Commons Sitting of 28 March 1996

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

  BODMIN MOOR COMMONS BILL [Lords]
  Order for Second Reading read.
  To be read a Second time upon Thursday 18 April.

Oral Answers to Questions
  AGRICULTURE, FISHERIES AND FOOD

    Common Agricultural Policy
    Mr. Sutcliffe: To ask the Minister of Agriculture, Fisheries and Food what plans he has to press for reform of the common agricultural policy; and if he will make a statement. [21601]
    Mr. Spring: To ask the Minister of Agriculture, Fisheries and Food what proposals he has for reform of the common agricultural policy. [21604]
    The Minister of Agriculture, Fisheries and Food (Mr. Douglas Hogg): I shall seek to build on the European Commission's acceptance of our view that the common agricultural policy must change by continuing to press for progressive reductions in production-linked support and the eventual removal of artificial restrictions on production.
    Mr. Sutcliffe: Is not the Government's credibility in question in view of yesterday's export ban on British beef? What are the Minister's plans for rebuilding confidence in British beef? Will he implement the proposals of my hon. Friend the Member for Edinburgh, East (Dr. Strang) and the National Farmers Union, which would regain the credibility of British beef? More important, any reform of the common agricultural policy would be helped if the Government made sure that they put the interests of British people first.
    Mr. Hogg: I certainly think that the decision by the European Union to ban, or temporarily suspend, the importation of British beef is not founded on the scientific evidence, and is therefore wrong. As our advisory committee has made absolutely plain, provided the controls are fully implemented, the risk from eating beef is extremely small or, to use ordinary language, British beef is safe.
    Mr. Spring: Does my right hon. and learned Friend agree that any reform of the CAP must look closely at beef production and include long-term reassurance to the British and continental public that British beef is safe? Does he share my view that the collapse in confidence in British beef is due in part to the quite disgraceful and irresponsible scaremongering of the hon. Member for Peckham (Ms Harman)?
    Mr. Hogg: Much of the hysterical reaction to the contents of the scientific committee's report has contributed to the lack of public confidence. I deeply regret that, and those who have been party to it should be ashamed of themselves.
    Mr. Wigley: Is the Minister aware that rural Wales faces devastation from the prospective loss of as many as 20,000 jobs because of the beef crisis? Will he confirm that it is within the Government's power to bring in an intervention scheme and that it would be possible to have a British aid scheme on that basis? Will he make an announcement about selective culling to restore confidence? When, oh when, will the Government do something? People are losing their livelihoods and the farms that they have built up over a generation while the Government seem mesmerised, like chickens in the headlights of a car.
    Mr. Hogg: There is unquestionably a lack of consumer confidence at the moment. I do not believe that it is justified because it is quite plain from what the Spongiform Encephalopathy Advisory Committee—SEAC—has said that, to use ordinary language, British beef is safe. There is a debate later today in which I shall set out our further thoughts. I think that they will be of assistance to the House.
    Sir Michael Spicer: Is not the situation with respect to British beef and the CAP that either British beef and British beef producers will be supported through intervention buying through the CAP or we shall have to go it alone through some form of national deficiency payments? Would not that begin to spell the end of the CAP as we know it?
    Mr. Hogg: My hon. Friend is entirely right to focus on the existing intervention scheme. The European Union, through its policies within the agricultural policy, should play a full part in supporting the British meat industry at this time.
    Dr. Strang: May I suggest to the Minister that, from the start, a more constructive approach should have been taken to the inevitable concern in Europe following last week's announcement on BSE and CID? Will he agree to a change in his position today? Will he assure us that his officials are talking with European Commission officials about measures that aim to get rid of BSE? Does he agree that it would be valuable to agree a package that has European support and European funding?
    Mr. Hogg: The hon. Gentleman has called for a more constructive attitude. I assume that that is an implied rebuke for the hon. Member for Peckham (Ms Harman). As to the substantive part of his question relating to talks with the European Union, I confirm that officials were in

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    Brussels yesterday and are in Brussels today discussing possible ways of restoring confidence in British beef and ways in which the European Union can play a full part in providing financial assistance. I anticipate going to Brussels shortly to reinforce those discussions.

    Food and Drink Industry
    Mr. Alexander: To ask the Minister of Agriculture, Fisheries and Food what plans he has to develop export opportunities for the United Kingdom's food and drink industry. [21602]
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Angela Browning): During the past year, and with the Government's financial support, Food From Britain has opened new representative offices in Japan and Denmark. FFB's corporate strategy for the next three years involves expanding the coverage of its existing offices and extending its services into central Europe and the middle east.
    Mr. Alexander: I am grateful for that reply but, as the export of beef is one of the most important components of the food and drink industry, is it not urgent that an emergency package of relief for farmers and the industry should be announced very soon to avoid widespread bankruptcy and unemployment? In that connection, will my hon. Friend, and my right hon. and learned Friend the Minister, encourage British banks to be as supportive as they can of the farming industry until this crisis is sorted out?
    Mrs. Browning: We are all aware of the grave difficulties in all sectors of the industry, from the farm right through the food processing chain. I refer my hon. Friend to the comments a few moments ago of my right hon. and learned Friend the Minister. I hope that my hon. Friend will attend tonight's debate.
    Mr. Cousins: Does the Minister accept that one of the things that could transform beef export prospects is an effective and accurate live test of cattle? Will she therefore reconsider the prospects of Dr. Narang of Newcastle, my constituent, who was personally refused a research grant by the Secretary of State as recently as 21 February? Does she agree that this is not the moment to turn down any avenue of research advance that could transform the prospects of our farmers and their exports?
    Mrs. Browning: I confirm that the hon. Gentleman's constituent, Dr. Narang, has been invited to give his information to SEAC for consideration, but I must point out that Dr. Narang has refused to have published in the necessary scientific journals for scientific scrutiny the research that he has done to date. When invited by the Ministry of Agriculture, Fisheries and Food to make that information available to us, he has refused to do so.
    Mr. Marlow: Will my hon. Friend make it clear that the biggest problem that has been imposed on British beef and the food industry has been imposed illegally by the European Commission, which has decided to ban British beef? It is allowed to make a decision on the basis of there being a severe hazard to health. There is no severe hazard
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    to health and it accepts that. Its decision was made politically, has devastated British industry and British agriculture and is now devastating European agriculture. The only way to put this right is not to receive the European Commission's generosity, but to have legal compensation from the Europeans.
    Mrs. Browning: My hon. Friend identifies very clearly what has happened. The scientists who advise the Commission have had all the science put in front of them, but their decision making and determination has not been based on that scientific evidence. As my hon. Friend says, that has had a dreadful effect on the British beef industry which is now spreading to the Europewide meat industry in general. I have heard what my hon. Friend has said and there is much sympathy with the points he made.
    Mr. Tyler: May 1 place on record that we Liberal Democrats believe that this is not the appropriate time for recriminations such as we have heard? Does the hon. Lady agree that the first step towards re-establishing our export position in Europe should be taken here at home? Germans will not buy British beef, regardless of any ban, if public confidence remains at such a low ebb in the United Kingdom. Has she and the Minister had time to look at the package of proposals that we put to them last night, which we hope will make a positive contribution to what is undoubtedly a very difficult situation that requires consensus across the House if we are to solve it?
    Mrs. Browning: We have received many packages of proposals from various organisations—the NFU, the food industry and other political parties, including the Liberal Democrats. I welcome the hon. Gentleman's initial comment. Making the issue party political will only damage British farmers, the British food industry, other industries and British jobs, for which those who have turned it into a party political scare must take personal responsibility. I assure the hon. Gentleman that we welcome his statement. We shall study all options and bring them forward as quickly as possible.
    Sir John Cope: Will my hon. Friend do her best to make it clear as widely as possible that farmers have confidence in British beef because they have seen the number of BSE cases come down in recent years and therefore trust what the vets and doctors say?
    Mrs. Browning: The farming community understands only too well why policy has always been—and will continue to be—based on scientific evidence available at the time. We are all aware, however, that, beyond the science, there is a need for market support. I can assure my right hon. Friend, and the farming community that he represents, that we shall take every step necessary to restore confidence as quickly as possible.
    Mrs. Golding: Is the Minister really aware of the extent of the damage to our export opportunities that has been caused by the Government's failure to act swiftly and ruthlessly on BSE? Will she assure the House that that catalogue of delay will never be allowed to happen again?
    Mrs. Browning: The hon. Lady should study the facts. We received SEAC's scientific advice concerning the 10 CJD cases, and the necessary steps that it

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    recommended, at midday last Wednesday. By 3.30 pm that day, the information was being conveyed to hon. Members. One cannot act any faster than that.
    Subsequently, of course, the scientists in Europe have taken their disgraceful decision and made recommendations that, as I have already said, were based not on science but on other issues. It is therefore necessary, now that that has happened, to try to remove the temporary ban on the export of British beef. We feel sure that that will be the first step towards restoring public confidence, which, as the hon. Member for North Cornwall (Mr. Tyler) said, begins at home.
    I sincerely hope that, as an Opposition agriculture spokesman, the hon. Lady will add her voice to those of some of her hon. Friends who recognise the danger in following the attitude of other Opposition Front-Bench spokesmen in building up the scare and turning the matter into a party political brickbat competition. Too many jobs are at stake to play party politics with the industry.
    Mr. Budgen: When my right hon. and learned Friend the Minister said a few moments ago that the ban on exporting beef was not based on scientific evidence and was wrong, did he mean that the ban was illegal? If it is illegal, what action does he intend to take about it in the European Community?
    Mrs. Browning: The ban is not illegal in terms of the law as it stands in the European Community. My point was that, whereas in this country we make decisions based on science—one could reasonably have expected scientists in Europe to follow the same principle—other countries in the European Community have singularly failed to do so.

    Farm Workers
    Mr. Clapham: To ask the Minister of Agriculture, Fisheries and Food when he last met representatives of the rural, agricultural and allied workers trade group of the Transport and General Workers Union to discuss employment conditions for farm workers. [21603]
    The Minister for Rural Affairs (Mr. Tim Boswell): I have not yet had the opportunity to meet formally representatives of the rural, agricultural and allied workers trade group. I should be happy to do so, if they wish.
    Mr. Clapham: I am rather surprised by that answer, given that about 350 BSE-infected cows are disposed of each week. Bearing in mind the fact that there will be a greater number if there is selective slaughter and that concern has been expressed that the humane killer could spread infected brain tissue, I should have thought that the Minister would have sought the advice of the Health and Safety Executive on the protection with which workers should be provided, and ensured that he met the unions to give them the Health and Safety Executive's advice.
    Mr. Boswell: It is, of course, entirely within the remit of the Health and Safety Executive to carry out such studies and to consider any evidence laid before it. Policy responsibility for the executive rests with my right hon. Friend the Secretary of State for the Environment. We do, of course, take an interest in those matters and we are
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    more than pleased to pass on any representations to the executive and, equally, to SEAC for expert scientific appraisal. These are serious matters which affect concerns about the health and welfare of the working population and about their employment prospects. We take those concerns seriously and we are prepared to consider any evidence, or to hold any discussions, that they feel appropriate.
    Mr. Bill Walker: When my hon. Friend meets this august body, will he tell it that many farm jobs are at risk in Scotland in the prime beef-producing areas, which produce quality beef? The problem has been caused by careless talk, much of it in the House, and by action taken within Europe which means that, whatever we have, we do not have a common agricultural policy. It should be recognised that animals in Europe suffer the same ailments as animals in the United Kingdom. We want a level playing field.
    Mr. Boswell: I would be pleased to pass on those messages. We suffer at the moment from an unfortunate combination of scare tactics, for political reasons, on the part of certain hon. Members and an inappropriate and disproportionate reaction by some of our European colleagues which is not based on the science.
    Mr. Hood: More than 200,000 jobs in Scotland are at stake as a result of the BSE scare. May I remind the Minister that, when the farmers asked the Parliamentary Secretary for help last week, the only help she offered was to put good Samaritans on the other end of a helpline? Can we stop the nonsense about political opportunism? If we had accepted the statement by the Secretary of State for Health—that it was the people who were mad and not the cows—where would we have been today?
    Mr. Boswell: The hon. Gentleman might care to have a word with the hon. Member for Peckham (Ms Harman). He is worried about the 200,000 jobs in the beef industry in Scotland, but he should be aware that she started that hare and that she was fully followed by a number of Labour Members.

    Animal Welfare
    Sir Michael Neubert: To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about developments in his negotiations with his European counterparts about the welfare of animals. [21606]
    Mr. Douglas Hogg: Discussion of the Commission proposals for amending the European Union directive on the welfare of calves has now commenced. I have made it clear to my colleagues that the United Kingdom will continue to press for the early introduction of adequate space and dietary requirements. In addition, the Government will press at the intergovernmental conference for a protocol to be added to the treaty of Rome to place an obligation on a Council of Ministers to give full regard to considerations of animal welfare in the exercise of its powers on agriculture, transport, research and the single market.
    Sir Michael Neubert: Will my right hon. and learned Friend accept credit for the success of the Government's efforts to persuade other countries in the EU to consider high standards of animal welfare, in line with our own? Will he continue his efforts to press for an early end to the veal crate and its associated restrictions on space and diet? Will he seek an amendment to the treaty that would give the welfare of animals the importance that it has in this country? Presumably that would not include the unjustified slaughter of masses of cattle.
    Mr. Hogg: I am grateful to my hon. Friend for his support. Veal calf crates are an important subject, and I am glad to say that proposals are now being made by the Commission. At the moment, the time contemplated for the implementation of the new regime-12 years—is in our view far too long. We shall press for a shorter time.
    Dr. Strang: Will the Minister acknowledge that BSE is a terrible and invariably fatal disease in cattle and that, since last week, there has been concern about a link with human beings? Has he seen the letter that I sent him yesterday, setting out Labour's proposals to restore confidence in British beef, keep the BSE agent out of our food, improve the epidemiology of the disease, increase consumer awareness and make Government action more effective? Will he adopt a constructive approach to those proposed measures?
    Mr. Hogg: Of course BSE is a terrible disease; CJD is an even more terrible disease. Yes, I have seen the letter from the hon. Gentleman; he will bear in mind the fact that we are to have a debate. He asked whether I was adopting a constructive approach to the problems. The answer is yes, I am, and I shall set out my thoughts more fully in this evening's debate.

    Fish Quotas (Essex)
    Mr. Amess: To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the fish quotas which apply to Essex fisherman. [21607]
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Tony Baldry): The UK fish quotas are apportioned between producer organisations, the non-sector—representing vessels over 10 m in length that do not belong to producer organisations—and the under-10 m fleet. Most Essex fishermen fish against the separate allocations of quota made to the non-sector and to the under-10 m group of vessels.
    Mr. Amess: Is my hon. Friend aware that Essex fishermen are fed up with being allowed to catch only tiddlers while the rest of Europe is allowed to catch whoppers? Will he kindly bring their plight to the attention of the next Fisheries Council, so that the imbalance can be addressed and their quota of Dover sole increased?
    Mr. Baldry: I am well aware of the problems facing smaller vessels, and I am considering constructively what steps might be taken to ease their difficulties. My hon. Friend initiated an Adjournment debate on the subject yesterday morning, and I said then that I was willing to go and talk to the Essex fishermen at Leigh-on-Sea and
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    to consider more carefully what we might do to help further the non-sector fishing industry of the Thames estuary.

