aware of the strong reservations of Customs and Excise and Treasury officials about giving VAT relief for specified products and services. I am sure that, as usual, Treasury Ministers will produce solid evidence against refund proposals, as well as showing them to be counter-productive.
    Even if the refund system is not the answer to the VAT anomaly, I implore the Minister to recognise our case for a more positive approach to energy saving. It cannot be right that people have to pay more tax to save fuel than to use it. That is not how our tax system should operate. Many of my hon. Friends have shown their support for that principle by signing early-day motion 383.
    If new clause 10 had been the subject of this debate, I have no doubt that it would have been supported by a substantial number of my hon. Friends. The refund amendments do not command the same enthusiasm. If the Minister has alternative proposals for the restoration of confidence in our energy-saving programme, which

    1129
    took a sudden battering in November from the 31 per cent. reduction in the home energy efficiency scheme, we shall be happy to go along with the Government.
    Like many other hon. Members, in November, I took part in the home energy efficiency scheme week. I was mortified when, on the very day I was assisting an elderly couple with draught-proofing in their home, the news broke of the 31 per cent. cut in that scheme. Unfortunately, it was broken to me by the local press. That reduction in financial support will result in 200,000 fewer grants; with a national waiting list of 210,000 households, that was not good news.
    A refund of VAT on energy-saving material costs would represent only modest help to the home energy efficiency scheme, so I would prefer to see a restoration of the lost funding in the next Budget. I hope that my right hon. Friend the Paymaster General will be able to reassure my hon. Friends and me that the Government are determined to strengthen our energy conservation policies and that they will look at the issue again if they are unable to accept the amendment. My right hon. Friend's reply to the debate will be crucial in determining my attitude in any Division that may be called later, and I am sure that that applies to other hon. Friends as well.
    Mr. Matthew Taylor: The answer to the hon. Member for Exeter (Sir J. Hannam) is that there is one simple alternative to the amendment before us: the Government could accept the original measure promoted by so many hon. Members. If the Minister so wished, he could choose to do that. It is clear that, sadly, the Government are not prepared to do so. Just one conclusion can be drawn by all those who signed the early-day motion, including many Conservative Members. If they believe in what they said they believed in by signing that early-day motion, they will vote in favour of the amendment.
    If the Government pursue their current line, the Paymaster General will put his own colleagues in an extremely difficult position. He is asking them to choose between standing by what they said they believed in publicly by signing the early-day motion, and supporting their party. I understand that difficulty, but if the Government pursue that line, they will be defeated tonight. I certainly hope so, because that would be the only creditable position for the House to adopt, given the widespread support for the early-day motion.
    The amendment deserves support, quite apart from the fundamental principle involved. It offers good news for the industry, which has been hit by the cuts in the home energy efficiency scheme grants, which were so unexpectedly announced in November, as the hon. Member for Exeter said. It would be good news for jobs and for the environment. It would also be good news for those currently living in damp, cold homes that they cannot afford to heat properly. Those arguments have been put very well already, and I do not intend to dwell on them.
    It is nonsense for the House to be in the current position of supporting a regime whereby those who seek to save energy are penalised by the tax system, whereas those who use it wastefully are supported by it. That cannot be maintained. The Finance Bill already contains a refund system for certain building works, and all the amendment seeks to do is to add an extra category of goods for refund.
    1130
    Although hon. Members would prefer a different system from that advocated in the amendment, that system works and the necessary bureaucracy has already been created. That is not at issue here. That system would offer the benefits to which I referred and, above all, it reflects the concern that so many hon. Members have already expressed by supporting the early-day motion. If they are honourable men and women, they will support the amendment.
    Mr. Tim Yeo: I do not intend to reiterate the points that have already been made in the debate, most of which I agree with, but I have a couple of pleas to make to my right hon. Friend before he answers the debate. If he is unable to accept the amendment—and it will not be a great surprise to me if he is unable to do so, because I am sure he could find plenty of good technical arguments objecting to it—I hope that he will say something about his view of the principles involved. Both inside and outside the House, there is overwhelming support for what the amendment is designed to achieve: to produce the same VAT rate for energy use and energy saving.
    Energy efficiency is one of those rare subjects where economic, environmental and job creation aims coincide. In that respect, it is a happy and unusual subject. That makes the principle that the amendment would establish genuinely difficult to fault. If in answering the debate my right hon. Friend deals only with deficiencies in the amendment and does not deal with the principles, the issue is bound to return. I hope, therefore, that, if he does not accept the amendment, for whatever reason, he will at least assure the House that the issue will be examined with a view to finding, between now and the next Budget, a satisfactory method of achieving the principle and the amendment's aim.
    Reducing the VAT rate on energy-saving materials to the same rate as on fuel can be achieved in a variety of ways. I would be happy if my right hon. Friend said that he will perhaps introduce measures in the Budget, provided that—I recognise that the Treasury may be concerned about administrative costs and the cost of the concession—in the next eight months, he can be satisfied in relation to the total cost of the concession and the bureaucratic difficulties that some people suggest may arise. If he told the House that, subject to that, he would accept the principle, that would be a huge step forward.
    My right hon. Friend's task has not been made easier by the change to the funding of the home energy efficiency scheme. My hon. Friend the Member for Exeter (Sir J. Hannam) referred to the change, which was announced just before Christmas. If there are to be alternative solutions, many hon. Members would be happy for that reduction in funding to be restored. That would be another way of dealing with the issue and of demonstrating the Government's commitment.
    There are other ways of doing that. If the Government were able to give energy efficiency a higher profile—for example, if they could emphasise the importance of publishing energy ratings for every property, especially at the time when a property or tenancy changes hands—that would be a step in the right direction. Energy efficiency remains an unglamorous subject. If people understood it more clearly, they would find that the benefits that can be achieved from energy efficiency and energy saving are so great that they would have every motivation to take the necessary steps in relation to their property.