    Common Fisheries Policy
    Mr. Austin Mitchell: To ask the Minister of Agriculture, Fisheries and Food by what percentage the British fishing fleet is over its common fisheries policy multi-annual guidance targets. [21608]
    Mr. Baldry: The UK's multi-annual guidance programme targets consist of separate tonnage and power figures for each of 10 fleet segments. They are due to be met by 31 December 1996. At 31 December 1994, the nephrops and distant water targets had been met. All other segments were short of target by varying degrees. Figures for the end of 1995 are not yet available.
    Mr. Mitchell: I should have hoped—and expected—that the Minister would take the opportunity offered by the first fishing questions for ages to ask consumers who do not want to eat beef to eat fish, because it is better for them. On the substance of his answer, is it not ludicrous that the United Kingdom—which provides two thirds of the waters in this so-called common market pool and more than three quarters of stocks—is now being asked to make the biggest reductions in its fishing fleet, particularly when a fifth of that fleet is owned by Europeans? Commissioner Bonino said that she will take quota hoppers into account when deciding reductions. Why does the Minister not meet her and ask her to live up to that promise?
    Mr. Baldry: The hon. Gentleman needs to sort out some of his points—some of them are good and some are awfully had. We are not being asked to make any greater reduction in our fishing effort than any other member state. If we fish against national quotas, of course it is crazy that members of other EU states can catch fish against our quota. For that reason, we have made it perfectly clear that, if appropriate, we will seek treaty changes at the intergovernmental conference to deal with the issue of quota hoppers. Of course I discussed that with the European Commissioner—she was in the UK the other day. I think that she fully understands our opposition, and our determination to deal with quota hoppers—which is what we are determined to do. I very much hope that, in the not too distant future, the Anglo-Dutch fleet, which is sailing around the North sea, will disappear.
    Mr. Nicholas Winterton: My hon. Friend is aware that Europe is taking emergency action to keep out our beef. Why cannot we take emergency action to keep the pillaging fishermen of Spain and elsewhere out of our waters on the grounds of an emergency in employment and conserving fishing stocks'? What is good for the goose should be good for the gander.
    Mr. Baldry: That is good, robust stuff, Madam Speaker. It is important to remember in all this that the House and the country will always comply with the rule of law. We will always base our decisions on law. We will, moreover, seek to base our decisions on best

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    science. It is a matter of great disappointment to all hon. Members that our European colleagues have shown this week that they do not follow those policies.

    Managed Access to the Countryside
    Mr. Butler: To ask the Minister of Agriculture, Fisheries and Food what steps the Government have taken to promote managed access to the countryside. [21609]
    Mr. Boswell: The Ministry offers a range of incentives to encourage farmers to provide increased public access.
    Mr. Butler: Does my hon. Friend accept that farmers in my constituency and elsewhere welcome managed access to the countryside? What they do not welcome, however, is the hysterical approach of the right to rampage being put forward by the Labour party, which would be a licence for criminals, burglars and people who want to commit damage to go into the countryside without let or hindrance. Does my hon. Friend recall that the previous Labour policy on this subject, in 1990, was launched under the title "Out in the Country"? Does he think that this policy could more accurately be described as out to lunch?
    Mr. Boswell: I have considerable sympathy with the points made by my hon. Friend. There has been wise advice on the subject from some of the Opposition's noble Friends in another place—including Baroness Mallalieu, who explained that a law would be unenforceable without the consent of farmers and landowners. As my hon. Friend implied, the policy would also impose very severe insurance, administrative and general hassle costs for the farming community. It could not proceed without consent, it is entirely the wrong way round and we will have no part of it.
    Mr. Foulkes: I am surprised that the hon. Member for Milton Keynes, North-East (Mr. Butler) did not blame my hon. Friend the Member for Peckham (Ms Harman) for pillaging the countryside. Has the Minister seen the representations made by the Ramblers Association following the decision announced yesterday—
    Mr. Jacques Arnold: She has done enough damage already.
    Mr. Foulkes: I know that the hon. Member for Gravesham (Mr. Arnold) is suffering from mad cow disease.
    After yesterday's decision by the Secretary of State for Scotland on the Forestry Commission's holdings, the Ramblers Association made representations to the effect that such a policy will discourage access to the forest and is, in fact, privatisation by the back door.
    Will the Minister talk to his right hon. Friend and ask him to rethink his plans for the forestry?
    Mr. Boswell: We would be happy to shift our attack from the hon. Member for Peckham (Ms Harman), who has perhaps already taken sufficient punishment, to the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes). I will, of course, be delighted at any time to speak to my right hon. Friend the Secretary of State for
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    Scotland on forestry matters, as I do frequently. I would have to tell him that the basis of any of our forestry disposals programme is to provide properly for public access. Woods that are not widely used by the public are one category, but we would not sell woods or forests that are widely used by the public without making or offering adequate provision for access, which we regard as important.

    Regional Speciality Food
    Mr. Bellingham: To ask the Minister of Agriculture, Fisheries and Food what action his Department has taken to promote regional speciality food. [21610]
    Mrs. Browning: In the past few months, two regional speciality food and drink groups have been set up with the help of Government financial assistance. Those groups have joined three other regional and several smaller groups to raise the profile of this important sector of the food industry.
    Mr. Bellingham: Is the Minister aware that, although Norfolk is predominantly an arable county, one particular regional speciality is its excellent beef? Is she aware that Norfolk farmers are concerned because they do not want their beef businesses destroyed by a combination of press hysteria and Opposition Members who are more concerned about scoring political points than about helping those businesses? How long does it take for a post-mortem BSE test to be carried out on a slaughtered bullock or cow?
    Mrs. Browning: My hon. Friend rightly draws attention to the many beef herds around the country that fall into the speciality category and are of particularly high quality. I know that Norfolk has its share of such herds.
    As for how long it takes to check a slide from the brain of a cow infected with BSE, that is not a process that can be conducted at the abattoir—the point that my hon. Friend may have had in mind. The brain has to be subject to the normal process—which takes considerable time—of being put on wax, after which a thin slide is taken for examination specifically under the microscope. I can assure my hon. Friend, however, that brains are subject to such examination. My hon. Friend may believe that that test can be conducted at the slaughterhouse, but I am afraid that the methods available to us at the moment prevent an immediate test being conducted quickly.
    Mr. John D. Taylor: As the most important regional speciality food in Northern Ireland is obviously Ulster beef, both in terms of the employment that it provides and the value that it adds to the economy of Northern Ireland, and given the damage done to the Ulster beef industry by decisions taken in Europe, will the Minister not forget that there are other important export markets for Ulster beef outside Europe? As a matter of urgency, will she spearhead a new export drive in those other countries to promote Ulster beef?
    Mrs. Browning: The right hon. Gentleman rightly draws attention to the importance of Ulster beef. Although countries outside the European Community have been caught by the worldwide recommendation, the right hon.

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    Gentleman may like to know that I am making scientists available from the Ministry to speak to representatives from other countries outside the EC who have asked to come to hear the science from us, and to hear about how it has affected the trade. I am receptive, as a Minister and on behalf of the Ministry, to those countries which wish to do that. We shall enable that to happen, and we are happy to talk to attaches and ambassadors of specific countries.
    Mr. David Porter: Does my hon. Friend appreciate that another regional speciality food is North sea cod, plaice and sole? Because of the workings of the common fisheries policy, however, there is a great danger that we shall soon not be able to catch any of those off England. Will she take that message to the IGC when she considers the reform of the common fisheries policies?
    Mrs. Browning: My hon. Friend the Minister of State has outlined to the House the work that he is doing with the industry to ensure that we get a sensible common fisheries policy, which affects his constituents and many other people around the country.
    Mr. Morley: Does the Minister agree that many regional beef herds—such as Ulster beef, Scottish beef and herds from other areas—are high-quality herds with no history of BSE? Will she support some of the quality-assured schemes run by producers, and give support to those regional beef herds? Will she give some thought to the slaughter and food-processing industries where many thousands of jobs are now at risk because of the way in which the Government have handled the issue, and for no other reason?
    Mrs. Browning: When the hon. Gentleman started his question, I thought that he was going to say something of profound interest to the industry and was going to recognise the difficulties that it faces. I certainly agree that some herds, kept by specialist producers, are free of BSE. Those herds are very often raised on grass, and are not subject to the cattle feed problems that we are talking about. I can assure him that I am aware of his point and will do my best to take it into account. How disappointing it is that yet another Labour agriculture spokesman, pretending to seek a justifiable solution for a matter of grave importance throughout the country, cannot resist the temptation to add his fivepen'orth of party politicking. It is a disgrace.
    Mr. Key: Will my hon. Friend take another look at the future of Bath chaps, which are under sentence of death this week? Will she go back to SEAC and ask whether it really meant the masseter and temporal muscles to be classified as specified offal, because that will bring to an end a large industry and could result in up to 40 works closing?
    Mrs. Browning: I am well aware of my hon. Friend's concern for the industry in his constituency that is producing Bath chaps. The recommendation from SEAC last week was very clear, and I am sorry that I cannot give him any comforting words. SEAC has recommended that the head should be removed, and that the part of the head that may be used in the food chain is the tongue. The part of the head to which my hon. Friend referred has
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    been specifically identified by SEAC as a part not to be put into the human food chain. While I sympathise with, and have every concern for, my hon. Friend's dilemma, it would be quite wrong for the Government to challenge the scientific advice that we have accepted at this Dispatch Box.

    Farm Animal Welfare
    Mr. Mullin: To ask the Minister of Agriculture, Fisheries and Food what recent discussions he has had with his EC colleagues regarding the welfare of farm animals; and if he will make a statement. [21612]
    Mrs. Browning: I refer the hon. Member to the answer my right hon. and learned Friend gave a few moments ago to the hon. Member for Romford (Sir M. Neubert).
    Mr. Mullin: Is the Minister aware that many people of all political persuasions will welcome the collapse in the odious trade in live exports that has resulted from the present crisis? Is she further aware that many of us gave up eating meat some years ago—not for health reasons, but because we were unable to justify the appalling cruelty that factory farmers inflicted upon farm animals? She can restore the confidence of many of us only by persuading the EC to amend the treaty so that live animals can be treated as sentient beings and not as agricultural products.
    Mrs. Browning: My right hon. and learned Friend explained to the House today that the addition of a protocol would create a legally binding obligation, whereas amending the treaty itself would not necessarily meet the objective. With regard to the hon. Gentleman's first remarks, he is free to take whatever decisions he likes about what he eats, and we all value the fact that he is able to do so. In time, however, he may well feel that his initial remarks were ill founded. There is a meat trade, and it is important that the highest standards apply—we have led the way on this—for animals reared in, and transported from, this country. We have pioneered the way in which those standards can be implemented across Europe, and that is the answer. We cannot just focus on what we do here, as what happens over the water is equally important in terms of animal welfare.
    Mr. Gallie: Is my hon. Friend aware that today McDonald's is importing foreign beef products? Is she also aware that health observation in other countries throughout Europe is perhaps not so stringent as ours and that animal welfare considerations have been shown not to be of such great concern? Does she feel that McDonald's has made a great error of judgment?
    Mrs. Browning: We shall work hard to encourage McDonald's to lift its decision on British beef as quickly as possible, because that will surely give confidence to the beef market both at home and abroad. We have no intention of allowing beef from other countries to undermine our marketplace here. We are studying imports of beef carefully to see that we can be absolutely sure that they comply with the sort of assurances on British beef that we give the population of this country.

  PRIME MINISTER

    Engagements
    Sir Michael Neubert: To ask the Prime Minister if he will list his official engagements for Thursday 28 March. [21631]
    The Prime Minister (Mr. John Major): This morning, I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Sir Michael Neubert: Is not the wide welcome for the Government's endorsement of Sir Ron Dearing's proposals for the education of 16 to 19-year-olds thoroughly deserved, as they bring together academic study with work-related training and recognise young people's differing skills and aptitudes for reaching their full potential? Is not that belief in diversity and choice the hallmark of Conservative policy and a striking contrast to anything else on offer?
    The Prime Minister: My hon. Friend is right about the desirability of choice and diversity being the key to raising standards in schools. I am sure that that is right. My right hon. Friend the Secretary of State for Education and Employment will set out more proposals this afternoon to achieve precisely that. That is what we want for all children—our children and everyone else's as well.
    Mr. Blair: Does the Prime Minister agree that, to restore confidence in British beef, we should recognise the mistakes of the past and that contaminated meat did pass into the food chain, but that, for the future, we should take all measures that are necessary to make negligible, not just extremely small, any chance—[Interruption.]
    Madam Speaker: Order. This is disgraceful. The House will come to order.
    Mr. Blair: Thank you, Madam Speaker.
    For the future, we should take whatever measures are necessary to make negligible—not just extremely small—the chance of any specified bovine offal going into any part of the food chain. What are the measures that the Prime Minister is proposing following the Cabinet meeting this morning and will they include the measures proposed by shadow Ministers, which have already won wide-ranging support throughout the industry?
    The Prime Minister: The right hon. Gentleman is right about the need to take all the necessary public health measures. The reality is that we have always taken the action that was seen to be necessary and the advice that has been offered. In 1989, we took action that went beyond the advice that we had received. I have had an opportunity to look at the proposals that the Opposition made this morning. They are a mixture of motherhood and action that is already being taken, and they largely miss many of the matters that need to be dealt with. [AN HON. MEMBER: "What is wrong with them?"]
    If the hon. Lady would like me to run through the eight points and explain why they are irrelevant, I should be happy to do so. I will find them. Here they are.
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    The Opposition call for proper enforcement of controls in slaughterhouses, yet they opposed the setting up of the Meat Hygiene Service, which was designed to ensure that they were enforced. They call for a random test of the brains of cattle. That is completely irrelevant, as we have stopped all brain products that could possibly be infected from entering the food chain. They suggest that products are labelled with ingredients; that is already happening. SEAC has already looked at the safety of mechanically recovered meat and we have already taken steps to ensure its safety.
    As for the plans for a quality assurance scheme, of course we wish to ensure the quality of all beef, but there would be no question of labelling some beef as safe and allowing the sale of unsafe beef, which is what they say would mean. Their plan to ban specified bovine offal in cattle under six months overlooks the fact that SEAC specifically considered this proposal and concluded that it was unnecessary, not least because there has never been a single incidence of BSE in cattle that young. The plan for a separate—[Interruption.] The Opposition asked me what was wrong with their plans.
    Madam Speaker: Order. The right hon. Gentleman was asked a question by an hon. Member from a sedentary position. Members must learn to listen and not bawl out from sedentary positions.
    The Prime Minister: The plan for a separate food agency would mean that matters such as this would no longer be represented round the Cabinet table but would be represented in an agency. The chief medical officer already has the support that he has asked for to carry out his duties. The reality is that our examination is much more fundamental than this public relations nonsense from the Labour party. It is considering votes; we are considering the industry and the national interest.
    Mr. Blair: I do not think that we have heard anything quite so pathetic as that. Let me take two of those measures—one, random testing, was proposed by the right hon. Gentleman's own committee. As for the policy in relation to abattoirs, his own scientists have said that the regulations have to be enforced. Will he confirm that, as late as last year, almost half the slaughterhouses were not up to scratch and that, although it is true that there are far fewer today, there has not yet been one completed prosecution? Is that not right?
    Will the Prime Minister please, for once, stop shirking responsibility and instead take it? In particular, will he understand that, unless he can agree proposals now with the food industry, the retailers and the consumer organisations so that we present a united front, we shall never have the Government back in control of events rather than being controlled by them?
    The Prime Minister: What is pathetic is this document. What is also pathetic is this wriggling change of policy after the hon. Member for Peckham (Ms Harman) and the right hon. Gentleman did everything that they could to extract maximum political advantage, at the cost, potentially, of jobs, and of the national interest, in the beef industry. On his remarks about controls in slaughterhouses, the Meat Hygiene Service has an officer—in some cases more than one officer—in each and every slaughterhouse, and every single carcass is

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    inspected by those hygiene officers—officers whom Opposition Members voted against when we brought the proposals before the House.
    Mr. Harris: Will my right hon. Friend assure his farmers—my farmers and farmers up and down the country—that the Government will do all that they can to avert the disaster facing British industry? In short, will the Government bring forward proposals for a selective slaughter policy to take out of the food chain the meat from cows that will be culled in any case?
    The Prime Minister: What needs to be done to ensure confidence both for the beef industry and for allied industries, in the interests of the farmers as well as public health, and the substantial range of matters that must be examined, are all under consideration at the moment. We must address specifically the question of market confidence: that means convincing our European partners and the beef outlets that beef is safe. The next step in that process will be an announcement by my right hon. and learned Friend the Minister of Agriculture, Fisheries and Food later this afternoon.
    However, in the interests of the industry as a whole and of public health, it is important to deal with the matters comprehensively if we are to meet the objective of restoring confidence. Work and discussion on all the matters is going ahead—even as we meet this afternoon—in this country and in Europe. We shall carry out those discussions as speedily as possible. As soon as we are able, we shall bring comprehensive proposals before the House, but it is not in the interests of the industry for us to dribble them out piecemeal: we shall deal with the whole issue because that is the only way to restore the confidence so badly damaged so unnecessarily.
    Mr. Ashdown: The Prime Minister knows very well just how many jobs and how many businesses are now at risk in what is the worst crisis to hit rural Britain for three decades or more. He knows that every delay will add to that list. I therefore assure him that, if he brings forward an urgent plan of action, designed to restore public confidence and to make the British herd BSE-free as soon as possible, based on culling and other measures, we shall support him. We shall also support every action that is designed to persuade our European partners that it is not a problem just for Britain, but a Europewide problem that requires a Europewide solution.
    The Prime Minister: I entirely agree with the right hon. Gentleman's latter point: it is a Europewide problem. I shall discuss the matter with our European partners in Turin tomorrow and my right hon. Friends will also discuss the matter with their European counterparts. The right hon. Gentleman is entirely right: 650,000 people are employed in the industry, which generates about £5 billion each year. That is why we must ensure that the proposal we bring forward is comprehensive and will work. I am grateful to the right hon. Gentleman for his offer of support as we do so.
    Mr. Lamont: Is the Prime Minister aware that there will be total support for his comments yesterday about the European Union ban on worldwide exports of British beef which he said was unjustifiable, unjust and should be reversed? Does the Prime Minister recognise that we do
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    not wish to be bribed, by accepting the return of some of our own money, into agreeing to something that is fundamentally wrong? Is there not a case for, if not leaving the British seat vacant at the IGC tomorrow, at least saying that there will be no progress until the ruling has been overturned?
    The Prime Minister: On the basis of the scientific advice that we have received, our partners must know that the ban on British beef is totally without justification. My right hon. and learned Friend the Minister of Agriculture, Fisheries and Food is having urgent discussions to outline the measures that we are taking to ensure safety. I assure my right hon. Friend that I shall reinforce that point vigorously in Turin tomorrow. It is essential that decisions of that sort are taken by member states on the basis of rational judgments and of science, and not on any other basis—as I believe they were on this occasion. I shall certainly make our feelings clear tomorrow.
    Mr. Illsley: To ask the Prime Minister if he will list his official engagements for Thursday 28 March. [21632]
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave a few moments ago.
    Mr. Illsley: What message does the Prime Minister have for his so-called Euro-sceptic friends now that he is not going to Turin to talk tough to the intergovernmental conference but is going cap in hand to beg for compensation for the measures that he knows he must now take to resurrect the British beef industry, which has suffered because of his Government's total incompetence?
    The Prime Minister: I do not think that the hon. Gentleman can have heard what I said a moment or so ago; if he did hear it, he patently did not understand it.
    We have set out our position on the intergovernmental conference, and I shall reinforce that, precisely as we have previously informed the House, in the discussions at the IGC tomorrow, but with one addition. I shall make it clear that the recent ruling on the working time directive is wholly unjustified, that we do not accept it and that we shall be seeking in the intergovernmental conference to ensure that the Commission does not misuse article 118A in future.
    Mr. Simon Coombs: To ask the Prime Minister if he will list his official engagements for Thursday 28 March. [21633]
    The Prime Minister: I refer my hon. Friend to the reply I gave some moments ago.
    Mr. Coombs: When my right hon. Friend goes to Turin, will he take the opportunity to impress on his fellow European leaders the absolute need to reduce business costs? Will he also ensure that there is no way in which the European social chapter—the European tax on jobs—is smuggled into this country by the back door or foisted on the British people by the back door despite our opt-out?
    The Prime Minister: As I said a moment ago, and am happy to reaffirm, I am not prepared to see the social chapter opt-out, negotiated and agreed in good faith at Maastricht with our colleagues, undermined by an improper use of other treaty heads, and I shall demand changes in the intergovernmental conference to ensure that that cannot happen. [HON. MEMBERS: "Oh!"]
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    The Labour party may wish to sign up to policies that will make people unemployed—Labour Members are obviously reckless of employment, as they showed earlier this week with their statements on health matters—but we care about putting people back into jobs and we shall not accept any measures that prevent jobs being created.

Business of the House
3.31 pm
Mrs. Ann Taylor: May I ask the Leader of the House for details of future business?
The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): The business for next week will be as follows.
MONDAY 1 APRIL—Opposition Day (9th allotted day). There will be a debate on the council tax on an Opposition motion.
TUESDAY 2 APRIL—Consideration in Committee of the Family Law Bill [Lords], followed by consideration of any Lords amendments which may be received to the Education (Student Loans) Bill.
WEDNESDAY 3 APRIL—Until 2 o'clock, there will be debates on the motion for the Adjournment of the House, including the three-hour pre-recess debate.
In the afternoon, remaining stages of the London Regional Transport Bill, followed by motions on the Social Security (Minimum Contributions to Appropriate Personal Pension Schemes) Order, the Social Security (Reduced Rates of Class 1 Contributions) (Salary-related Contracted-out Schemes) Order and the Social Security (Reduced Rates of Class 1 Contributions and Rebates) (Money Purchase Contracted-out Schemes) Order.
That will be followed by motions on the Special Grant Report (No. 17) and the Special Grant Report (Wales).
The House will also wish to know that European Standing Committee B will meet at 10.30 am on Wednesday 3 April to consider European Community document No. 9325/95 relating to Consumer Protection: Unit Pricing.
The provisional business for the first week back after the Easter Adjournment will be as follows:
TUESDAY 16 APRIL—Second Reading of the Broadcasting Bill [Lords].
WEDNESDAY 17 APRIL—Until 2 o'clock, there will be debates on the motion for the Adjournment of the House.
In the afternoon, the 10th Opposition Day, on an Opposition motion of which the subject will be announced later.
THURSDAY 18 APRIL—Remaining stages of the Channel Tunnel Rail Link Bill.
Remaining stages of the National Health Service (Residual Liabilities) Bill.
Motion on the Deregulation and Contracting Out (Northern Ireland) Order.
FRIDAY 19 APRIL—Private Members' Bills.
[Wednesday 3 April: European Standing Committee B—European Community document: 9325/95, Consumer protection unit pricing. Relevant European Legislation Reports: HC 70-xxv (1994–95), HC 51-iii (1995–96) and HC 51-xi (1995–96).]
Mrs. Taylor: I thank the Leader of the House for that statement, especially the early notification of the business in the first week after the Easter recess, but what has happened to the much-trailed statement on sentencing
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policy that many people were expecting by now, especially in view of all the remarks by the Home Secretary?
Secondly, in view of the Government's defeat in the Committee considering the Community Care (Direct Payments) Bill, will the Leader of the House tell us what the Government's response will be? Will he give us an assurance that the House will have an early indication as to when the Report stage will take place? That will be a test for Ministers, so that they can demonstrate whether they are responsive to the needs of older people and people with learning difficulties, by standing by the decision taken in Committee rather than trying to reverse it on the Floor after the Bill has come back to the House.
In view of yesterday's report of the Select Committee on the Parliamentary Commissioner for Administration, supporting a freedom of information Act, and in view of the Government's claims about open government, will the Leader of the House provide Government time, after the Easter recess, for a debate on that subject, or will we have to wait until a Labour Government provide not only the time for a debate but legislation on the matter?
The Leader of the House will be aware that the Public Accounts Committee has, on various occasions in recent years, warned about the ill-thought-out and ill-prepared computer schemes in a number of Government Departments. Surely we should have a debate on the matter in the near future. If the report in today's The Daily Telegraph is well founded—that the proposed new Department of Social Security computer scheme will cost an extra £750 million, on top of an existing bill of £2.6 billion—clearly the Government have failed to respond to the Public Accounts Committee's criticisms. Expensive blunders of that kind keep occurring, with the taxpayer footing the bill.
Finally, I hope that it goes without saying that the Leader of the House will guarantee that, if there is any statement to be made, any change of policy or any significant future development on the bovine spongiform encephalopathy front, the House will he kept fully informed.
Mr. Newton: I thank the hon. Lady for her opening kind words. On sentencing policy, my right hon. and learned Friend the Home Secretary anticipates making a statement to the House before the recess. On the Community Care (Direct Payments) Bill, I have no doubt that my right hon. and hon. Friends will give appropriate consideration to any proceedings in Committee. I shall communicate with the House about the Report stage as and when appropriate.
The hon. Lady's next two questions concerned reports from Select Committees, including the Public Accounts Committee. At the moment, I have no plans to provide time for debate in Government time, but there are well understood opportunities for debates on Select Committee reports—which, no doubt, the Chairman of the Liaison Committee and others will consider. For my part, the Government will respond to Select Committee reports in the appropriate way and at the appropriate time.

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Finally, I merely observe that the Government have already arranged—in the course of barely a week—a total of four statements and one debate in relation to BSE. I think that that is an assurance of our good faith in keeping in touch with the House on the matter.
Mrs. Jacqui Lait: Will my right hon. Friend have a look at the timetable and provide some time for a debate on the Audit Commission's report on local authority performances, so that we have an opportunity to examine those performances, particularly in places such as East Sussex, which consistently performs on the wrong side of average?
Mr. Newton: It occurs to me that the debate on the council tax—which is next Monday's business; albeit not Government business—might provide an opportunity for my hon. Friend to make the point that she wishes.
Mr. A. J. Beith: Does the Leader of the House realise that the House has not yet debated the Europol convention on European police co-operation, which has been signed by this country, but has not yet been ratified? Does he recognise that the important work that is being carried out by the police unit in The Hague against international criminals and drug traffickers will be hampered as long as ratification is delayed by the Government's concerns about the European Court of Justice? I believe that that matter ought to be debated.
Mr. Newton: I take note of the right hon. Gentleman's request.
Mr. Bob Dunn: Will the Leader of the House undertake to provide an urgent and early debate on local government anarchy in central London, given that Lambeth council is now owed more than £100 million in uncollected council taxes, thus proving that socialism in action is not a soundbite, not a vision, but a nightmare?
Mr. Newton: I express the hope, Madam Speaker, that my hon. Friend will catch your eye on Monday to elaborate his views on the matter.
Mr. Tam Dalyell: Does the Leader of the House know that the report of the Intelligence and Security Committee was first promised for 3.30 this afternoon? Now it is not to be issued until 4 o'clock. Does that mean that it is worth reading? If it is worth reading, is it not worth debating, perhaps in the week that we come back? If he cannot promise that, how about a debate on this morning's report by the Health and Safety Executive on the parlous state of the Forth bridge in my constituency?
Mr. Newton: I note the hon. Gentleman's perfectly proper—or perfectly understandable—constituency point. On his first point, I cannot promise a debate in the first week back, having announced the business for that week. Although I always consider requests, I would rather do so when the report has actually been published.
Mr. John Butcher: May we have a debate shortly to unravel a mystery? Informed opinion in the manufacturing sector is telling us clearly that British engineers now have a spectacular opportunity to wipe the floor with their competitors across Europe, but the public at large do not seem aware of that opportunity. The signs of success are now remorseless. May we have a debate to help to preserve the competitiveness of British industry in the teeth of policies that may be introduced to destroy that competitiveness and load employment costs on the backs of our employers?
Mr. Newton: My hon. Friend makes an important point that is relevant to many debates, and I hope that he will have opportunities to raise the matter again. I take the opportunity to congratulate his part of the country on securing the new Jaguar X200 project.
Mr. Ken Livingstone: Will the Minister tell the House that he does not intend the six EC VAT directives to be carried by the House simply by a Statutory Instrument? From 1 May, those directives will impose VAT on admission charges to all major zoos in Britain. That will damage attendance and reduce the work that our zoos do for endangered species. Given that, from Bristol to Edinburgh to Belfast, hon. Members have constituency interests, may we have an undertaking that before VAT is imposed on zoo admission charges on 1 May, there will be a full debate, in which all hon. Members who have a constituency interest can take part?
Mr. Newton: I note the hon. Gentleman's representations, but I have no plans for departing from normal procedures for dealing with such matters.
Mr. Edward Leigh: With regard to the Family Law Bill, to be discussed next Tuesday, although I thank my right hon. Friends for helping us to draft amendments, it has been a rush. May I protest at the speed at which the Committee of the whole House is sitting—just a week after considering the Bill on Second Reading? On previous occasions—notably the reform of the law on homosexuality—there was a gap of some months. Similarly, many weeks passed after the Bill was considered in the House of Lords, so that constituents could voice their concerns to Members of Parliament and there could be a proper public debate on the most important piece of social legislation for a decade. Is it necessary to have the Committee of the whole House quite so quickly after Second Reading?
Mr. Newton: My hon. Friend, to whom I am grateful for his kind remarks about the assistance that he has received from my right hon. and hon. Friends, will be aware that procedures in another place are somewhat different from those here, not least in the handling of matters in Committee. In my view at least, it is sensible that certain issues should be discussed by the whole House before the rest of the Bill receives more detailed and minute consideration in Committee. The big issues should be discussed and settled first. Although the Bill received Second Reading only at the beginning of this week, there has been a huge amount of time to consider the Bill, which has been around and well known to everybody for many months.
Mr. Doug Hoyle: Has the Leader of the House noted the 1,700 redundancies announced by United Utilities? They follow the 800 previously announced, making 2,500 in all. That, coupled with the sale of three companies, including North Western Electricity's shops, will mean a further 4,400 jobs being put at risk. Does he not realise that that is partly due to the Government's failure to refer the takeover of public utilities to the Monopolies and Mergers Commission? Will the right hon. Gentleman consult the President of the Board of Trade, to see whether we can have an early debate on this company's asset-stripping methods?
Mr. Newton: I shall ensure that the hon. Gentleman's remarks are drawn to the attention of my right hon. Friend the President of the Board of Trade, which is what I imagine he would like me to do.
Mr. John Whittingdale: Will my right hon. Friend find time to debate an issue of great concern to my constituents and to his—the decision of Essex county council to withdraw its grant from parish councils for civic amenity sites? Is he aware that that decision is likely to lead to the closure of the Asheldham site in my constituency? As a consequence, there will be fly-tipping all over the Dengie peninsula.
Mr. Newton: Like my hon. Friend, whose constituency borders mine, I certainly regret any action that would tend to diminish the success of recycling in many parts of Essex and bring about the consequences to which he refers.
Rev. Martin Smyth: I, too, am concerned about the haste with which the Family Law Bill is to be debated next Tuesday. As the right hon. Gentleman has announced the business for the week after Easter, can he say when he hopes to announce a debate on the Northern Ireland election law Bill, so that we can debate it in good time for the elections?
Does the right hon. Gentleman share the concern of many in Northern Ireland at the fact that directions have been given to a large minority party there not to contest the election? What sort of signal for democracy does that send out?
Mr. Newton: The Bill is still in preparation, so it would be rash to schedule a debate on legislation that is not yet ready to put before the House. We are trying to get it ready as soon as possible; when it is ready, I shall arrange for a debate as soon as possible thereafter.
Mr. Richard Tracey: Will my right hon. Friend give us an early opportunity to debate the pride of London? In such a debate, we could discuss the great success of the city as the business centre of Europe, and the enormous progress made in London's infrastructure. None of that would have been possible, I suspect, if, 10 years ago next week, we had not abolished the Greater London council.
Mr. Newton: We do of course from time to time look for time for a debate on London. In view of my hon. Friend's trenchant remarks. I shall of course start to look for an opportunity when he might expand on them.
Mrs. Gwyneth Dunwoody: Will the Leader of the House undertake to look carefully
1172
at the progress of the Noise Bill, which was expected to last for only two sittings but which has suddenly sprouted large numbers of amendments tabled by Conservative Members? Will he give an undertaking that that is not a case of the time taken to discuss a Bill being extended so as to hold up the Public Interest Disclosure Bill promoted by my hon. Friend the Member for Islwyn (Mr. Touhig), which is next in the queue? That would he greatly resented.
Mr. Newton: I am not familiar with every detail of the weekly proceedings in the Committee dealing with private Members' Bills, but I have no doubt that the Noise Bill, which is an important one, merits proper probing and discussion—and, where necessary, amendment.
Mr. Jacques Arnold: May we have a debate on the private finance initiative? During such a debate, we could raise the interesting case of the £100 million hospital project at Darenth Park in north-west Kent, which will be of immense value to people living in that part of the world. We could also highlight the fact that four major consortia have bid to participate and build the hospital, and that two of them have been invited to go forward to tender stage.
We could also draw the attention of the House to the deliberate undermining of the hospital project by the hon. Member for Peckham (Ms Harman), who is doing so merely to score party political points, thereby endangering the hospital project, but simultaneously refusing to pledge that any future mythical Labour Government would provide the £100 million to build the hospital.
Mr. Newton: I am glad to know that my hon. Friend's constituency looks like benefiting from the gathering success of the private finance initiative. I am sure that the whole House would share his regret if playing politics inhibited the project that he mentions.
Mr. Dafydd Wigley: May I press the Leader of the House further on the beef crisis? He will be aware of the devastation facing many small farmers who have spent a lifetime building up their herds. They need action now, in looking not so much at who is to blame, as at what is to be done to restore confidence. Can he assure us that, if there is not a comprehensive statement in today's debate, there will be an opportunity for one tomorrow morning? In particular, will he make sure that we do not go away for the Easter recess without the farming industry knowing definitely what is to happen to restore confidence, because the industry could not understand it if we allowed a couple of weeks to go by during which time countless companies might go to the wall?
Mr. Newton: I very much welcome the tone of the hon. Gentleman's opening remarks. He will have heard what my right hon. Friend the Prime Minister said at Prime Minister's questions, about the way in which the matter is being addressed, to seek to meet those very concerns. He will also have heard what I said to the hon. Member for Dewsbury (Mrs. Taylor) about the Government's intention to ensure that the House is kept fully and properly informed.
Mr. John Wilkinson: My right hon. Friend previously precluded the possibility of regular