    1131
    I should like to make one final suggestion to my right hon. Friend. If he offered even a temporary cut in VAT, for a year or two, that would be helpful. It would provide an incentive, boost the building industry at a time when jobs are still needed and give a higher profile to the subject. My right hon. Friend was once responsible for energy efficiency issues. I know of his interest in the subject and I look forward to his response, when I hope that he will demonstrate his commitment to the principle.
    Ms Primarolo: I congratulate my hon. Friend the Member for Nottingham, South (Mr. Simpson) on his creativity in drafting these complex amendments, which aim, by way of a refund, to reduce the VAT rate on energy-saving materials to 8 per cent., putting it in line with that on fuel. He acknowledged, as other hon. Members have, that there are some drafting problems in that the Budget resolution is drawn so tightly that it is the only way in which the House can express its view on a proposal to reduce the VAT on energy-saving materials.
    As the hon. Member for Ludlow (Mr. Gill) rightly pointed out, there are easier, less complex ways to achieve the same objective, but that is prevented by way of the Budget resolution. The House is left with this rather complicated method of expressing a view.
    The hon. Member for Southend, East (Sir T. Taylor) called for the formation of a popular front—one-nation Members of Parliament acting in unison to defend those who, through their poverty, are cast out by the Government by the prevention of reasonably priced energy-efficient materials.
    Instead of giving us bureaucratic and technical excuses, the Government should be agreeing to take the proposals forward in the 12-month period provided by the amendments, and should come back next year with clear proposals on how the will of the House can be enacted. We disagree with the Government. We do not believe that the proposals would be ruled out by the sixth directive, but we are prepared—as the hon. Member for Southend, East rightly challenged us to be—to put it to the test.
    We shall support the amendments, not because they are the best way in which to achieve our ends but because they are the only way that is offered to us. The Minister must explain whether he is against the principle that VAT on energy-saving materials should be the same as VAT on fuel, or whether he is telling us that Brussels prevents us from making them the same. If Brussels is preventing us, he should clearly explain why. We believe that he has no reasons to offer and we shall vote against the Government.
    I want to make it clear that, despite the fact that the director of Friends of the Earth on "Today" this morning seemed to know by telepathy what the Front-Bench team of Her Majesty's Opposition were going to do, he was wrong. We shall be voting against the Government, we intended to vote against the Government, and I ask all hon. Members in the name of justice, jobs, democracy and energy efficiency to vote with us.
    10 pm
    Mr. Heathcoat-Amory: It is clear from this debate and other debates that the House is strongly committed to the cause of energy efficiency. No one who heard the hon. Member for Nottingham, South (Mr. Simpson) can doubt his commitment to that aim, which is shared by me
    1132
    personally and by the Government as a whole. We give considerable help, practical advice and grant assistance to improve the way in which the country uses energy. We can all unite behind the amendment's motive, even if we disagree on the mechanism.
    The hon. Member for Nottingham, South pointed out that he—as well as perhaps other hon. Members—has previously raised the issue of cutting the rate of VAT for energy-efficient material. I must make the point, however, that that request must take its place alongside many others that I receive for favourable and reduced rates of VAT on a range of other goods and services. Many right and hon. Members who are present have written to me—often on behalf of constituents—urging lower rates of VAT for hotel and tourist accommodation, for example. There has been a strong campaign for that recently. Requests have also been made about repairs to buildings, particularly historical buildings and churches. People have also asked for lower rates on sanitary products for women—that is strongly urged on the Government from time to time—and for more favourable VAT treatment for the disabled and for charities in general. All those cases—
    Mr. Simpson: I am sorry to interrupt the Minister's winding-up speech, but does he understand that what I was asking for was no more than what was requested by a former Chancellor of the Exchequer—a level playing field, so that we do not tax energy saving more heavily than energy consuming?
    Mr. Heathcoat-Amory: Yes, but other people urging other cuts use precisely the same argument. For instance, we apply VAT at the full 17.5 per cent. to repairs to listed buildings, whereas alterations to listed buildings are zero-rated. So people writing to me make the same point: why not have a level system, with zero rating applying to both?
    I promise the hon. Gentleman that he is not unique in drawing our attention to perceived anomalies in the VAT system. As a Minister, I have inherited a system containing within it anomalies that doubtless we would like to correct in various ways—but to choose between the well-argued and plausible cases put to us would be highly invidious.
    The other examples that I gave are all well argued and heartfelt, yet to concede on all of them would seriously erode the VAT tax base, and would mean that taxes had to go up elsewhere. I also urge another reason on the House. Our long-standing policy is to favour a simple VAT system with a single positive rate operating with our zero rates.
    The single exception to that, as the hon. Member for Nottingham, South pointed out, is VAT on fuel and power. We originally wished that rate to increase to the standard rate. Indeed, all other countries with VAT systems have a standard rate for fuel and power. But here, Parliament decided that the rate should stay at 8 per cent., so 8 per cent. is where it will remain. In administrative terms, that is not a serious erosion of the principle of simplicity, because fuel and power are easy to define and there are comparatively few suppliers, so it creates no undue complexity either for taxpayers or for Customs and Excise.
    However, I contrast that starkly with the case before us. Building materials are in an entirely different category. We are dealing with an enormous range and quantity of

    1133
    products, some of which are, and some of which are claimed to be, energy-efficient. To draw up a definitive list of energy-saving materials and services that would receive favourable tax treatment would be extremely difficult.
    Some products and services are used solely to improve energy efficiency, but there are many others whose energy-efficient qualities are secondary to their main purpose, or even incidental. For example, gas-fired condensing boilers are more expensive than ordinary boilers, but also markedly more fuel-efficient.
    I am sure that the purpose of the amendments is to encourage the installation of such boilers by giving them favourable VAT treatment. But it is not clear that the primary purpose of such a boiler, or of any boiler, is energy-efficiency. The primary purpose of a condensing boiler is to produce hot water. It would not fall within the definition drawn up by the supporters of the amendment.
    A more general objection that applies to any scheme to reduce VAT for this diverse range of products is that someone would have to decide when a boiler was sufficiently energy-efficient to qualify for the reduced rate of VAT. Who would decide? Who would draw up the list? When would a new switch on a boiler sufficiently improve its energy efficiency to qualify for the tax privilege?
    Mr. Nicholas Winterton: I am listening to my right hon. Friend's explanation, but will he stop reading from the brief prepared by either Customs and Excise or the Inland Revenue and give a guarantee to Conservative Members that he will look seriously at ways of exempting energy efficiency from the higher rate of VAT? If he fails to do so, he will fail to get the full support of Conservative Members.
    Mr. Heathcoat-Amory: I am not reading from a brief prepared by Customs and Excise. I am referring to my notes made for the purpose of resisting the clause. I confidently expect to see my hon. Friend in the Division Lobby with me, because he has been a proponent of deregulation and the simplification of the tax system.
    The proposed scheme and the proposed reduced rate for the complex range of energy-efficient materials would be a recipe for doubts and litigation that would make nonsense of our pledge to simplify the tax system and deregulate burdens on business—particularly small businesses. My hon. Friend has been a doughty champion of small businesses and the need to remove burdens from them. The amendment would add to their burdens, because small businesses would have to make sense of the secondary legislation and the complex borders and dividing lines between what is and what is not energy-efficient material.
    The points that I have made about the complexities are emphasised by looking at the amendment, as the House is being asked to approve a repayment scheme. The clause is aimed to help DIY converters—for example, someone who is converting a barn into a house. The clause as it stands allows that person to reclaim VAT on the construction and conversion of that dwelling. The amendment would bolt on to that clause a measure, the result of which will be that the person will not receive a
    1134
    refund for a large building project as was intended under the clause. Hundreds of thousands of energy-efficient conversions would be added to the measure, creating a regulatory paper chase.
    The problem is that there are 23 million households in this country, a high proportion of whom in any one year undertake additions to their houses involving energy-efficient goods. Under the provisions of the amendment, all of them would have to have the work done by a VAT-registered contractor who would have to be familiar with the complex secondary legislation and be able to make sense of it. The contractor would then have to submit a VAT invoice to the householder, who would then have to go along to Customs and Excise to receive back the VAT. That is a regulatory and bureaucratic nightmare.
    Mr. Simpson: Has the right hon. Gentleman received similar representations to those that I have received from small builders' associations, saying that they do not regard the proposals as too complex to administer or undesirable? They are overwhelmingly in favour of the proposals in the amendment.
    10.15 pm
    Mr. Heathcoat-Amory: I have received representations from many people wanting a reduced rate, but it is my duty as a Minister to point out the practical effects of passing such an amendment and the regulatory consequences.
    In Standing Committee, I was pressed, as were my right and hon. Friends, to simplify the tax system. Indeed, the Labour party voted on its own new clause to the Bill to insist on further simplification of the indirect tax system. I do not understand, therefore, how in the same sentence Labour Members can claim that they are in favour of simplification and deregulation of the tax system and urge on the country a system of bureaucratic regulation such as the one that I outlined.
    I must deal with one further point—that raised by my hon. Friend the Member for Southend, East (Sir T. Taylor). I do not know whether the proposals conflict with European Community law. because of the very complexity of the method used to achieve the refund of VAT, it may well be that a way has been found of complying with the requirements of EC legislation—I certainly do not want to inflame my hon. Friend by denying that that is possible—but that has been achieved only by putting before the House a proposal that is complex, regulatory and bureaucratic. To repeat the point, it conflicts with everything that I know my hon. Friend believes about shrinking the size of the state, getting complexities and regulations off the back of business and making our tax system comprehensible to the public.
    Finally, to return to the argument with which I started, I take energy efficiency seriously. We believe in working to improve the way in which the country uses energy. I have listened carefully, particularly to my hon. Friends the Members for Exeter and for South Suffolk (Mr. Yeo), both of whom have a long and honourable record of promoting energy efficiency. During the coming public expenditure round, we will look with more than the usual care to find out what needs to be done to improve energy efficiency. If we can find a way to achieve by other means, what the amendments seek to achieve, I will certainly endeavour to meet the points raised in the debate.
    question put, That the amendment be made:—
    The House divided: Ayes 279, Noes 280.