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ministerial statements to the House on the progress of the intergovernmental conference, which begins tomorrow. Could he instead allow, during the two weeks of business that lie ahead, an early debate on early-day motion 570, on the European Court compensation ruling and the common fisheries policy?
[That this House deplores the decision of the European Court which overrules, with retrospective effect and at great cost to the taxpayer, the Government's legislation introduced to prevent British fish quotas being caught by Spanish and other foreign owners of British registered vessels; and believes that this judgement confirms the need for the United Kingdom to give notice at the forthcoming Intergovernmental Conference of its intention to withdraw from the Common Fisheries Policy and of its determination to re-establish the supremacy of British law.]
The early-day motion was tabled by my hon. Friends the Members for Ludlow (Mr. Gill) and for Southend, East (Sir T. Taylor) and myself, and signed by 14 other hon. Members, and is crucial to the IGC, relating as it does to British withdrawal from the common fisheries policy and the restoration of the supremacy of British law.
Mr. Newton: My hon. Friend will be aware of what has been said by my right hon. Friends on that matter, in relation to the IGC. I shall not seek to add to or elaborate on that. I do not have my words from last week in front of me, but I do not recall that they were quite in the terms that my hon. Friend attributes to them—rather, it seems to me to be quite difficult to have a statement every time any kind of meeting takes place in connection with the IGC process.
Ms Ann Coffey: I would also like to urge the Leader of the House to consider having an urgent debate on the decision by United Utilities to cut 1,700 jobs. It is an extremely profitable company and it has been built on fixed prices that are paid by people in the region for electricity and water. It is not right for those companies to kick the people in the region in the face, by cutting their jobs and by creating job insecurity and uncertainty throughout the north-west.
Mr. Newton: I have already responded on that issue to the hon. Member for Warrington, North (Mr. Hoyle), and I shall include the hon. Lady's remarks in the information that I shall transmit to my right hon. Friend the President of the Board of Trade.
Mr. Harry Greenway: Could my right hon. Friend arrange an early debate on the crippling industrial rates that are being levied on riding establishments, which are very good sources of recreation for our people and which have to compete very unfairly with non-commercial riding establishments that are often paid for out of the public purse? At the same time, could we deal with the avaricious people who seek to turn this country's attention to eating horses rather than beef? We should put a stop to any such idea immediately.
Mr. Newton: I shall certainly draw the appropriate Minister's attention to my hon. Friend's remarks, and in particular to what he said about riding establishments.
Mr. Gerald Bermingham: Will the Leader of the House consider—notwithstanding last night's vote in which the Government scraped home by merely one, and the content of that debate—allowing time for a full debate on the environment and energy-saving measures? The Leader of the House may be aware that Pilkington in my constituency has announced 1,900 job losses worldwide. That company is greatly into energy conservation, and help in that field would help it, as well as many other companies. Is not it better to help the environment while at the same time helping the economy?
Mr. Newton: It is certainly the case that, over a considerable period, Her Majesty's Government have put much effort into advancing the cause of the environment generally and into energy conservation. Another private Member's Bill on the subject is around and that may, in due course, provide an opportunity for further debate on the Floor of the House.
Mr. John Marshall: May I congratulate my right hon. Friend on arranging the debate on the London Regional Transport Bill to coincide with the 10th anniversary of the demise of the Greater London council? In that debate, will it be in order to draw a distinction between the investment level then and the much higher investment level today? Will it also be in order to point out that the Northern line train project is the largest public-private finance initiative project and that it will transform conditions for many of my constituents, who from next year will travel in new trains, will see every station on the Northern line upgraded and will find that private finance has provided what the GLC failed to provide?
Mr. Newton: The question of order is of course for you, Madam Speaker, rather than for me, which you would certainly remind me of should I show signs of straying, but good points are always in order and I look forward to my hon. Friend making his good points in the debate on that transport matter.
Mr. Dennis Skinner: Before this Government are kicked out of office, shall we have a debate about the Government's record over the whole period since they came into power in 1979? Is it not an unfortunate coincidence that the end of 17 years of Thatcherism is characterised by mad cow disease?
Mr. Newton: From the perspective of one of the people who supported the position that led to the previous Government ending with the winter of discontent, the hon. Gentleman might be unwise to promote such a debate.
Mr. Anthony Coombs: My right hon. Friend will be aware of the Press Complaints Commission's welcome adjudication in favour of my hon. Friend the Member for Colne Valley (Mr. Riddick) and against The Sunday Times, but as The Sunday Times apparently sees fit completely to ignore the commission's recommendations in a most disgraceful way, may we have a debate on the way in which the press exercises self-regulation through the commission? Will that adjudication act as an adequate deterrent against the newspaper industry acting in that disgraceful way?
Mr. Newton: My hon. Friend will understand that, as Chairman of the Privileges Committee, which suggested

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that the PCC should revisit that matter, I have read the PCC chairman's recent letter to me with considerable interest. I cannot promise a debate, but I take careful note of my hon. Friend's remarks.
Mr. Tony Lloyd: If the Leader of the House intends to refer to his colleague the President of the Board of Trade the issue of United Utilities' decision to wipe out the livelihoods of another 1,700 people—on top of the 800 who have already gone—and the threat to a further 4,500 people, will he point out to him that the consequences in the north-west and in my constituency in particular will be catastrophic? Will he also point out that, almost inevitably, the public in the north-west will believe that the quality of service that they receive from a bad water company and electricity company will further deteriorate? If that is the case, surely the matter should be referred to the Monopolies and Mergers Commission, but should we not also have a debate on the results of privatisation and its deleterious effects not only on jobs, but on customer service?
Mr. Newton: I do not accept the general thrust of the hon. Gentleman's remarks about privatisation. When I consider the greatly improved performance of privatised industries, in comparison with what went before, I see no reason to accept those remarks, but I shall add his representations to those conveyed to my right hon. Friend the President of the Board of Trade.
Mr. Ian Bruce: May we have an urgent debate, ideally this afternoon, if not next week, about Members' access to information in the House? I thought that the information systems in the House were extremely good until I tried to find a copy of the draft report that was referred to on Monday by the hon. Member for Peckham (Ms Harman). The Library is not able to identify whether any such draft ever existed and cannot get me a copy, and the Ministry of Agriculture, Fisheries and Food cannot get me a copy either. I was therefore extremely grateful to the offices of the hon. Members for Darlington (Mr. Milburn) and for Peckham when they said that they would furnish me with a copy. Unfortunately, I have since received a telephone message from the office of the hon. Member for Darlington, saying, "Apologies. Cannot find the 1978 draft report." Not only is the information not available through the normal channels, but it would appear that it is being stolen from hon. Members' offices.
Mr. Newton: That is a very interesting story. I am not sure that I can address the question, not least because it would appear that the deficiency is not in the House's information system, but somebody else's.
Mr. Rhodri Morgan: Is the Leader of the House aware that among the countless broken promises of the Government is one made on 7 September 1992 by the Under-Secretary of State for Wales, the hon. Member for Cardiff, North (Mr. Jones), to set up a public inquiry into child sex and physical abuse in north Wales children's homes? There has been persistent questioning on the matter this week. We have waited a long time—since 1992—for a public inquiry because the criminal trials and proceedings clearly had to be completed before it could be set up.
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Now that they have, will the Government do what they promised and set up this long-overdue and urgently required public inquiry, under a judge, with powers to subpoena all those involved—the North Wales police, and people from the Welsh Office social services inspectorate and Clwyd and Gwynedd county council social services departments—to find out exactly what went wrong during that horror saga of 10 and 15 years ago in north Wales?
Mr. Newton: There may have been lurking somewhere in that a request for a debate, but it sounded to me like a request for an inquiry directed at my right hon. Friend the Secretary of State for Wales. I shall ensure that that request is transmitted to him.
Dr. Robert Spink: May we have an early debate specifically focused on the beef-processing industry, to ensure that it, as well as farmers, benefits from any confidence and compensation package that comes forward? The industry has laid off many people and is holding vast amounts of stock. One company in my constituency told me today that it was absolutely disgusted and very angry with the Labour party for playing politics with its jobs and business.
Mr. Newton: My hon. Friend makes some important points. Although, again, the matter would be for you, Madam Speaker, I find it hard to believe that raising such matters would not be in order in the debate that I have scheduled for later today.
Mr. D. N. Campbell-Savours: May I suggest to the Leader of the House that if we are to debate the matters raised by the hon. Member for South Dorset (Mr. Bruce), the hon. Gentleman would do well to contact the Chairman of the Select Committee on Agriculture? Perhaps he could ask officials, when the Committee next takes evidence from them, about the draft document to which the hon. Gentleman referred. I think that he will find that it exists.
Mr. Ian Bruce: I have not been able to get a copy.
Mr. Campbell-Savours: The hon. Gentleman should ask the Committee Chairman to secure access to it.
Mr. Newton: I could not detect a remark directed to me at all lurking in that. I shall not intervene further in the exchanges between my hon. Friend the Member for South Dorset (Mr. Bruce) and the hon. Member for Workington (Mr. Campbell-Savours).
Madam Speaker: The Lord President is not on his own.
Mr. Roy Thomason: In view of my right hon. Friend's earlier reply, he has clearly noted the success of the Jaguar X200 project, which will create and protect many thousands of jobs in the west midlands. Does he agree that an early debate on the car manufacturing industry generally would be appropriate, especially as it is leading British industry's export drive so successfully?
Mr. Newton: I certainly wish to join my hon. Friend in congratulating the industry and welcoming that project, as I have already done. I shall bear in mind his request for a debate.

Points of Order
4.3 pm
Mrs. Ann Taylor: On a point of order, Madam Speaker. I am glad that the Leader of the House is still in his place. May I raise the fact that the Intelligence and Security Committee report, which, as hon. Friend the Member for Linlithgow (Mr. Dalyell) pointed out, was due to be in the Vote Office at 3.30 pm, is apparently still not available, although we were told that it would be delayed only until 4 o'clock? That raises suspicion and causes difficulties.
Madam Speaker: I understand that it is now available; hon. Members seem already to have copies.
Mr. Robert G. Hughes: On a point of order, Madam Speaker. I have been sent a mass-produced letter from the hon. Member for Sherwood (Mr. Tipping), which is printed on House of Commons notepaper. I gave him notice that I intended to raise this point of order. The letter has been sent to his constituents in House of Commons envelopes and he has even put his political office address on the back. The cost of postage alone could be as much as £10,000 if the letter has been sent to every constituent. That is a flagrant abuse, and the hon. Gentleman has not even bothered to come into the Chamber. What can we do to stop this abuse by Members?
Madam Speaker: We stop it individually by insisting that, if an offence has been committed, the Member concerned has to pay. That happens in every case. If the hon. Gentleman, who obviously has the evidence, will let the Serjeant at Arms have it, he will interview the Member concerned and will find out precisely how much notepaper, postage and so on were used. If that usage is improper, the Member will be charged, as happens in every case that is raised.
Mr. Ian Bruce: On a point of order, Madam Speaker. I refer to the matter that I raised during questions. I know that it is your duty—a duty that you discharge well—to look after the reputation of hon. Members and of the House. You will recall that, during the emotionally charged statement on BSE, the Government were accused of being a deregulatory Government who had done away with a draft order that the Labour party had placed before the House in 1978.
I understand that the draft order had nothing to do with the inclusion of animal parts in cattle food or their exclusion from it, and I believe that that is why it is not
1178
being made available to me. Is there anything that you can do to enable me to do my job, as a Member of Parliament, of bringing up those matters and to protect the reputation of the hon. Member for Peckham (Ms Harman), who is clearly under a great deal of pressure from both sides of the House to come clean on the matter?
Madam Speaker: We are to have a debate on the matter and the hon. Gentleman may seek to catch my eye during it. Alternatively, when the hon. Member for Peckham (Ms Harman) is making her points, he may like to attempt to intervene—he has already given obvious notice of that intention—so that she can explain where the document originated and where he may obtain a copy of it. That may be the best way in which to proceed.
Mr. D. N. Campbell-Savours: Further to that point of order, Madam Speaker.
Madam Speaker: I will take no further points of order on the matter.
Mr. Campbell-Savours rose—
Madam Speaker: Order. We have had exchanges on the matter both during questions on next week's business, which were totally irrelevant, and we have had points of order that were not quite as irrelevant and with which I have dealt. I hope that the next point of order is relevant.
Mr. Chris Mullin: I hope so, Madam Speaker. Further to the point of order raised by my hon. Friend the shadow Leader of the House, the Intelligence and Security Committee report has now become available. Glancing through it, it is clear that paragraphs 10, 32, 33 and 35 are the ones that the Government are anxious we should not be able to discuss. Will you, Madam Speaker, make it clear to the Leader of the House that we deprecate the way in which the report has been withheld? Will you express to him the hope that we shall eventually be able to discuss the report and those paragraphs in particular?
Madam Speaker: The document has little to do with the Speaker of the House; it is made available in the Vote Office for Members. I am sure that the hon. Gentleman has made his point, which is hardly a point of order and is hardly a point for the Leader of the House, who happens to be on the Treasury Bench and who has no doubt heard it for all that.

Orders of the Day
  Finance Bill
  As amended (in the Committee and in the Standing Committee), further considered.
Clause 55
  TAXABLE DISPOSALS: SPECIAL PROVISIONS
  Amendment made: No. 12, in page 38, line 15, leave out from beginning to end of line 29.—[Mr. Waldegrave.]
Clause 60

  LANDFILL SITES
  Amendment proposed: No. 14, in page 40, line 36, leave out
  'granted under section 35 of the Environmental Protection Act 1990 (waste management licences)'
  and insert
  'which is a site licence for the purposes of Part II of the Environmental Protection Act 1990 (waste on land)'.—[Mr. Waldegrave.]
  Madam Speaker: With this it will be convenient to discuss Government amendments Nos. 15 to 18.
  4.8 pm
  Ms Dawn Primarolo: In their amendments, the Government have made minor changes to the definition of, first, landfill sites and, secondly, the landfill site operator. That was not raised in Committee, so I would be grateful if the Paymaster General will explain why it was necessary to change the definitions, and what the substantive difference is.
  The Paymaster General (Mr. David Heathcoat-Amory): The group of amendments is designed to ensure that there is no room for doubt as to what is and what is not a site for the purpose of the tax. They were tabled following further legal advice on the provision in the Bill as published.
  Amendment No. 14 relates to licences issued for sites in Great Britain before the Environmental Protection Act 1990 was enacted. We wish to bring in all licensed sites; hence the amendment. That is clearly in line with the purpose of the Bill, and I venture to say that it is therefore uncontroversial.
  Amendment No. 15 is designed to deal with a similar problem relating to Scottish local authority sites that operate under a resolution passed before the Environmental Protection Act was enacted. Although all Scottish local authority sites will shortly be licensed, we do not wish to create a loophole and resulting distortion for such a key area of the landfill tax provision. Our purpose in the amendment was to put that beyond doubt.
  Amendment agreed to.
  Amendments made: No. 15, in page 40, line 39, leave out 'passed'.
  No. 16, in page 41, line 4, leave out 'or'.
  No. 17, in page 41, line 7, at end insert
  'or
  (e) a licence under any provision for the time being having effect in Northern Ireland and corresponding to section 35 of the Environmental Protection Act 1990 (waste management licences) is in force in relation to the land and authorises disposals in or on the land.'.—[Dr. Liam Fox.]

Clause 61

  OPERATORS OF LANDFILL SITES
  Amendment made: No. 18, in page 41, line 16, at end insert—
  '(e) the person who is at the time concerned the holder of the licence, where section 60(e) above applies.'.—[Dr. Liam Fox.]

Clause 65

  ORDERS AND REGULATIONS
  Amendment made: No. 13, in page 43, line 32, at end insert—
  '(aa) an order under section (Exemptions: power to vary) above which produces the result that a disposal which would otherwise not be a taxable disposal is a taxable disposal;'.—[Dr. Liam Fox.]

Schedule 4

  LANDFILL TAX
  Amendment proposed: No. 19, in page 178, line 27, leave out
  'any records made in pursuance of the regulations to be preserved'
  and insert
  'registrable persons to preserve records of a prescribed description (whether or not the records are required to be made in pursuance of regulations)'.—[Mr. Heathcoat-Amory.]
  Mr. Deputy Speaker (Sir Geoffrey Lofthouse): With this we may take Government amendment No. 20.
  Ms Primarolo: Amendment No. 19 allows for the preservation of documents other than those required by the landfill tax regulations. I should be grateful if the Paymaster General would explain exactly what documents he thinks require preservation and why. Amendment No. 20 limits the ability to recover overpaid tax to a period of six years from the date of the payment rather than six years from the date of the discovery of the overpayment, as is presently proposed in schedule 4, paragraph 14(5).
  The original legislation mirrored the equivalent VAT provision, and I should be grateful if the Paymaster General would explain why he has changed his mind and suggested, in amendment No. 20, different regulations for overpayments.
  Mr. Heathcoat-Amory: The purpose of amendment No. 19 is to provide for regulations to impose a requirement on registerable persons to make records and keep such records for up to six years. It further provides that the requirements in respect of records may be set out in a published notice.
  In preparing draft regulations on the preservation of records by landfill site operators, it came to light that paragraph 2 as it stands does not enable Customs and

  1181
  Excise to require the preservation of records that the operator has not been required to make under landfill tax regulations. That means that Customs and Excise cannot require someone to preserve documents that he has received or made in the normal course of business, such as waste transfer notes, invoices and the like.
  Customs and Excise has the power to require the preservation of such records for other taxes and duties, and it is necessary for it to be able to carry out assurance audits on the basis of infrequent visits to traders. Amendment No. 19 is therefore designed to allow Customs and Excise to require the preservation of all relevant records for landfill tax. The hon. Lady can see that that is fully in line with the provisions made for other similar taxes, and is necessary for the orderly administration of the tax.
  The hon. Lady also asked about amendment No. 20. As I said in Committee, I understand that under the Bill as presently drafted the only time limit for claims where a mistake has been made by the trader is that they must be made within six years of the date when the mistake was discovered. There is no limit, however, to how far back the claims can be made. That conflicts with the principle of legal certainty and there is no justification for it.
  The amendment will bring the provisions for repayment of overpaid tax into line with the six-year time limit in paragraph 33 for customs assessments for underpayments of tax. The obligations on the taxpayer and the obligations on Customs are therefore mirrored. I mentioned that in Committee, and the amendment brings that change into effect.
  Amendment agreed to.
  Amendment made: No. 20, in page 185, line 19, leave out from 'paid' to end of line 25.—[Dr. Liam Fox.]
  Amendment proposed: No. 22, in page 202, line 15, leave out from beginning to end of line 29 and insert—

  '(a) material undergoes a landfill disposal,

  (b) a payment falls to be made under a disposal contract relating to the material, and

  (c) after the making of the contract there is a change in the tax chargeable on the landfill disposal.

  (2) In such a case the amount of any payment mentioned in subparagraph (1)(b) above shall be adjusted, unless the disposal contract otherwise provides, so as to reflect the tax chargeable on the landfill disposal.
  (3) For the purposes of this paragraph a disposal contract relating to material is a contract providing for the disposal of the material, and it is immaterial—

  (a) when the contract was made;

  (b) whether the contract also provides for other matters;

  (c) whether the contract provides for a method of disposal and (if it does) what method it provides for.'.—[Mr. Heathcoat-Amory.]

  Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendments Nos. 23 and 21.
  4.15 pm
  Ms Primarolo: I particularly want to congratulate the Paymaster General on tabling amendment No. 22, which is the same as Opposition amendment No. 38, which we tabled in Committee. We are delighted that the right hon. Gentleman has reflected on the powerful arguments we put in Committee. Although he felt unable to be persuaded at that time, having had an opportunity to read
  1182
  the Hansard report of the Committee and discuss the matter with the Confederation of British Industry, which has also published a briefing to welcome the amendment, he has had time to reflect on the unreasonableness of the landfill provisions as originally drafted. The right hon. Gentleman has now accepted that, where contracts already exist, there can he an automatic adjustment to take account of the tax.
  We are pleased that on this occasion we have been able to assist the Government in improving the legislation. We only regret that they did not take more notice of more of our amendments.
  Mr. Tim Smith: My recollection is that contracts that were signed before 29 November 1994 were a matter of concern to the Building Employers Confederation. I would also like to welcome the amendments that my right hon. Friend has proposed.
  Mr. Heathcoat-Amory: I thank the hon. Member for Bristol, South (Ms Primarolo) for her kind words and I reciprocate her compliments. It was necessary for us to consult widely outside the Committee before we tabled the amendment. I am happy that it satisfies all hon. Members as well as the trade bodies to which we talked.
  Amendment agreed to.
  Amendments made: No. 23, in page 202, line 33, at end insert—
  '45A.(1) This paragraph applies where—

  (a) work is carried out under a construction contract,

  (b) as a result of the work, material undergoes a landfill disposal,

  (c) the contract makes no provision as to the disposal of such material, and

  (d) the contract was made on or before 29th November 1994 (when the proposal to create tax was announced).

  (2) In such a case the amount of any payment which falls to be made—

  (a) under the construction contract, and

  (b) in respect of the work, shall be adjusted, unless the contract otherwise provides, so as to reflect the tax (if any) chargeable on the disposal.

  (3) For the purposes of this paragraph a construction contract is a contract under which all or any of the following work is to be carried out—

  (a) the preparation of a site;

  (b) demolition;

  (c) building;

  (d) civil engineering.'.

  No. 21, in page 202, line 36, leave out
  'rent payable in respect of land provides that the amount of the rent'
  and insert
  any sum payable in respect of the use of land (whether the sum is called rent or royalty or otherwise) provides that the amount of the sum'.—[Dr. Liam Fox.]

Clause 74

  TAXATION OF LOAN RELATIONSHIPS
  Mr. Mike O'Brien: I beg to move amendment No. 68, in page 47, line 34, at end insert—
  '(6) In the case of a debt in respect of which only credits or debits relating to interest are required to be brought into account under the provisions of this Chapter, sub-section (5) above shall not prevent any other provision of the Corporation Tax Acts from applying in relation to amounts other than interest.'.
  Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: Government amendment No. 32.
  No. 51, in schedule 8, page 218, line 12, after 'If', insert `(a)'.
  No. 52, in page 218, line 14, after 'accruing,', insert
  `and
  (b) credits representing the full amount of the interest are not for any accounting period brought into account for the purposes of this Chapter in respect of the corresponding creditor relationship,
  then'.
  No. 72, in page 225, line 4, leave out sub-paragraphs (4) and (5).
  No. 71, in page 225. line 10, leave out the words
  ',or one of the main purposes,'.
  No. 53, in page 226, line 29, after `period', insert ("the relevant period")'.
  No. 54, in page 226, line 32, leave out from 'security' to end of line 35 and insert
  "is available to another company at any time in that period;

  (c) for that period there is a connection between the issuing company and the other company, and

  (d) credits representing the full amount of the discount that is referable to that period are not for any accounting period brought into account for the purposes of this Chapter in respect of the corresponding creditor relationship.'.

  No. 55, in page 226, line 38, leave out from 'that' to end of line 42 and insert
  'every debit relating to the amount of the discount that is referable to the relevant period is brought into account for the accounting period in which the security is redeemed, instead of for the relevant period.
  (2A) References in this paragraph to the amount of the discount that is referable to the relevant period are references to the amount relating to the difference between—

  (a) the issue price of the security, and

  (b) the amount payable on redemption, which (apart from this paragraph) would for the relevant period be brought into account for the purposes of this Chapter in the case of the issuing company.'.

  No. 56. in page 226, line 49, leave out 'at any time' and insert 'for the relevant period'.
  No. 57, in page 227, line 1, leave out from beginning to 'one' in line 2 and insert—
  '(a) there is a time in that period or in the period of two years before the beginning of that period when'.
  No. 58, in page 227, line 4, leave out
  `at that time, or at any time in those two years'
  and insert
  `there is a time in that period or in those two years when'.
  Government amendments Nos. 38, 59 and 40.
  Mr. O'Brien: This probing amendment is designed to clarify an issue regarding loan relationships. The changes in the Finance Bill to loan relationships will impact upon many companies throughout the country. In Committee there was considerable discussion about how great that impact would be. There were also a lot of amendments because of the need to clarify the Bill. It became clear that this was an enormously complex area of law, but the amendment focuses on one aspect that, in some ways, illustrates the overall problems that face businesses with loan relationships.
  We were reassured in Committee that although this was a complex area of law, it would not cause enormous difficulties to smaller businesses because the complexities of the matter would impact mainly on larger corporations which have accountants and specialists able to deal with it. I hope that that is the case, but we have seen-as the amendment again illustrates-that there are areas of ambiguity that even a specialist might find difficult. The legislation seems to have been rushed and is often confused, and we will probably have to tidy it up in the years to come—at which time, no doubt, it will be a Labour Government who will have to do it.
  Our proposal is specific. Clause 94 of the amended Bill deals, among other things, with perfectly ordinary trade debts that are interest-bearing. Such debts are within the loan relationships regime by virtue of that clause, in that the interest is brought into that regime. If the trade debts should turn out to be bad or doubtful, it appear—unfortunately—that no relief is available for the loss in respect of the debt itself. In contrast, relief is available in respect of the interest. It is at least arguable that clause 94(5) of the amended Bill will prevent the relief from being claimed as a trading deduction in the normal way for the bad debt.
  The question whether the interaction of clauses 94 and 97 denies a trader any relief on bad trade debts was raised in Committee, and the Minister gave some explanation. To avoid ambiguity, however, it would be helpful if she would explain in further detail exactly what the Government are proposing, and that is why we tabled the amendment.
  Mr. Tim Smith: Will the hon. Gentleman confirm that it is now Labour party policy to introduce statutory interest on the debts of companies? If so, would that be subject to this legislation? Would that not be an additional complication for small businesses?
  Mr. O'Brien: The hon. Gentleman raises an interesting and important matter. I am not sure that it is directly applicable to the amendment, but as he has raised it—and as you have allowed the intervention, Mr. Deputy Speaker—I shall try to deal with it. We have received many representations from small businesses whose debts have not been paid, causing considerable cash flow problems. I am sure that the hon. Gentleman has such cases in his constituency, as I have in mine. When I go to visit small business men, I can almost guarantee that that issue will be raised, and I am sure that all hon. Members agree.
  The various small business organisations have tried for a number of years to find ways of resolving the problem, and there are currently divisions of opinion within the

  1185
  small business community as to how it can be dealt with. The Government have listened to some of the organisations, and the Opposition have often listened to the same ones. We have reached somewhat different conclusions about what is needed to deal with the problem, but we accept that it is enormously important.
  Labour is consulting on charging interest in relation to debts above a certain threshold, particularly in so far as it benefits small businesses. That is certainly something that has been requested in a much broader way by a number of small business organisations. I am not sure that we can meet all their requests. As I said, there have been conflicts even within the small business community about how to deal with the matter. It is certainly important that we tackle the issue, which is what we are trying to do, initially through consultation. We are flagging up some ideas and we hope to get a positive consensus from the business community so that we can resolve and deal with the issues. In due course, the Conservative party may well come on board on those ideas. It is important that, as far as possible, there is that consensus.
  I am conscious of the fact that one small business person's bad debt is another's extension of credit. So, when dealing with such issues, one has to be careful that in benefiting one small business one does not damage the other. That is why we are conscious that there must be a threshold—perhaps the size of the business or the debt—at which we would consider charging statutory interest. It has to be done with care and with the degree of consultation necessary.
  We are starting that process now. The Labour Front-Bench team has flagged up the issue and I know that the Government Front-Bench team has also been consulting small business. As far as possible, it is important that we take it out of the argy-bargy of political debate. If we can get that sort of consensus within the business community, it will be all the better for all of us.
  I am conscious, however, that other hon. Members will want to speak on amendment No. 68 and that they have various other proposals that they want to deal with during this short debate. Our amendment makes it clear that clauses 74 and 94 would deny relief for bad trade debts. Perhaps the Minister can clarify the position and provide the reassurances that we seek. If so, we might be able to end the ambiguity and doubt, which does need clearing up, and we might not need to press the amendment, which is why I flagged that up.
  The Government's adherence to the Child Support Agency syndrome illustrates the problem that has faced us throughout the debate on loan relationships. The Government get a good idea—as I said in Committee, the concept of loan relationships is enormously important and there is a broad consensus of support on both sides of the House—but, as we have found so often, with self-assessment, for example, and with yesterday's amendment on taxes for transport and so forth, they fail to consult properly and rush it into legislation, thereby undermining the chances of it succeeding as well as it could.
  After we finished the Committee stage of the Bill, I received a letter from the Chartered Institute of Taxation, which continues to have certain doubts about the way in which we dealt with loan relationships. We all accept that the Government and the Minister, within the time
  1186
  constraints that they allowed themselves, have tried to consult as much as possible. On behalf of the Opposition, I would certainly concede that.
  The difficulty that the Minister and the Treasury faced was the short period that they gave themselves in which to consult. That is what has led to the difficulties and ambiguities tackled by amendment No. 68 and why we will return to the matter in years to come. That is unfortunate. I would rather that we had slightly more time to consult properly and deal with the issues. Then we might have avoided having to table late amendments to try to resolve ambiguities.
  On last-minute amendments, the Government have tabled several amendments that are being taken as part of this group. Will the Economic Secretary set out exactly what each amendment proposes, so that we can be absolutely clear about it? I think that I understand what the Government are about with them, but they are there to tidy up the Bill and it is important that everything should be laid out plainly for everyone to read.
  4.30 pm
  Mr. Barry Legg: I join the hon. Member for Bristol, South (Ms Primarolo) in welcoming and supporting the Government's change of heart in respect of the seven amendments that I have tabled. In the debate to be found between columns 629 and 632 of the Official Report of the Committee, I highlighted the lack of symmetry under existing legislation on relief for interest and on deep discount securities.
  My amendments relate to paragraphs 2 and 17 of schedule 8. They would cure any potential mismatches that would exist where interest is taxed as being receivable but the interest accrued by the borrower would not get relief. That is a most welcome step forward by the Government which will help many businesses with their tax affairs.
  Hon. Members who were in Committee will remember that, in column 631, I related the problems that joint venture lenders sometimes have. I referred to a particular case that my hon. Friend the Economic Secretary was kind enough to say she would consider further. My amendments deal with mismatches but the House may well have to return to relief for joint venture lenders, especially as regards bad debt provisions.
  The amendments relating to paragraph 17 provide that, where deep discount securities exist, relief for the discount is not deferred in the hands of the borrower when it is brought into account in the hands of the lender under corporate debt rules. They are a worthwhile tidying-up of the legislation.
  Finally, I want to raise with my hon. Friend the Minister another matter relevant to schedule 8, which is the proposal of certain building societies to take advantage of the provisions of the Building Societies Act 1986 to convert themselves into public limited companies. It is vital that the new provisions on corporate debt that we are discussing create no impediment to or penalty for that process. I hope that she will be able to confirm that