    Division No. 90]

    [10.17 pm

    AYES

    Abbott, Ms Diane

    Davies, Rt Hon Denzil (Llanelli)

    Adams, Mrs Irene

    Davies, Ron (Caerphilly)

    Ainsworth, Robert (Cov'try NE)

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

    Allen, Graham

    Denham, John

    Alton, David

    Dixon, Don

    Anderson, Donald (Swansea E)

    Dobson, Frank

    Anderson, Ms Janet (Ros'dale)

    Donohoe, Brian H

    Armstrong, Hilary

    Dowd, Jim

    Ashdown, Rt Hon Paddy

    Dunwoody, Mrs Gwyneth

    Ashton, Joe

    Eagle, Ms Angela

    Austin-Walker, John

    Etherington, Bill

    Banks, Tony (Newham NW)

    Evans, John (St Helens N)

    Barnes, Harry

    Ewing, Mrs Margaret

    Battle, John

    Fatchett, Derek

    Bayley, Hugh

    Faulds, Andrew

    Beckett, Rt Hon Margaret

    Field, Frank (Birkenhead)

    Beggs, Roy

    Fisher, Mark

    Beith, Rt Hon A J

    Flynn, Paul

    Bell, Stuart

    Forsythe, Clifford (S Antrim)

    Benn, Rt Hon Tony

    Foster, Rt Hon Derek

    Bennett, Andrew F

    Foster, Don (Bath)

    Benton, Joe

    Foulkes, George

    Bermingham, Gerald

    Fyfe, Maria

    Berry, Roger

    Galbraith, Sam

    Betts, Clive

    Galloway, George

    Blunkett, David

    Gapes, Mike

    Boateng, Paul

    George, Bruce

    Bradley, Keith

    Gerrard, Neil

    Bray, Dr Jeremy

    Godman, Dr Norman A

    Brown, Gordon (Dunfermline E)

    Godsiff, Roger

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

    Golding, Mrs Llin

    Bruce, Malcolm (Gordon)

    Gordon, Mildred

    Burden, Richard

    Graham, Thomas

    Byers, Stephen

    Grant, Bernie (Tottenham)

    Caborn, Richard

    Griffiths, Nigel (Edinburgh S)

    Callaghan, Jim

    Griffiths, Win (Bridgend)

    Campbell, Mrs Anne (C'bridge)

    Grocott, Bruce

    Campbell, Menzies (Fife NE)

    Gunnell, John

    Campbell, Ronnie (Blyth V)

    Hain, Peter

    Campbell-Savours, D N

    Hall, Mike

    Canavan, Dennis

    Hanson, David

    Cann, Jamie

    Harvey, Nick

    Carlile, Alexander (Montgomery)

    Hattersley, Rt Hon Roy

    Chidgey, David

    Henderson, Doug

    Chisholm, Malcolm

    Heppell, John

    Church, Judith

    Hill, Keith (Streatham)

    Clapham, Michael

    Hinchliffe, David

    Clark, Dr David (South Shields)

    Hodge, Margaret

    Clarke, Eric (Midlothian)

    Hoey, Kate

    Clarke, Tom (Monklands W)

    Home Robertson, John

    Clelland, David

    Hood, Jimmy

    Clwyd, Mrs Ann

    Hoon, Geoffrey

    Coffey, Ann

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

    Cohen, Harry

    Howarth, George (Knowsley North)

    Connarty, Michael

    Howells, Dr Kim (Pontypridd)

    Cook, Frank (Stockton N)

    Hoyle, Doug

    Cook, Robin (Livingston)

    Hughes, Kevin (Doncaster N)

    Corbett, Robin

    Hughes, Robert (Aberdeen N)

    Corston, Jean

    Hughes, Simon (Southwark)

    Cousins, Jim

    Hutton, John

    Cunningham, Jim (Covy SE)

    Illsley, Eric

    Cunningham, Roseanna

    Ingram, Adam

    Dalyell, Tam

    Jackson, Glenda (H'stead)

    Darling, Alistair

    Jackson, Helen (Shef'ld, H)

    Davidson, Ian

    Jamieson, David

    Davies, Bryan (Oldham C'tral)

    Janner, Greville

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

    Jones, Barry (Alyn and D'side)

    1136

    Jones, Ieuan Wyn (Ynys MÔn)

    Primarolo, Dawn

    Jones, Lynne (B'ham S O)

    Purchase, Ken

    Jones, Martyn (Clwyd, SW)

    Quin, Ms Joyce

    Jones, Nigel (Cheltenham)

    Radice, Giles

    Jowell, Tessa

    Randall, Stuart

    Keen, Alan

    Raynsford, Nick

    Kennedy, Charles (Ross,C&S)

    Reid, Dr John

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

    Rendel, David

    Khabra, Piara S

    Robertson, George (Hamilton)

    Kilfoyle, Peter

    Robinson, Geoffrey (Co'try NW)

    Kirkwood, Archy

    Roche, Mrs Barbara

    Lestor, Joan (Eccles)

    Rooker, Jeff

    Lewis, Terry

    Rooney, Terry

    Liddell, Mrs Helen

    Ross, Ernie (Dundee W)

    Litherland, Robert

    Ross, William (E Londonderry)

    Livingstone, Ken

    Rowlands, Ted

    Lloyd, Tony (Stretford)

    Ruddock, Joan

    Llwyd, Elfyn

    Salmond, Alex

    Loyden, Eddie

    Sedgemore, Brian

    Lynne, Ms Liz

    Sheerman, Barry

    McAllion, John

    Sheldon, Rt Hon Robert

    McAvoy, Thomas

    Shore, Rt Hon Peter

    McCartney, Ian

    Short, Clare

    McCartney, Robert

    Simpson, Alan

    Macdonald, Calum

    Skinner, Dennis

    McFall, John

    Smith, Andrew (Oxford E)

    McKelvey, William

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

    McLeish, Henry

    Smith, Llew (Blaenau Gwent)

    Maclennan, Robert

    Smyth, The Reverend Martin

    McMaster, Gordon

    Snape, Peter

    McNamara, Kevin

    Soley, Clive

    MacShane, Denis

    Spearing, Nigel

    McWilliam, John

    Spellar, John

    Madden, Max

    Squire, Rachel (Dunfermline W)

    Maddock, Diana

    Steel, Rt Hon Sir David

    Maginnis, Ken

    Steinberg, Gerry

    Mahon, Alice

    Stevenson, George

    Mandelson, Peter

    Marek, Dr John

    Stott, Roger

    Marshall, David (Shettleston)

    Strang, Dr. Gavin

    Marshall, David (Shettleston)

    Straw, Jack

    Marshall, Jim (Leicester, S)

    Martin, Michael J (Springburn)

    Sutcliffe, Gerry

    Martlew, Eric

    Taylor, Mrs Ann (Dewsbury)

    Maxton, John

    Taylor, Rt Hon John D (Strgfd)

    Meacher, Michael

    Taylor, Matthew (Truro)

    Meale, Alan

    Thurnham, Peter

    Michael, Alun

    Timms, Stephen

    Michie, Bill (Sheffield Heeley)

    Tipping, Paddy

    Michie, Mrs Ray (Argyll & Bute)

    Touhig, Don

    Milburn, Alan

    Trickett, Jon

    Mitchell, Austin (Gt Grimsby)

    Trimble, David

    Molyneaux, Rt Hon Sir James

    Turner, Dennis

    Moonie, Dr Lewis

    Tyler, Paul

    Morgan, Rhodri

    Vaz, Keith

    Morley, Elliot

    Walker, A Cecil (Belfast N)

    Morris, Rt Hon Alfred (Wy'nshawe)

    Walker, Rt Hon Sir Harold

    Morris, Rt Hon John (Aberavon)

    Wallace, James

    Mowlam, Marjorie

    Walley, Joan

    Mudie, George

    Wardell, Gareth (Gower)

    Mullin, Chris

    Wareing, Robert N

    Murphy, Paul

    Watson, Mike

    Nicholson, Emma (Devon West)

    Welsh, Andrew

    Oakes, Rt Hon Gordon

    Wicks, Malcolm

    O'Brien, Mike (N W'kshire)

    Williams, Rt Hon Alan (Sw'n W)

    O'Brien, William (Normanton)

    Williams, Alan W (Carmarthen)

    Olner, Bill

    Wilson, Brian

    O'Neill, Martin

    Wise, Audrey

    Pearson, Ian

    Worthington, Tony

    Pendry, Tom

    Wray, Jimmy

    Pickthall, Colin

    Wright, Dr Tony

    Pike, Peter L

    Young, David (Bolton SE)

    Pope, Greg

    Powell, Ray (Ogmore)

    Tellers for the Ayes:

    Prentice, Bridget (Lew'm E)

    Mr. Jon Owen Jones and

    Prescott, Rt Hon John

    Mr. John Cummings.

    1137

    NOES

    Ainsworth, Peter (East Surrey)

    Durant, Sir Anthony

    Aitken, Rt Hon Jonathan

    Dykes, Hugh

    Alexander, Richard

    Elletson, Harold

    Alison, Rt Hon Michael (Selby)

    Evans, David (Welwyn Hatfield)

    Allason, Rupert (Torbay)

    Evans, Jonathan (Brecon)

    Amess, David

    Evans, Nigel (Ribble Valley)

    Arnold, Jacques (Gravesham)

    Evans, Roger (Monmouth)

    Arnold, Sir Thomas (Hazel Grv)

    Evennett, David

    Ashby, David

    Faber, David

    Atkins, Rt Hon Robert

    Fabricant, Michael

    Atkinson, David (Bour'mouth E)

    Fenner, Dame Peggy

    Atkinson, Peter (Hexham)

    Field, Barry (Isle of Wight)

    Baker, Rt Hon Kenneth (Mole V)

    Fishburn, Dudley

    Baker, Nicholas (North Dorset)

    Forman, Nigel

    Baldry, Tony

    Forsyth, Rt Hon Michael (Stirling)

    Banks, Matthew (Southport)

    Forth, Eric

    Banks, Robert (Harrogate)

    Fowler, Rt Hon Sir Norman

    Bates, Michael

    Fox, Dr Liam (Woodspring)

    Batiste, Spencer

    Fox, Rt Hon Sir Marcus (Shipley)

    Bellingham, Henry

    Freeman, Rt Hon Roger

    Beresford, Sir Paul

    French, Douglas

    Biffen, Rt Hon John

    Fry, Sir Peter

    Body, Sir Richard

    Gale, Roger

    Bonsor, Sir Nicholas

    Gallie, Phil

    Boswell, Tim

    Gardiner, Sir George

    Bottomley, Rt Hon Virginia

    Garnier, Edward

    Bowis, John

    Gill, Christopher

    Boyson, Rt Hon Sir Rhodes

    Gillan, Cheryl

    Brandreth, Gyles

    Goodlad, Rt Hon Alastair

    Brazier, Julian

    Goodson-Wickes, Dr Charles

    Bright, Sir Graham

    Gorman, Mrs Teresa

    Brooke, Rt Hon Peter

    Gorst, Sir John

    Brown, M (Brigg & Cl'thorpes)

    Grant, Sir A (SW Cambs)

    Browning, Mrs Angela

    Greenway, Harry (Ealing N)

    Bruce, Ian (South Dorset)

    Greenway, John (Ryedale)

    Budgen, Nicholas

    Griffiths, Peter (Portsmouth, N)