  1187
  there should not be a tax problem on the transfer of the loan relationships of a building society on conversion to a limited company.
  Mr. Matthew Carrington: Amendment No. 71 would clarify the tax avoidance provisions in schedule 8. It would remove the broadening part of the schedule, the words
  "or one of the main purposes".
  That would remove the uncertainty in interpretation by disallowing tax relief only where the obtaining of that relief was the main purpose of the transaction. In other words, as it stands, the existing phrase could cover a wide range of activities—particularly when a company enters into an ordinary loan transaction but clearly no loan transaction has been entered into except in the circumstances where tax relief would he obtainable on the interest payable under that loan. According to a strict interpretation of the current wording, the Inland Revenue could disallow the tax relief on the interest.
  The Inland Revenue could have no such intention and no reason to use the wording of the schedule to achieve that end. However, the fact that the powers exist for it to do so is causing great uncertainty in both the business and the commercial worlds. The concerns that my amendment attempts to address were raised with me by the Confederation of British Industry. It has examined the impact of the schedule and is very concerned about its potential effect on its members.
  It is true that tax avoidance definitions can be drawn very widely, and it may be that the wording is drawn no more widely than existing tax avoidance provisions. However, because of the uncertainty that it creates, I suggest that the fact that it has been done before is not a particularly good reason to continue it this time. It is important that anti-avoidance legislation is clear, simple and capable of interpretation by commerce and industry with as much certainty as possible.
  I think that the measure fits in quite well with the tax simplification measures about which the Inland Revenue is consulting. I hope that, in a spirit of simplification, my hon. Friend will accept my amendment—or, at the very least, reassure me, business and commerce that the Inland Revenue does not intend to interpret the present wording of schedule 8 in such a broad way as to attack perfectly legitimate commercial transactions that, by their very nature, have a tax element.
  Mr. Douglas French: I shall speak to amendment No. 72 standing in my name which deletes sub-paragraphs (4) and (5) of paragraph 13 of schedule 8. This amendment also relates to loan relationships and it addresses a matter which is of particular concern to the leasing industry—indeed, it was raised with me by the Finance and Leasing Association and by a number of its member firms.
  As they stand, the sub-paragraphs introduce a tax anti-avoidance provision that is very broad and uncertain in its application. Sub-paragraph (5) uses, and subparagraph (6) defines, a tax advantage. The definition of "tax advantage" is borrowed from the Taxes Act 1988 and I submit that it is not applicable in this different context.
  1188
  When it is used in other places, it forms part of the rules that are designed to deal with dividend stripping and similar transactions in the securities industry. They are accepted as being broad and complex and, for that reason, provision is made for a pre-transaction clearance procedure and for a special appellate body—the tribunal—which is set up to hear appeals from the special commissioners by way of a rehearing before the normal appeal by way of a case stated to the High Court. That is thought necessary in the context of the securities industry, but the Finance Bill makes no similar safeguards in the context of the leasing industry.
  Sub-paragraph (4) prohibits an interest deduction if
  "the main purpose, or one of the main purposes"
  of the loan or related transaction is the securing of a tax advantage as defined. This creates uncertainty, because it is very difficult to define a "main" purpose. If it is so difficult to define "main" purpose and no clearance procedure is provided for in the rest of the Bill, it is certain to inhibit the type of loan transactions in which members of the Finance and Leasing Association become involved.
  The subsection also covers a tax advantage obtained by any person—not only one of the parties to the loan relationship or related transaction.
  Although a lease is considered not to be a loan relationship in the definition contained in clause 75, there is frequently a loan relationship between a leasing company's parent and the leasing company to enable the lease to be financed. For example, a bank will provide finance to its leasing company to purchase assets to be leased.
  The industry fears that, as one of the purposes of a lease is to make best use of capital allowances, interest on the parent company loan might be refused as a deduction to the leasing company on tax avoidance grounds.
  To put it another way, under the subsections it can be argued that the purpose of the loan relationship is partly to enable the leasing company to claim capital allowances. The benefit of the capital allowances passes, by way of reduced charges, to the business that makes use of the equipment. The obtaining of the allowances for the benefit of the end user might be regarded as one of the "main purposes- of the loan relationship. If that were so, the leasing company would be denied a tax deduction in respect of the interest payments made to its parent.
  That is not the end of the matter. If these paragraphs were enacted, banks and leasing companies would undoubtedly endeavour to protect themselves against such a possibility by including tax warranties and an indemnity in the contract with the end user. In that way, the economic burden of these anti-avoidance provisions would be borne by bona fide businesses doing their best for the British economy and with no direct connection with, and possibly no knowledge of, the basis of the original loan relationship. That cannot be intended.
  This is a matter of very deep concern to the leasing industry, which is too important an industry to have its legitimate activities curtailed because a clause is capable of being prayed in aid to such potentially damaging effect.
  Mr. Mike O'Brien: I am grateful to the hon. Gentleman because he raises an interesting and important point. Will he tell us a little more about what consultation

  1189
  was undertaken by the Government about these important matters with the leasing industry, and about the results of that consultation?
  Mr. French: My contribution is based on discussions that I had personally with the director general of the Finance and Leasing Association, with his tax adviser, and with other leasing companies, including Lloyds Leasing, and RoyScot in Cheltenham near my constituency. They all use the same argument, and I am convinced that there is great merit in it. They tell me that representations have been made, as they are in the usual course of any Finance Bill, to the Treasury and to the Inland Revenue, and they are therefore very hopeful that some of the points that I am articulating on their behalf will be well received and that some response will be forthcoming from the Minister.
  Mr. Carrington: I think my hon. Friend is making a point similar to the one that I made before, but in the specific context of the leasing industry. The difficulty, as I understand it, is that the Inland Revenue has been in the habit of having its anti-avoidance provision drawn very broadly and then not applying it except when it believed that there was a genuine abuse. The point that my hon. Friend and I are making is that, in simplifying the tax regime, it would be better if the Inland Revenue were more specific about the type of avoidance it is attacking rather than taking general powers to itself.
  Mr. French: I accept that point. The leasing industry does not wish to be exposed to the risk of actions being brought against it purely because the sub-paragraphs are couched as broadly as they are. The industry would prefer a more precise definition so that, in undertaking any transactions, it can be certain that it is complying with the law as it stands—as it would wish to do—and does not have to inhibit its business on the outside chance that something it does may be interpreted, possibly on a maverick basis, unexpectedly by the Inland Revenue as contravening the Finance Bill.
  4.45 pm
  The leasing industry is an important industry, and the importance of ensuring that it has a satisfactory tax regime should not be underestimated, especially in view of the important role that the leasing industry increasingly plays in the private finance initiative. This is a matter of great importance to most members of the Finance and Leasing Association.
  I hope that, in her reply, the Minister will recognise the important role played by leasing firms and acknowledge that the need to ensure that there is no tax avoidance should be balanced with the need to ensure that legislation is not drafted so broadly that it unnecessarily inhibits legitimate business activity.
  Mr. Tim Smith: I have a great deal of sympathy with what my hon. Friends the Members for Gloucester (Mr. French) and for Fulham (Mr. Carrington) say, because they are both worried about the broad way in which the anti-avoidance provisions are drawn.
  I raised that matter in Committee. I know that my hon. Friend the Economic Secretary gave it some attention, and I am hopeful that she might be able to say something reassuring on the record in due course.
  1190
  The hon. Member for North Warwickshire (Mr. O'Brien) complained that several Government amendments had been introduced at very short notice—indeed, on Monday. I notice that his amendment was also tabled on Monday, so we had no advantage over the Opposition.
  The Economic Secretary to the Treasury (Mrs. Angela Knight): I shall try to answer the points that have been made to me.
  I start with the amendment tabled by the hon. Member for North Warwickshire (Mr. O'Brien). He should keep in mind the three basic principles that I repeated in Committee several times—that the tax should recognise all debits and credits, calculated according to recognised accounting methods, and the figures should follow those produced in the accounts wherever they are acceptable. That covers the points that he made.
  Subsection (5) of what is now clause 74 is intended to give reassurance that, if a loan relationship is fully within the new rules, these are comprehensive and cover all aspects of that loan relationship, but clearly, where only the interest element of the loan relationship or interest on a debt that is not a loan relationship is within the new rules, those rules can apply only to that interest. Any other elements of the debt, such as capital gains or losses, are automatically dealt with under the appropriate separate legislation.
  The point that the hon. Member for North Warwickshire made related to interest on late payment of a trade debt. Supposing that a company sold some widgets to another company for which the second company had not paid and interest was charged on that debt as a trade debt, the interest would be dealt with under the chapter II regime; the trade debt would be dealt with as a trade debt as it is at the moment. That is the principle behind current legislation; that is the principle that will be followed with the chapter II rules. Indeed, it fits in with what is now clause 94. The existing rules include all forms of interest, however they arise; the new rules cover only interest arising on loan relationships. Clause 94 sweeps up other interest not arising from loan relationships, such as interest on compensation awards and on overdue trade debts.
  One of the difficulties with the amendment moved by the hon. Member for North Warwickshire is that it creates ambiguity. I accept that he is trying to put clarity into the situation, but the amendment would create an ambiguity. For example, there are many true loan relationships that are and should be fully within the new rules, whereas in practice the only debits and credits that are required to be brought into account under the new rules relate to interest. Most straightforward loans from a bank are likely to fall into this category.
  As the hon. Gentleman knows, the vast majority of companies in this country have straightforward loans from banks. Therefore, they already account on an accruals basis, they are already taxed on an accruals basis and they fall within this legislation—they do not have to make any changes because the methods by which they already account and are taxed are fully covered. If he were to press his amendment and if it were part of the legislation, it would create a picture of companies shopping around old and new legislation.
  I suggest to him that the first thing that would happen is that a couple of lawyers would look at the legislation and say that the points in his amendment were covered by

  1191
  the clause before it was amended. They would seek to see why we had put a legal tautology into the Bill, and that would result in us opening up an ambiguous situation that is currently covered. The way in which it has been set out in the clause as it stands is not unusual, has not attracted much attention and better sets out the position that we are trying to ensure by this chapter and by these rules. I urge the hon. Gentleman not to push his amendment any further.
  I turn now to the amendments tabled by my hon. Friend the Member for Milton Keynes, South-West (Mr. Legg)—that is, amendments Nos. 51 to 58. He made many of these points in Committee and, on reflection, I believe that what he proposes is correct. His amendments refer to anti-avoidance measures in schedule 8, and the part of the schedule to which the amendments refer is tax relief on interest on loans between connected companies.
  In effect, my hon. Friend is seeking to change the rules as they are set out in the schedule to cover what is perhaps commercial reality. He is seeking to ensure that where two companies are connected, they are accounting on an accruals basis, with only the odd exception. The lender company A is being taxed on the interest that it is accounting as receiving, even though it has not received it. I believe that my hon. Friend's amendments—both in relation to interest and the other more complicated set of amendments—are acceptable. I urge my hon. Friends to agree with the amendments.
  Mr. Mike O'Brien: I am interested in the fact that the Minister is accepting the amendments proposed by her hon. Friend the Member for Milton Keynes, South-West (Mr. Legg) and I entirely accept that. Did the Inland Revenue have any part in drafting the amendments? Did it approve them? The suspicion might arise in the minds of some more suspicious than I that these were Government amendments that Ministers felt—because of the level of embarrassment with these things over loan relationships—they might prefer in a Back Bencher's name. However, I am sure that that is not so.
  Mrs. Knight: This was discussed at some length in Committee and I then discussed it further with my hon. Friend. I felt that he put a good case in Committee. We have ensured that the amendments that have been drafted are legally correct—that is a perfectly sensible route to take. My hon. Friend highlighted these points in Committee and showed what could be the commercial consequence if we retained the tighter anti-avoidance provisions for companies that come within the chapter 2 provisions, and there could be some difficulties.
  As I have said so many times during the course of the Bill, where a good case is put to us—by whomever it might be—we would be remiss if we did not accept it as being good and accurate, and did not accept the amendments accordingly or, as I have done, place them where we felt it was right to do so. My hon. Friend made a point about joint venture lenders. As I said to him earlier, we believe that the provisions will work satisfactorily.
  My hon. Friend also raised the issue of building societies and their concern when they were converting to public companies. I assure my hon. Friend that Inland
  1192
  Revenue officials and I are aware of the building societies' concerns and are in correspondence with their representatives regarding conversions and takeovers. Our current understanding of the position is that there should not be a problem. It appears that the relevant transactions can be structured so as to avoid any difficulties. Although we cannot give reassurances about hypothetical situations, if real problems emerge in the future we will be happy to consider them. I hope that my hon. Friend finds that response satisfactory.
  The next points were raised by my hon. Friends the Members for Fulham (Mr. Carrington) and for Gloucester (Mr. French). I hope that they do not mind me saying that their points are variations on the same theme. The Government are aware of concerns that have been raised by my hon. Friends and by others regarding the particular anti-avoidance provisions in paragraph 13. This paragraph was amended significantly in Standing Committee but, because of the concerns that my hon. Friends and others have raised, I take the opportunity to allay some of the fears that have been expressed about the anti-avoidance rules.
  Paragraph 13 of the schedule disallows tax deductions to the extent that tax avoidance is the main motive behind a loan relationship. We have been told of concerns that this could be interpreted as preventing companies from getting tax relief for legitimate financing arrangements. I am happy to offer a reassurance that this is not the intention of the legislation. The paragraph denies tax deductions on loans that are for the purpose of activities outside the charge to corporation tax. Among other things, this will ensure that United Kingdom branches of overseas companies do not get tax relief for borrowings that are for overseas activities outside the United Kingdom tax net.
  We have been asked whether financing—which, for example, is to acquire shares in companies, whether in the United Kingdom or overseas, or is to pay dividends—would be affected by the paragraph. In general terms, the answer is no, but the paragraph might bite if the financing were structured in an artificial way.
  It has been suggested that structuring a company's legitimate activities to attract a tax relief could bring financing within this paragraph—some have gone so far as to suggest that the paragraph might deny any tax deduction for borrowing costs. These suggestions are clearly nonsense. A large part of what the new rules are about is ensuring that companies get tax relief for the cost of their borrowing.
  One specific point has been put to me by my hon. Friend the Member for Gloucester—that is, borrowing by a finance leasing company to acquire assets where this is more tax efficient than the lessee investing in the assets direct. Again, I am happy to offer a reassurance. Where a company is choosing between different ways of arranging its commercial affairs, it is acceptable for it to choose the course that gives a favourable tax outcome. Where paragraph 13 will come into play is where tax avoidance is the object, or one of the main objects, of the exercise.
  Companies that enter into schemes with the primary aim of avoiding tax will inevitable be aware of that. The transactions we are aiming at are not ones which companies stumble into inadvertently. As one top tax adviser said recently, companies will know when they are into serious tax avoidance; apart from anything else, they are likely to be paying fat fees for clever tax advice and there will commonly be wads of documentation.