    Burns, Simon

    Grylls, Sir Michael

    Burt, Alistair

    Gummer, Rt Hon John Selwyn

    Butcher, John

    Hague, Rt Hon William

    Butler, Peter

    Hamilton, Neil (Tatton)

    Butterfill, John

    Hampson, Dr Keith

    Carlisle, John (Luton North)

    Hanley, Rt Hon Jeremy

    Carlisle, Sir Kenneth (Lincoln)

    Hargreaves, Andrew

    Carrington, Matthew

    Harris, David

    Cartfes, Michael

    Haselhurst, Sir Alan

    Cash, William

    Hawkins, Nick

    Channon, Rt Hon Paul

    Hawksley, Warren

    Chapman, Sir Sydney

    Hayes, Jerry

    Churchill, Mr

    Heald, Oliver

    Clappison, James

    Heathcoat-Amory, Rt Hon David

    Clark, Dr Michael (Rochford)

    Hendry, Charles

    Clifton-Brown, Geoffrey

    Higgins, Rt Hon Sir Terence

    Coe, Sebastian

    Hogg, Rt Hon Douglas (G'tham)

    Colvin, Michael

    Horam, John

    Congdon, David

    Hordern, Rt Hon Sir Peter

    Conway, Derek

    Howell, Rt Hon David (G'dford)

    Coombs, Anthony (Wyre For'st)

    Howell, Sir Ralph (N Norfolk)

    Coombs, Simon (Swindon)

    Hughes, Robert G (Harrow W)

    Cope, Rt Hon Sir John

    Hunt, Rt Hon David (Wirral W)

    Cormack, Sir Patrick

    Hunt, Sir John (Ravensbourne)

    Couchman, James

    Hunter, Andrew

    Cran, James

    Hurd, Rt Hon Douglas

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

    Jack, Michael

    Curry, David (Skipton & Ripon)

    Jackson, Robert (Wantage)

    Davies, Quentin (Stamford)

    Jenkin, Bernard

    Davis, David (Boothferry)

    Jessel, Toby

    Day, Stephen

    Johnson Smith, Sir Geoffrey

    Deva, Nirj Joseph

    Jones, Robert B (W Hertfdshr)

    Devlin, Tim

    Kellett-Bowman, Dame Elaine

    Dicks, Terry

    Key, Robert

    Dorrell, Rt Hon Stephen

    Kirkhope, Timothy

    Douglas-Hamilton, Lord James

    Knapman, Roger

    Dover, Den

    Knight, Mrs Angela (Erewash)

    Duncan-Smith, Iain

    Knight, Rt Hon Greg (Derby N)

    Dunn, Bob

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

    1138

    Kynoch, George (Kincardine)

    Rowe, Andrew (Mid Kent)

    Lait, Mrs Jacqui

    Rumbold, Rt Hon Dame Angela

    Lang, Rt Hon Ian

    Sackville, Tom

    Lawrence, Sir Ivan

    Sainsbury, Rt Hon Sir Timothy

    Legg, Barry

    Scott, Rt Hon Sir Nicholas

    Leigh, Edward

    Shaw, David (Dover)

    Lennox-Boyd, Sir Mark

    Shaw, Sir Giles (Pudsey)

    Lester, Sir James (Broxtowe)

    Shephard, Rt Hon Gillian

    Lidington, David

    Shepherd, Sir Colin (Hereford)

    Lilley, Rt Hon Peter

    Shersby, Sir Michael

    Lloyd, Rt Hon Sir Peter (Fareham)

    Sims, Roger

    Lord, Michael

    Skeet, Sir Trevor

    Luff, Peter

    Smith, Tim (Beaconsfield)

    Lyell, Rt Hon Sir Nicholas

    Soames, Nicholas

    MacGregor, Rt Hon John

    Spicer, Sir James (W Dorset)

    MacKay, Andrew

    Spicer, Sir Michael (S Worcs)

    Maclean, Rt Hon David

    Spink, Dr Robert

    McNair-Wilson, Sir Patrick

    Spring, Richard

    Maitland, Lady Olga

    Sproat, Iain

    Major, Rt Hon John

    Squire, Robin (Hornchurch)

    Malone, Gerald

    Stanley, Rt Hon Sir John

    Mans, Keith

    Steen, Anthony

    Marland, Paul

    Stephen, Michael

    Marlow, Tony

    Stewart, Allan

    Marshall, John (Hendon S)

    Streeter, Gary

    Martin, David (Portsmouth S)

    Sumberg, David

    Mawhinney, Rt Hon Dr Brian

    Sweeney, Walter

    Mayhew, Rt Hon Sir Patrick

    Sykes, John

    Mellor, Rt Hon David

    Tapsell, Sir Peter

    Merchant, Piers

    Taylor, Ian (Esher)

    Mills, Iain

    Taylor, John M (Solihull)

    Mitchell, Andrew (Gedling)

    Temple-Morris, Peter

    Mitchell, Sir David (NW Hants)

    Thomason, Roy

    Moate, Sir Roger

    Thompson, Patrick (Norwich N)

    Monro, Rt Hon Sir Hector

    Thornton, Sir Malcolm

    Montgomery, Sir Fergus

    Townend, John (Bridlington)

    Needham, Rt Hon Richard

    Townsend, Cyril D (Bexl'yh'th)

    Nelson, Anthony

    Tracey, Richard

    Neubert, Sir Michael

    Tredinnick, David

    Newton, Rt Hon Tony

    Trend, Michael

    Nicholls, Patrick

    Trotter, Neville

    Nicholson, David (Taunton)

    Twinn, Dr Ian

    Norris, Steve

    Vaughan, Sir Gerard

    Onslow, Rt Hon Sir Cranley

    Viggers, Peter

    Oppenheim, Phillip

    Waldegrave, Rt Hon William

    Ottaway, Richard

    Walden, George

    Page, Richard

    Walker, Bill (N Tayside)

    Paice, James

    Wailer, Gary

    Patnick, Sir Irvine

    Ward, John

    Patten, Rt Hon John

    Wardle, Charles (Bexhill)

    Pawsey, James

    Waterson, Nigel

    Peacock, Mrs Elizabeth

    Watts, John

    Pickles, Eric

    Wells, Bowen

    Porter, Barry (Wirral S)

    Whitney, Ray

    Porter, David (Waveney)

    Whittingdale, John

    Portillo, Rt Hon Michael

    Widdecombe, Ann

    Powell, William (Corby)

    Wiggin, Sir Jerry

    Rathbone, Tim

    Wilkinson, John

    Redwood, Rt Hon John

    Willetts, David

    Renton, Rt Hon Tim

    Winterton, Nicholas (Macc'f'ld)

    Richards, Rod

    Wolfson, Mark

    Riddick, Graham

    Yeo, Tim

    Robathan, Andrew

    Young, Rt Hon Sir George

    Roberts, Rt Hon Sir Wyn

    Robertson, Raymond (Ab'd'n S)

    Tellers for the Noes:

    Robinson, Mark (Somerton)

    Mr. Tim Wood and

    Roe, Mrs Marion (Broxbourne)

    Mr. Patrick McLoughlin.

    Question accordingly negatived.
    Amendments made: No. 4, in page 17, line 22, leave out from '(1D)' to 'to' in line 23 and insert
    'For the purpose of this section works constitute a residential conversion'.
    No. 5, in page 17, leave out lines 32 to 35.—[Mr. Wells.]

  Clause 29

    GROUPS: ANTI-AVOIDANCE
    Amendments made: No. 42, in page 18, line 19, leave out from `83(wa),' to 'in' in line 24 and insert
    `the cases in which the tribunal shall allow the appeal shall include (in addition to the case where the conditions for the making of the direction were not fulfilled) the case where the tribunal are satisfied,'.
    No. 43, in page 18, line 32, leave out from 'of to end of line 34 and insert 'Schedule 9A.".'.—[Mr. Wells.]

  Schedule 3

    VALUE ADDED TAX: ANTI-AVOIDANCE PROVISIONS
    Amendments made: No. 44, in page 172, line 55, leave out 'it appears to them'.
    No. 45, in page 172, line 56, leave out 'that'. No. 46, in page 173, line 1, leave out 'that'.
    No. 47, in page 173, line 2, leave out first 'that'.
    No. 48, in page 173, line 5, leave out from beginning to end of line 7 and insert
    `the transaction in question is not a supply which is the only supply by reference to which the case falls within paragraphs (a) to (c) above.'.
    No. 49, in page 175, line 47, leave out
    `appears to the Commissioners to have'.—[Mr. Wells.]
    Further consideration adjourned.—[Mr. Wells.]
    Bill, as amended (in the Committee and in the Standing Committee), to be further considered tomorrow.
    Mr. Ian Bruce: On a point of order, Mr. Deputy Speaker. I wonder if you can help the
    1140
    House. On Monday, a document was introduced into the House that purported to be a draft of an order that was supposed to have been introduced by the Labour party in 1978 on treating cattle food. The Labour Front Benchers said then that that document would be available to the House, but there has been nothing on the record to identify that document. I have tried to get a copy and I wonder whether you can help the House by explaining that such documents, when introduced, should be identified in Hansard.
    Mr. Deputy Speaker: That has absolutely nothing to do with the Chair.

  PETITION

    Poverty (North-east England)
    10.35 pm
    Ms Joyce Quin: I wish to present a petition organised by the North East Child Poverty Action Group and signed by some 300 people, including many of my constituents and those of my hon. Friends who represent Newcastle-upon-Tyne and adjacent areas. The petition expresses great concern about the growing incidence of poverty, the great harm that it is causing in our society and the difficulties that confront people who are forced to live on low incomes and on inadequate benefits in north-east England.
    The petition concludes:
    Wherefore your Petitioners pray that your honourable House ensures that no further cuts in social security benefits are made.
    And your Petitioners, as in duty bound, will ever pray etc.
    To lie upon the Table.

    Ex-service Men (Asbestos Exposure)
    10.36 pm
    Sir Peter Lloyd: My purpose this evening is to raise with my hon. Friend the Minister of State for the Armed Forces the situation of service men who have developed asbestosis-related conditions as a result of exposure to that material in course of their duties before 1987.
    The significance of the year is that it is when the Government invited and backed the private Member's Bill promoted by my hon. Friend the Member for Davyhulme (Mr. Churchill) to repeal section 10 of the Crown Proceedings Act 1947. The Government deserve full praise for taking that initiative, which enabled service men for the first time to secure damages for injuries sustained in service which were the result not of hostilities, but of error or negligence on the part of the Ministry of Defence or its agents. The ensuing Crown Proceedings (Armed Forces) Act 1987 put service men on the same footing as civilians employed by the MOD, and was intended to remove for the future a potent source of unfairness.
    Naturally, like other legislation, the Act had no retrospective effect, and no service man who had sustained injury before 1987 could benefit from it. It simply drew the line under everything that had gone before. I well understand why that principle is followed by successive Governments of every political complexion when they legislate, especially on employment conditions, rights and obligations. Any other approach would nearly always produce too many difficult time-consuming cases, in which the evidence was no longer available or which produced unfairness and anomalies.
    However, such common-sense rough justice, which ensures that everyone knows exactly where he stands, may be right for the generality of cases, but it does not serve for the very special circumstances of service men suffering from asbestos-induced disease and disability. The great difference when asbestos is involved is that the effects of exposure do not become apparent until many years later. So it is only recently, well after 1987, that service men are being disabled as a result of exposure in the 1960s and 1970s. Thus, with asbestos, no final line can really have been drawn in 1987. In fact, it is drawn again and again in practice, whenever the symptoms develop and an asbestos-related disability takes hold, and another service man or former service man finds his health. his job and eventually his life taken painfully away.
    The unfairness to the former service man newly afflicted with the symptoms of asbestosis is not just in being told that he cannot apply for compensation because his condition is not really new, as it was the result of exposure before 1987; the unfairness lies also in the knowledge that a civilian MOD employee who has just developed the same symptoms, possibly from exposure while working in the same job at the same time all those years ago. can seek and get substantial compensation.
    Mr. David Martin: I congratulate my right hon. Friend on bringing this growing injustice before the House. As he can see from the number of our hon. Friends who are attending the debate, it is a matter that takes up the time of, and causes anxiety to, quite a few of us. I hope that his debate will lead to early action by the Government.
    Sir Peter Lloyd: I am grateful to my hon. Friend. He is quite right.
    For the service man developing an asbestos-related condition in 1996, there is still only a war pension, while for the civilian MOD employee with exactly the same condition, there is industrial disability benefit and compensation. In a number of respects, the war pension is considerably more generous than IDB, although they both produce fairly similar sums weekly. Where disability is 100 per cent., that is about £90 to £100 a week.
    It is in the availability of compensation, where the civilian victim can be awarded £150,000 to £200,000 in the severest cases, that the inequality lies. Compensation means a lump sum which can make the last months or years of a sufferer's life more comfortable, and can take away a great deal of worry about how his dependants will fare after his premature death.
    The injustice is compounded by the cruelty of the condition. It can take many forms: from the deadly tumour of mesothelioma, to asbestos-induced lung cancer, to cancer of the larynx, asbestosis, pleural thickening and pleural plaques, in rough descending order of malignancy. Most are disabling and life shortening; all are a source of worry, discomfort and reduced activity.
    This well-founded sense of injustice is further exacerbated by the knowledge that the MOD, like many other public and private employers, was culpably slow to act on the evidence, plentifully available in the 1960s and 1970s, that asbestos is a killer.
    There is no doubt that the MOD failed to show the foresight and to exercise the proper care that it should have done. The fact that it has awarded compensation to almost 1,500 civilian employees since 1985 proves that point. I do not know how many service men have also developed one of these conditions. No doubt the information is present in the details of war pensions awarded. I was told in answer to a parliamentary question, however, that it would cost too much to sift out this information.
    So what proportion of the 297,000 war pensions granted since 1985 are for asbestosis-related conditions is not known. It would not, I suppose, be unreasonable to assume that they are running at a level similar to that for civilian cases.
    I know that I do not have to persuade the Minister of the pain and distress that these conditions bring to service men and their families. I know that he is aware of that. I know I do not have to win his sympathy for their plight. Nor do I have to convince him of the inequity of their treatment compared with their civilian colleagues, who were exposed at the same time and with the same horrific, though long-delayed, consequences. But I do realise that, as a Minister, he comes here tonight bound by the law and practice as they stand, and that he cannot offer the House a remedy off the cuff. I am not asking him for one.
    I am, however, asking my hon. Friend to accept that this is a problem which simply will not go away. As the number of victims grows as a result of the after-effects of the intensive use of asbestos in the 1960s and 1970s, so will public disquiet and the sense of injustice, which cannot permanently be ignored. For it will not be until well into the next century that the number of new cases each year will begin to reduce.