  1193
  The last thing I want to do, however, is set out a list of so-called acceptable or unacceptable activities. Borrowing for commercial purposes can be structured in a highly artificial way in order to avoid tax. If we said that borrowing for certain types of activity would always be okay, tax advisers would quickly take advantage and devise artificial financial arrangements simply to avoid tax. Provided that companies are funding commercial activities or investments in a commercial way, they should have nothing to fear. If they opt for artificial, tax-driven arrangements, they may find themselves caught.
  It is clear that a balance must be struck between meeting the concerns that have been raised and weakening the provision in those instances where it needs to apply, but I can assure my hon. Friends that we shall keep the matter under review.
  5 pm
  I now turn briefly to the Government amendments. Amendment No. 32 would make a minor change to the provision for debt contracts and options. The hon. Member for North Warwickshire wanted an explanation. Let me give him a brief explanation of the amendment, which results from a drafting error.
  Without the amendment, payments relating to contracts constructed by reference to hypothetical loan relationships could not be taken into account under the rules for derivative transactions.
  Amendments Nos. 38, 59 and 40 address another issue altogether—double tax relief. The basic rule has always been that double tax relief is given in proportion to the amount of foreign interest that accrues to the company concerned. The new rules for corporate debt do not change that principle, but a number of minor and consequential amendments have been needed, including a specific provision preserving the position of non-traders under the new rules.
  The amendments would enable regulations to extend to trading companies the application of the provision granting double taxation relief to non-traders. Using regulation to do that will facilitate consultation with those affected in the financial markets, so that the different authorised accounting methods available can be taken into account. It will also enable any necessary safeguards against loss of tax to be built in. I hope that the hon. Gentleman finds those explanations satisfactory.
  Mr. Mike O'Brien: The amendments appear to give the Treasury the power to make regulations to extend to general insurance the rules applying to life assurance companies. Amendment No. 59 can be criticised in that it does not state sufficiently precisely what the regulations will do. Can the Minister tell us precisely what powers to regulate are being taken and what the regulations are intended to do?
  Mrs. Knight: The regulations are intended to ensure that double tax relief is available to financial traders. I cannot specify precisely how they will be formulated because we need to discuss the matter with the financial traders and those involved. There is a requirement to get it right. We intend to ensure that tax relief is available and to do so in the right way.
  The hon. Gentleman asked about insurance. The reason that insurance is mentioned—and there is a special mention of insurance credits—is that insurance is one of
  1194
  those particular industries that always has a separate mention, as he will recall from the Bill. For non-insurance companies, all overseas interest on which relief for overseas tax might be due is either a trading credit or a non-trading credit. As so often happens, there are special twists for insurance companies.
  Certain non-trading credits are not covered by the existing rules for such credits in section 807(A)(3) of the Income and Corporation Taxes Act 1988. The amendments make sure that such insurance credits may also be the subject of regulations. Again we want to discuss the matter with the industry to establish exactly what rules are required so that we can be sure of getting them right. I hope that I have given the hon. Gentleman the explanation he wanted.
  Mr. Mike O'Brien: We have had an interesting and informative debate. I share many of the concerns so well expressed by Conservative Members, particularly the hon. Members for Gloucester (Mr. French) and for Fulham (Mr. Carrington) about—as the hon. Gentleman for Gloucester put it—the need not to draw anti-avoidance provisions so broadly that they interfere with legitimate business dealings. That is a good lesson for us all. It also builds on the important proposals for simplification made last year by the hon. Member for Beaconsfield (Mr. Smith).
  Tax legislation should be as clear as possible, and concerns were rightly expressed about the lack of clarity and the difficulties that that can create. In many ways, today's debate has demonstrated the best side of the House of Commons in that we sought to clarify ambiguities and get the legislation right. I am pleased that the Minister has adopted a positive attitude to the concerns of Conservative Back Benchers and the Opposition.
  I understand what the Minister said about amendment No. 68. By and large, I accept that there may be a problem in pursuing the amendment and at the end of my remarks I shall seek the leave of the House to withdraw it.
  Government amendments Nos. 38, 59 and 40—particularly amendment No. 59—demonstrate the price of rushing through measures without proper and full consultation. As has already been flagged up in the debate, it is important that we get tax legislation right and that there is full consultation with the various groups concerned.
  The amendments demonstrate the price to be paid if that full consultation period is not allowed. The Government must now insert into the Finance Bill the ability to make regulations, the detail of which they have not yet worked out so they need to consult further. I accept the Minister's promise that such consultation will take place. I also accept that there is no prospect of further delay in loan relationships legislation, so the best way of proceeding is probably to put into law a provision allowing the Government to make regulations after full consultation has taken place, so that we can clear up these matters.
  Giving the Government powers to make regulations is not the best way to address these issues, but in the circumstances, it is perhaps understandable. That said, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.

Clause 95
  FINANCIAL INSTRUMENTS
  Amendment made: No. 32, in page 67, line 41, at end insert 'or (6)'.—[Mrs. Angela Knight.]
Clause 156

  LIMITS ON RELIEF FOR EXPENSES
  Amendment proposed: No. 33, in page 113, line 41, after `1996,' insert—
  `(iia) any amount which in pursuance of a claim under paragraph 4(3) of that Schedule is carried back to that period and (in accordance with paragraph 4(5) of that Schedule) applied in reducing profits of the company for that period,'.—[Mrs. Angela Knight.]
  Mr. Alistair Darling: I was wondering whether the Economic Secretary might say a little more. Rather than formally proposing the amendment, will she tell us why the Government have chosen that particular form of words. Are we now dealing with amendment No. 33?
  The Financial Secretary to the Treasury (Mr. Michael Jack): I thought that we were still on the amendments grouped with amendment Nos. 68 and 32. We have not yet decided them.
  Mr. Deputy Speaker: We are on amendment No. 33.
  Mr. Darling: I can understand the Financial Secretary's confusion: sometimes procedure is a great mystery, even to those of us who have served on Finance Committees for many years. When I rose to my feet to remonstrate with the Economic Secretary, who attempted to get amendment No. 33 agreed to formally, I said that I thought it might be helpful if the Government set out what the amendment is meant to achieve. If the Financial Secretary, who has now found the relevant briefing note, could tell us what the amendment is designed to do, I should be profoundly grateful.
  Mr. Jack: The amendment is a straightforward and simple addition to what was added subsequently to clause 156 in Committee. The subsequent legislation allowed insurance companies carry-back facilities in respect of loan relationships. This amendment inserts that into the taxation procedures of life insurance companies.
  Mr. Darling: I am grateful to the Minister. I know that we had an agreement to allow some amendments to pass formally, but this one gave rise to a query on the part of those advising us. It is helpful when Ministers set out what amendments are meant to achieve.
  I did not mean to embarrass the Financial Secretary. If I succeeded in doing so, I apologise.
  Amendment agreed to.
  Amendment made: No. 34, in page 114, line 27, after `(5)' insert
  `Subject to paragraph 4(10A) to (10C) of Schedule 10 to the Finance Act 1996,'.—[Mr. Jack.]

Clause 174

  BUSINESS PROPERTY RELIEF
  Amendment proposed: No. 60, in page 137, line 28, at end insert—
  `( ) In section 107(4) (replacement of property with unquoted shares), for the words from the beginning to "such shares" there shall be substituted—
  "(4) Without prejudice to subsection (1) above, where any shares falling within section 105(1)(bb) above which are".'.—[Mr. Jack.]
  Mr. Mike O'Brien: I picked up the Government's press release on this matter. Paragraph 4 states:
  "Due to a technical defect, the current proposals in the Bill would have had the effect of withdrawing the replacement facility now available to controlling holdings. This was not the intention. Under the amendments both the existing facilities will be made available to all unquoted holdings regardless of their size."
  I do not want to be churlish, but our general complaint throughout proceedings on the Bill has concerned the facts that the Government have had to submit amendments at the last moment, and that there have been problems to do with technical drafting, with lack of consultation, and with various failures on the part of the Government's system to get the Bill right.
  There seems to be too much rush in the Government's approach. This will probably be my last opportunity to raise that concern, but it is valid, and the Government must take account of it. If they have to introduce another Finance Bill, I hope that they will acknowledge the anxieties that we have expressed throughout consideration of the Bill—through loan relationships, self-assessment and various aspects of inheritance tax.
  I accept that technical defects will always come to light once a Bill has been published. We would hope that they would be as few as possible. In this case, there have been far too many mistakes. It is clear that the Government are not properly using the time running up to the Budget to work out precisely what they are doing. It is incumbent on Ministers to assure the House, even though they may not accept all our criticisms, that they understand our concern when Bills are brought before the House and are then subjected to last-minute, multiple amendments.
  The omission under consideration, corrected by an amendment designed to reinstate a relief that was inadvertently omitted from clause 174, is a good case in point. I hope that the Minister will assure us that what I have said will be remembered. I offer those remarks in a helpful spirit, not to make a party political point. I hope that the Minister will give us the assurance that things will be done a bit better next time.
  Mr. Jack: To err occasionally is a human failing, but Report stage offers us the opportunity to put human failings right. We have duly taken advantage of that on this occasion. I am always the first to apologise if anyone has made a mistake, because I make mistakes and I realise that I am a human being with that frailty.
  The hon. Gentleman misunderstood the purpose of the amendment. It is not a question of having made a mistake; it is just that, when drafting the clause, we based the whole test of what is a qualifying asset for the business property relief on one of two two-year tests. Having

  1197
  realised that we had restricted the basis on which assets can qualify for this 100 per cent. relief, as defined in clause 174, we sought not just to return to the status quo ante but to go a stage further, to enable those affected by the clause to have two two-year tests. So, we have improved the legislation. I take what the hon. Gentleman said in the spirit in which he delivered his remarks. While even we Conservatives remain human beings, we shall do our best to try to get it right in future.
  Amendment agreed to.

Clause 192

  MODIFICATION OF THE AGRICULTURE ACT 1993
  Amendments made: No. 7, in page 155, line 47, at end insert—
  '(4A) Paragraph 1 of Schedule 2 to the Agriculture Act 1993 (tax continuity with successor bodies) shall have effect, and be deemed to have had effect, in relation to any relevant transfer after 31st December 1995 to a society registered under the Industrial and Provident Societies Act 1965 of—

  (a) a trade, or part of a trade, of a milk marketing board, or

  (b) any property, rights or liabilities of such a board,

  as it has effect in relation to any transfer under section 11 of that Act to a qualifying body.'.
  No. 8, in page 156, line 6, leave out from first 'of' to `is' in line 7 and insert
  `subsections (4A) and (5) above a transfer of anything to a society registered under the Industrial and Provident Societies Act 1965'.
  No. 9, in page 156, line 10, leave out 'the board' and insert 'a milk marketing board'.
  No. 10, in page 156, line 16, leave out from 'transfer' to end of line 18.—[Mr. Jack.]
  Amendments made: No. 50, a new schedule—
  Mixing of rebated oil—
  The following is the Schedule which shall be inserted after Schedule 2 to the Hydrocarbon Oil Duties Act 1979—

SCHEDULE 2A
  MIXING OF REBATED OIL

    PART I
    Power to create exceptions
    3. The Commissioners may give a direction that, in such description of circumstances as may be specified in the direction, a mixture is not produced in contravention of paragraph 1 above or (as the case may be) paragraph 2 above.

    PART I

      LIGHT OIL
      Converting unleaded petrol into leaded petrol
      1.—(1) A mixture which is leaded petrol is produced in contravention of this paragraph if such a mixture is produced by—

      (a) adding lead to unleaded petrol in respect of which a rebate has been allowed under subsection (1) of section 13A(1) of this Act at the rate given by subsection (1A)(a) of that section;

      (b) adding lead to unleaded petrol in respect of which a rebate has been allowed under subsection (1) of that section at the rate given by subsection (1A)(b) of that section; or

      (c) adding lead to a mixture of unleaded petrol of a description mentioned in paragraph (a) above and unleaded petrol of a description mentioned in paragraph (b) above.

      (2) In sub—paragraph (1) above the reference to adding lead to unleaded petrol includes a reference to adding leaded petrol to unleaded petrol.
      (3) This paragraph is subject to any direction given under paragraph 3 below.
      Adding octane enhancers to low octane unleaded petrol
      2.—(1) A mixture which is super-unleaded petrol is produced in contravention of this paragraph if such a mixture is produced by adding an octane enhancer to unleaded petrol in respect of which a rebate has been allowed under subsection (1) of section 13A of this Act at the rate given by subsection (1A)(b) of that section.
      (2) For the purposes of sub—paragraph (1) above 'super—unleaded petrol' means unleaded petrol—

      (a) whose research octane number is not less than 96; and

      (b) whose motor octane number is not less than 86.

      (3) Subsection (1C) of section 13A applies for the purposes of this paragraph as it applies for the purposes of that section.
      (4) This paragraph is subject to any direction given under paragraph 3 below.

PART II

  HEAVY OIL
  Mixing partially rebated heavy oil with unrebated heavy oil
  4. A mixture of heavy oils is produced in contravention of this paragraph if such a mixture is produced by mixing—

  (a) gas oil in respect of which a rebate has been allowed under section 11(1)(b) of this Act; and

  (b) heavy oil in respect of which, on its delivery for home use, a declaration was made that it was intended for use as fuel for a road vehicle.

  Mixing fully rebated heavy oil with unrebated heavy oil
  5. A mixture of heavy oils is produced in contravention of this paragraph if such a mixture is produced by mixing—

  (a) heavy oil which is neither fuel oil nor gas oil and in respect of which a rebate has been allowed under section 11(1)(c) of this Act; and

  (b) heavy oil in respect of which, on its delivery for home use, a declaration was made that it was intended for use as fuel for a road vehicle.

  Mixing fully rebated heavy oil with partially rebated heavy oil
  6. A mixture of heavy oils is produced in contravention of this paragraph if such a mixture is produced by mixing—

  (a) heavy oil which is neither fuel oil nor gas oil and in respect of which a rebate has been allowed under section 11(1)(c) of this Act; and

  (b) gas oil in respect of which a rebate has been allowed under section 11(1)(b) of this Act with heavy oil.

  Complex mixtures of heavy oils
  7. A mixture of heavy oils is produced in contravention of this paragraph if such a mixture is produced in contravention of more than one paragraph of paragraphs 4 to 6 above.