    1143
    The fact that, unlike most Adjournment debates, I am not speaking to an empty House, but that my hon. Friends the Members for Portsmouth, South (Mr. Martin), for Portsmouth, North (Mr. Griffiths), for Isle of Wight (Mr. Field), and for Wyre Forest (Mr. Coombs), and the hon. Members for Leeds, West (Mr. Battle) and for Plymouth, Devonport (Mr. Jamieson) on the Opposition Benches have stayed to express their interest and support is an early sign of the strong and determined feeling that this subject will increasingly evoke.
    I understand that my hon. Friend can promise no remedy now, but I make a particular request of him. Will he undertake with his colleagues in the Department of Social Security to study the problem, establish the facts, and make them available to the House? It is unsatisfactory, to say the least, to be told that the number of war pensioners with asbestosis remains uncounted. I believe that the House should know how many there are and at what rate new applications are coming in; what the accurate comparisons between the financial circumstances of Ministry of Defence civilians and service suffers are, taking into account pensions benefits and compensation; and what is the nature and extent of the unprotected exposure of service men and MOD civilians to asbestos, and when it ceased.
    If the outcome of my hon. Friend's study confirms, as I fear it will, a sharp inequity of treatment between service men and civilians, I am sure that he and his colleagues will need to give serious thought to how it might be ameliorated. I do not believe that retrospective legislation is the right answer. Instead, I wonder whether the expedient of the Secretary of State simply refraining from certifying asbestos exposure cases under section 10(2) of the Crown Proceedings Act 1947 would serve. I suspect that it might not, as he may have a duty to sign when a case meets the criteria. Perhaps my hon. Friend will reflect and let me know, if not this evening, in due course by letter.
    I should imagine that the best way forward is by way of ex gratia payments designed to put the former service men suffering from asbestosis into a similar financial situation as the civilian. Again, there may be some difficulty, because, with the large number of cases that I fear there are, such payments may not be a legitimate source of discretion, which are designed to cover only special cases and not a whole category. Perhaps my hon. Friend will let me know what the legal considerations are here, too.
    I urge my hon. Friend not to delay, not only because any extra help is needed by those service men and their families now but because I am sure that he would wish to forestall a case going to the European Court of Human Rights. The Portsmouth Evening News, which has been publicising the plight of these former service men, has opened a public fund to finance a legal opinion and initial test case. I shall not seek to lay out the grounds on which such a case might be based, as my hon. Friend has legal experts who can advise him more thoroughly than I—although I know that the Government have not always won judgments that they felt that they should have won from that court.
    That apart, I believe that it would be a shaming end to this unhappy story if the Government, after more delay, were finally obliged to do the right thing for their
    1144
    asbestos-disabled service men only by the intervention of a bench of foreign judges. We should resolve this matter ourselves, willingly, justly and without delay.
    10.48 pm
    The Minister of State for the Armed Forces (Mr. Nicholas Soames): I warmly congratulate my right hon. Friend the Member for Fareham (Sir P. Lloyd) on securing this very important Adjournment debate. I acknowledge, as he did, the presence of other hon. Friends tonight, and that of the hon. Members for Leeds, West (Mr. Battle) and for Plymouth, Devonport (Mr. Jamieson) on the Opposition Benches. I am glad that this should be such a well-attended Adjournment debate. It induces a warm feeling in a Minister who is so used to speaking to an entirely empty House bar one other hon. Member—except yourself, Mr. Deputy Speaker.
    My right hon. Friend has been an extremely assiduous campaigner on this issue, and I applaud his concern and, I understand, that of a number of his constituents, to see that ex-service personnel are not left without help or assistance, should they need it, after they have served their country well. I hope, however, that I can reassure him tonight that that is not the case. If I cannot deal with any of his points in my speech, I shall write to him. I assure him that we shall pay the closest attention to all that he has said.
    Before I tackle the points that my right hon. Friend raised in his well-informed speech, I hope that he and others will forgive me if I set out a little of the history of asbestos usage. Asbestos is a natural, not an artificial, substance. Its widespread use dates from around 1890, and its common forms were used widely in industry for purposes such as insulation and fire prevention. Indeed, used in that way it certainly saved lives that would otherwise have been lost.
    The hidden penalty was, of course, the long-delayed incidence of asbestos-related diseases resulting from the inhalation of airborne asbestos dust or fibres. Those diseases include certain extremely disagreeable types of cancer, and also the crippling lung disease asbestosis. They can take from 15 to over 40 years to develop.
    One of the chief industrial uses of asbestos was in ships' boilers and engine rooms, including those of Royal Navy warships. Regrettably, people engaged in maintenance and repair work in such areas up to about the late 1960s could have been exposed to significant quantities of airborne asbestos dust and fibres. Thereafter, more comprehensive legislation was thankfully introduced to deal with the hazards of asbestos.
    Much more stringent controls are in place today, and the use of asbestos has been discontinued in all applications for which there is a suitable alternative. All asbestos products require the approval of the Health and Safety Executive. Wherever possible, the Ministry of Defence employs specialist contractors, licensed by the HSE, to deal with asbestos.
    Where MOD employees, service or civilian, have to work with asbestos, the same regulations now apply. The HSE must be notified, and the work is subject to scrutiny by the enforcement agency in just the same way as work in the civil and private sectors. We have also introduced procedures to record any exposure to asbestos dust above statutory action levels, and to provide appropriate medical surveillance.

    1145
    As my right hon. Friend knows, however—along, no doubt, with all other hon. Members who are present—the sad fact remains that, in the 1950s and 1960s, general controls on the use of asbestos were entirely inadequate. Royal Navy personnel and civilian workers engaged in ship maintenance and repair in boiler rooms and the like were allowed to breathe air containing much more asbestos dust and fibres than was safe, or than would now be permitted.
    For that reason, there are likely to be a number of ex-service personnel, as well as civilian defence workers, among those from British industry generally who are now suffering and, sadly, dying from asbestos-related diseases. I fully acknowledge that, and we do not seek to avoid the issue in any way.
    My right hon. Friend pointed out that ex-service victims of asbestos, unlike their civilian counterparts, have been debarred from suing for compensation by section 10 of the Crown Proceedings Act 1947. The law was changed in 1987. Before then, there had been some tragic cases of service men seriously injured by accidents on duty. If they had been civilians, they would have been able to seek compensation from their employer, when accidents resulted from negligence for which the employer was responsible.
    Although the law was changed, so that service personnel now have exactly the same compensation rights against the MOD as their civilian counterparts have against their employers, Parliament accepted that repeal would not be retrospective, and that no ex gratia compensation would be paid for events that occurred before the repeal was announced in December 1986. That lack of retrospection was the subject of careful and detailed consideration at the time. Even for those tragic cases which had largely prompted the decision to repeal, compensation would not be paid.
    In the light of recent representations from my right hon. Friend and others, we have looked carefully again at the asbestos issue. We all have the utmost sympathy with those who have suffered as a result of serving their country, whether the suffering began at the time or whether it set in later. However, to make payments now, on some sort of ex-gratia basis, to asbestos victims who are debarred by section 10 of the Crown Proceedings Act, would be entirely and wholly inconsistent with Parliament's decision in 1987.
    How could we possibly justify compensating someone disabled now because of asbestos exposure pre-1987, and not compensating somebody disabled by a negligent accident pre-1987? At the same time, all the arguments against retrospection, which were accepted in 1987, apply even more so nearly 10 years later. It saddens me greatly to say it, but the fact is that we cannot reopen every page of these tragic histories and rewrite them with the aid of a blank cheque—which is what it would be.
    Mr. David Jamieson: congratulate the right hon. Member for Fareham (Sir P. Lloyd) on securing the debate. He will appreciate that this is a cross-party issue. My hon. Friends the Members for Dunfermline, West (Ms Squire) and for Leeds, West (Mr. Battle) have a great interest in the matter, and I represent many service men and service women.
    1146
    Would the Minister at least give an assurance? We do not ask for a blank cheque. I have two simple requests for the Minister. First, will he make an assessment of how many service men receive war pensions due to exposure to asbestos? Secondly, will he make an estimate of what it would cost to compensate them at the same rate as civilian workers? If we got that from the debate, without an assurance from the Minister that an unquantifiable sum would be available, it would satisfy many hon. Members that at least the Government were moving along the right road.
    Mr. Soames: Perhaps the hon. Gentleman will allow me to continue with my speech. I hope to deal with some of the points that have been raised in the debate.
    My right hon. Friend has said that, with asbestos, unlike with accidents, the effect may have occurred after 1987, even though the cause was long before. This is correct, but it is still not a reason for treating asbestos victims differently. It has long been obvious, certainly since well before 1987, that cases of asbestos-related disease would continue to arise as a result of long-past exposure, for well into the future. As my right hon. Friend rightly said, they will continue into the next century.
    I turn now to the comparison between former service men and former civilian workers. It is true that, where section 10 of the Crown Proceedings Act applies, ex-service men are not eligible for compensation, where their civilian counterparts are. On the other hand, ex-service men and their widows can apply to the War Pensions Agency of the Department of Social Services when disability or death has resulted from service in the armed forces, in war or peace. This includes those suffering from asbestos-related disease. The level of pension depends on the degree of disablement, but it can be, and often is, substantial.
    I take as an example someone with 50 per cent. disablement through reduced lung function. That means being able to walk only for 200 or 300 yards on the flat. The basic rate of his war pension is over £50 per week. Someone with a more severe reduction in lung function who gets short of breath just from talking or dressing could be assessed as 100 per cent. disabled, and his basic rate of war pension would be over £100 per week. On top of this, he would qualify for extra supplements and allowances for attendance needs, inability to work, clothing, and so on. These could raise his war pension to anything up to about £370 per week. These sums are tax-free and index-linked. The rate for war widows in the age groups relevant here is from about £140 per week upwards, depending on allowances.
    As my right hon. Friend knows, I am not able tonight to discuss individual cases. The pensions in question are not even matters for my Department. But let us imagine someone in his 50s or 60s, whose disability is moderate for a few years, then severe for further years. He then sadly dies from asbestos-related disease, leaving a widow who lives on for some years thereafter. War pension payments to the man and his widow could total many tens of thousands of pounds.
    Of course, civilians with asbestos-related disease might qualify for help from the DSS. But given the level of benefits available for ex-service personnel under the war pension scheme, service men cannot be regarded as

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    seriously disadvantaged through lack of compensation from the MOD for asbestos disease. The average compensation paid by my Department to former civilian workers with asbestos-related disease is under £20,000. Amounts vary greatly, of course, according to particular circumstances.
    For example, someone who dies relatively young, thus losing career earnings, and also leaving dependants, would clearly be liable to get a higher rate of compensation. Compensation claimants can, of course, take the matter to court if they dispute the amount offered by the employer's insurance company. But the average pay-out to civilian asbestos claimants since 1987 for illness caused by asbestos when working for the MOD in previous decades is under £20,000.
    Broadly speaking, I do not think that ex-service asbestos victims can be said to be disadvantaged compared with their civilian counterparts. They are disadvantaged compared with the position they would be in if they had been exposed to dangerous amounts of asbestos in the services since 1987, when the law was changed to allow service men to sue the Crown for compensation, in addition to war pensions. One hopes that no one has been so exposed in the services since 1987, but in any event that is a very different comparison.
    I hope that my right hon. Friend will understand that the Ministry of Defence truly has the utmost sympathy for those who find themselves afflicted by those horrible
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    diseases, and that the service personnel in question are most definitely not placed in a worse position than their civilian comrades.
    My right hon. Friend is welcome to write to me, and to come to see me, if he knows of ex-service asbestos cases for which overall Government provision appears inadequate. I would ask him, however, to take each person's war pension into account. Anyone seriously disabled with asbestos-related disease through service in the armed forces can get a substantial tax-free income from the War Pensions Agency of the DSS.
    My Department will study with great care the points raised by my right hon. Friend, the hon. Member for Plymouth, Devonport (Mr. Jamieson) and my hon. Friend the Member for Portsmouth, South (Mr. Martin). I will write to my right hon. Friend to deal with any issues that I have not dealt with tonight in detail. I give him an assurance that the MOD wishes to continue to study the problem.
    I am aware of the campaign that is being run and the legal appeal fund that has been set up in right hon. Friend's constituency. We will continue to keep the matter to the forefront of our mind. I share my right hon. Friend's anxieties, and I warmly applaud the steps that he has taken so far to lobby and to raise the matter on the Adjournment. We will continue to study the issue, and I will be pleased to see my right hon. Friend to discuss the matter further.
    Question put and agreed to.
    Adjourned accordingly at three minutes past Eleven o'clock.