PART III

  RATES OF DUTY, ETC.
  Rate for mixtures of light oil
  8.—(1) Subject to paragraph 10 below, duty under section 20AAA(1) of this Act shall be charged at the following rates.
  (2) In the case of a mixture produced in contravention of paragraph 1 above, the rate is the rate for light oil in force at the time that the mixture is produced.
  (3) In the case of a mixture produced in contravention of paragraph 2 above, the rate is the rate produced by deducting from the rate for light oil in force at the time the mixture is produced the rate of rebate which at that time is in force under section 13A(1A)(a) of this Act.
  (4) In this paragraph 'the rate for light oil' means the rate given in the case of light oil by section 6(1) of this Act.
  Rate for mixtures of heavy oil
  9.—(1) Subject to paragraph 10 below, duty charged under subsection (2) of section 20AAA of this Act shall be charged at the rate for heavy oil in force at the time when the mixture is supplied as mentioned in that subsection.
  (2) In this paragraph 'the rate for heavy oil' means the rate given in the case of heavy oil by section 6(1) of this Act.
  Credit for duty paid on ingredients of mixture
  10. Where duty is charged under section 20AAA of this Act in respect of any mixture, the amount of duty produced by applying paragraph 8 or 9 above shall be reduced by the amount of any duty under section 6 of this Act which the Commissioners are satisfied has been paid in respect of any ingredient of the mixture.
  Interpretation
  11. In this Schedule—
  `fuel oil' and 'gas oil' have the same meanings as in section 11 of this Act;
  `leaded petrol' and 'unleaded petrol' shall be construed in accordance with section 13A of this Act."'— [Mr. Jack.]
  Brought up, read the First and Second time, and added to the Bill.
  No. 65, a new schedule—
  Life assurance business losses—
  Expenses of management
  1. In section 76 of the Taxes Act 1988 (expenses of management: insurance companies) in subsection (1) (which applies section 75 of that Act with specified exceptions) before paragraph (a) there shall be inserted—

  "(aa) where the whole or any part of a loss arising to the company in respect of its life assurance business in an accounting period is set off under section 393A or 403(1), there shall be deducted from the amount treated as the expenses of management for that period an amount equal to so much of the loss as, in the aggregate, is so set off, reduced by the amounts by which any losses for that period under section 436. 439B or 441 fall to be reduced under section 434A(2)(b); and

  (ab) section 75(1) shall have effect with the substitution for "in computing profits apart from this section" of—

  "(a) in computing income for the purposes of
  Schedule A, or

  (b) by virtue of section 121(3) in computing income from the letting of rights to work minerals in the United Kingdom"; and".

  Computation of losses and limitation on relief
  2.—(1) In relation to accounting periods beginning on or after 1st January 1996 and ending after 31st March 1996, section 434A of the Taxes Act 1988 (life assurance business: computation of losses and limitation on relief) shall be amended as follows—

  (a) for subsection (2) there shall be substituted the subsection (2) set out in sub—paragraph (2) below; and

  (b) in subsection (2A) (which is inserted by paragraph 23(2) of Schedule 13 to this Act) for "(2)(c)" there shall be substituted "(2)(a)(ii)".

  (2) The subsection (2) set out in this sub—paragraph is as follows—
  "(2) Where for any accounting period the loss arising to an insurance company from its life assurance business falls to be computed in accordance with the provisions of this Act applicable to Case I of Schedule D—

  (a) the loss resulting from the computation shall be reduced (but not below nil) by the aggregate of—

  1200

  (i) the aggregate amount treated as a charge on income in computing for the period, otherwise than in accordance with those provisions, the profits or losses of the company's life assurance business; and

  (ii) any relevant non—trading deficit for that period on the company's debtor relationships; and

  (b) if the whole or any part of that loss as so reduced is set off—

  (i) under section 393A, or

  (ii) under section 403(1),

  any losses for that period under section 436, 439B or 441 shall be reduced to nil, unless the aggregate of those losses exceeds the total of the amounts set off as mentioned in sub—paragraphs (i) and (ii) above, in which case each of those losses shall be reduced by an amount which bears to that total the proportion which the loss in question bears to that aggregate."
  (3) In relation to accounting periods beginning on or after 1st January 1996 and ending on or before 31st March 1996. for subsection (2) of section 434A of the Taxes Act 1988 there shall be substituted the subsection (2) set out in sub—paragraph (2) above, but with the following amendments to paragraph (a), that is to say—

  (a) in the words preceding sub—paragraph (i), the words "the aggregate of shall be omitted;

  (b) in sub—paragraph (i), for "aggregate amount treated as a charge on income" there shall be substituted "amount of interest and annuities treated as charges on income"; and

  (c) sub—paragraph (ii) shall be omitted.

  Spreading of relief for acquisition expenses
  3.—(1) In section 86 of the Finance Act 1989 (spreading of relief for acquisition expenses) in subsection (1), for the words from "less any such repayments" to the end there shall be substituted—
  "reduced by the items specified in subsection (IA) below."
  (2) After that subsection there shall be inserted—
  "(1A) Those items are—

  (a) the appropriate portion of any deduction falling to be made under paragraph (aa) of subsection (1) of section 76 of the Taxes Act 1988 for the period in question;

  (b) any such repayments or refunds falling within paragraph (c) of that subsection as are received in that period;

  (c) any reinsurance commissions falling within paragraph (ca) of that subsection. (1B) For the purposes of paragraph (a) of subsection (1A) above, "the appropriate portion" of the deduction there mentioned is the amount which bears to the whole of that deduction the proportion which the acquisition expenses, without making the reduction required by subsection (1) above, would bear to the whole of the expenses of management, without making the deductions required by paragraphs (aa), (a), (c) and (ca) of section 76(1) of the Taxes Act 1988."

  Ascertainment of losses
  4. In section 83 of the Finance Act 1989 (receipts to be brought into account) for subsection (3) (ascertainment of losses) there shall be substituted—
  "(3) In ascertaining whether or to what extent a company has incurred a loss in respect of that business in a case where an amount is added to the company's long term business fund as part of or in connection with—

  (a) a transfer of business to the company, or

  (b) a demutualisation of the company not involving a transfer of business,

  that amount shall (subject to subsection (4) below) be taken into account, for the period for which it is brought into account, as an increase in value of the assets of that fund within subsection (2)(b) above.
  (4) Subsection (3) above does not apply where, or to the extent that, the amount concerned—

  (a) would fall to be taken into account as a receipt apart from this section,

  (b) is taken into account under subsection (2) above otherwise than by virtue of subsection (3) above, or

  (c) is specifically exempted from tax.

  (5) Any amount which is to be taken into account pursuant to subsection (3) above for a period of account shall be so taken into account—

  (a) after the making of any reduction under subsection (6) of section 83AA below in relation to that period, but

  (b) before the making of any reduction under subsection (3) of that section in relation to an accounting period of the company ending in or with that period.

  (6) In subsection (3) above "transfer of business" means—

  (a) a transfer of the whole or part of the long term business of an insurance company in accordance with a scheme sanctioned by a court under Part I of Schedule 2C to the Insurance Companies Act 1982;

  (b) a qualifying overseas transfer, within the meaning of paragraph 4A of Schedule 19AC to the Taxes Act 1988; or

  (c) the making of a contract of reinsurance which, in whole or in part, constitutes or forms part of a total reinsurance by the reinsured, unless the reinsurer under the contract falls within section 439A of the Taxes Act 1988 (pure reinsurance).

  (7) For the purposes of subsection (3)(a) above, a transfer of business falling within subsection (6)(c) above shall be treated as a transfer of business to the company which is the reinsurer under the contract of reinsurance.
  (8) In this section—

  "add", in relation to an amount and a company's long term business fund, includes transfer (whether from other assets of the company or otherwise);

  "demutualisation" means the conversion, under the law of any territory, of a company which has been carrying on insurance business without having a share capital into a company with a share capital, without any change of legal personality;

  "total reinsurance" means the reinsurance (whether effected by a single contract of reinsurance or by two or more such contracts, taken together, whether or not made with the same reinsurer) of the whole, or substantially the whole, of the reinsured's risk—

  (a) under policies of a particular description issued in respect of insurances made in the course of carrying on life assurance business before the making of the contract of reinsurance (or, in a case where there are two or more contracts of reinsurance, the last of them); or

  (b) under contracts of a particular description so made."

  Application of surplus in reduction of certain losses
  5. After section 83 of the Finance Act 1989 there shall be inserted—
  "Amounts added to long term business fund of a company in excess of that company's loss
  83AA.—(1) If one or more relevant amounts are brought into account for a period of account of a company and either—

  (a) the aggregate of those amounts exceeds the loss which, after the making of any reduction under subsection (6) below but before any application of section 83(3) above in relation to that period, would have arisen to the company in that period in respect of its life assurance business, or

  1202

  (b) no such loss would have so arisen, the surplus for that period shall be applied in accordance with the following provisions of this section and section 83AB below.

  (2) In this section—
  "relevant amount" means so much of any amount which is added to the long term business fund of a company as mentioned in subsection (3) of section 83 above as does not fail within any of the paragraphs of subsection (4) of that section;
  "surplus", in relation to a period of account of a company, means (subject to section 83AB(2) below)—

  (a) if the aggregate of the relevant amounts brought into account for that period exceeds the amount of any loss which, after the making of any reduction under subsection (6) below but before any application of section 83(3) above in relation to that period, would have arisen to the company in that period in respect of its life assurance business, the amount of the excess; or

  (b) if no such loss would have so arisen, the aggregate of the relevant amounts brought into account for that period.

  (3) Where, apart from section 83AB(2) below, there is a surplus for a period of account of a company for which there are brought into account one or more relevant amounts which were added to the company's long term business fund as part of, or in connection with, a particular transfer of business, the appropriate portion of the surplus for that period shall be treated as reducing (but not below nil) so much of any loss arising to the transferor company in the relevant accounting period as, on a just and reasonable apportionment of the loss, is referable to the business which is the subject of that particular transfer.
  (4) For the purposes of subsection (3) above, the appropriate portion of the surplus for a period of account of a company is, in the case of any particular transfer of business, the amount which bears to that surplus (apart from any additions by virtue of section 83AB(2) below) the proportion which A bears to B, where—

  A is the aggregate of such of the relevant amounts added to the company's long term business fund as part of, or in connection with, that particular transfer of business as are brought into account for that period, and

  B is the aggregate of the relevant amounts brought into account for that period.

  (5) Any reduction pursuant to subsection (3) above of the loss arising to the transferor company in the relevant accounting period shall be made after—

  (a) the making of any reduction under subsection (6) below, and

  (b) any application of section 83(3) above, in relation to the period of account of that company in which falls the date of the particular transfer of business in question.

  (6) Any loss arising to a company in respect of its life assurance business in a period of account subsequent to one for which there is a surplus shall be reduced (but not below nil) by so much of that surplus as cannot be applied—

  (a) under subsection (3) above;

  (b) under this subsection, in the reduction of a loss arising to the company in an earlier period of account; or

  (c) under section 83AB below, in relation to a transfer of business from the company in that or any earlier period of account.

  (7) Any reduction pursuant to subsection (6) above of a loss arising to a company in a period of account shall be made—

  (a) before any application of section 83(3) above in relation to that period, and

  (b) if the company is also the transferor company in relation to a particular transfer of business, before the making of any reduction under subsection (3) above in

  1203
  relation to that one of its accounting periods which is the relevant accounting period in relation to that transfer.

  (8) A surplus in respect of an earlier period of account shall be applied under subsection (6) above before a surplus in respect of a later period of account.
  (9) All such adjustments to the liability to tax of any person shall be made, whether by assessment or otherwise, as may be required to give effect to this section.
  (10) In this section—
  "add" has the same meaning as in section 83 above;
  "the relevant accounting period" means the accounting period of the transferor company which—

  (a) ends on the date of the transfer of business mentioned in subsection (3) above, or

  (b) if that transfer of business falls within section 83(6)(c) above and no accounting period of the transferor company ends on that date, ends next after that date;

  "transfer of business" has the same meaning as in section 83(3) above;
  "the transferor company" means the company from which the transfer of business mentioned in subsection (3) above is effected.
  (11) A transfer of business falling within section 83(6)(c) above shall be treated for the purposes of this section as a transfer of business from the company which is the reinsured under the contract of reinsurance.
  Treatment of surplus where there is a subsequent transfer of business from the company etc
  83AB.—(1) If an amount is added to the long term business fund of a company as part of or in connection with a transfer of business to the company, or a demutualisation of the company not involving a transfer of business, and—

  (a) there is a surplus for the period of account of the company for which that amount is brought into account,

  (b) at any time after the transfer of business or demutualisation, there is a transfer of business from the company (the "subsequent transfer"), and

  (c) at the end of the relevant period of account there remains at least some of the surplus mentioned in paragraph (a) above which cannot be applied—

  (i) under subsection (3) of section 83AA above,

  (ii) under subsection (6) of that section, in the reduction of a loss arising to the company in an earlier period of account, or

  (iii) under this section. in relation to an earlier subsequent transfer, so much of the surplus falling within paragraph (c) above as, on a just and reasonable apportionment, is referable to business which is the subject of the subsequent transfer shall be applied under this section.

  (2) An amount of surplus which is to be applied under this section shall be so applied by being treated as an amount of surplus (additional to any other amounts of surplus) for the period of account of the transferee company which last precedes the period of account of that company in which the subsequent transfer is effected, whether or not there is in fact any such preceding period of account.
  (3) If, in a case where an amount is treated under subsection (2) above as an amount of surplus for a period of account of a company, the period is not one for which there is brought into account an amount added to the company's long term business fund in connection with the subsequent transfer, subsection (1) above shall have effect in relation to any transfer of business from the company subsequent to that transfer as if an amount had been so added and had been brought into account for that period.
  (4) Any question as to what is a just and reasonable apportionment in any case for the purposes of subsection (1) above shall be determined by the Special Commissioners who shall determine the question in the same manner as they determine appeals; but any person affected by the apportionment shall be entitled to appear and be heard or make representations in writing.
  (5) A surplus in respect of an earlier period of account shall be applied under this section before a surplus in respect of a later period of account.
  (6) All such adjustments to the liability to tax of any person shall be made, whether by assessment or otherwise, as may be required to give effect to this section.
  (7) In this section—
  "add" has the same meaning as in section 83 above;
  "demutualisation" has the same meaning as in section 83 above;
  "the relevant period of account" means the period of account of the company from which the subsequent transfer is effected which consists of or includes the accounting period of that company which—

  (a) ends with the day on which the subsequent transfer is effected; or

  (b) if the subsequent transfer is a transfer of business falling within section 83(6)(c) above and no accounting period of the company ends on that day, ends next after that day;

  "surplus" has the same meaning as in section 83AA above;
  "transfer of business" has the same meaning as in section 83(3) above;
  "transferee company" means the company to which the subsequent transfer of business is effected.
  (8) Where it is necessary for any purpose of this section to identify the time at which a demutualisation of a company takes place, that time shall be taken to be the time when the company first issues shares.
  (9) A transfer of business falling within section 83(6)(c) above shall be treated for the purposes of this section as a transfer of business from the company which is the reinsured under the contract of reinsurance to the company which is the reinsurer under that contract."
  Meaning of "brought into account" in sections 83AA and 83AB
  6.—(1) In section 83A of the Finance Act 1989, in subsection (1) (meaning of "brought into account" in section 83)—

  (a) for "In section 83" there shall be substituted "In sections 83 to 83AB"; and

  (b) for "that section" there shall be substituted "those sections".

  (2) In subsection (2) of that section (the accounts which are recognised for the purposes of that section) for "that section" there shall be substituted "those sections".
  Enactments disapplying section 83(3) of the Finance Act 1989
  7.—(1) The following provisions of the Taxes Act 1988 (each of which provides for section 83(3) of the Finance Act 1989 not to apply in certain cases) shall cease to have effect—

  (a) section 436(3)(aa);

  (b) section 439B(3)(b); and

  (c) section 441(4)(aa).

  (2) In consequence of sub—paragraph (1)(b) and (c) above, the word "and" shall be added at the end of section 439B(3)(a) and section 441(4)(a) of the Taxes Act 1988.
  Overseas life insurance companies
  8.—(1) Schedule 8A to the Finance Act 1989 (modifications of sections 83 and 89 in relation to overseas life insurance companies) shall be amended in accordance with the following provisions of this paragraph.
  (2) In the Heading "Modifications of sections 83 and 89 in relation to overseas life insurance companies" after "83" there shall be inserted "to 83A".
  (3) In paragraph 1(1), for "sections 83 and 83A" there shall be substituted "sections 83 to 83A".
  (4) In paragraph IA, in sub—paragraph (4)—

  (a) for the words from "being transferred" to "added to that fund" there shall be substituted "being added to the company's long term business fund"; and

  (b) in the second sentence, for "a transfer" and "transferred" there shall be substituted respectively "an addition" and "added".

  (5) After that sub—paragraph there shall be added—
  "(5) Any reference in section 83AA(2), (3) or (4) or 83AB(1) or (3) to an amount being added to the relevant company's long term business fund shall be construed in accordance with sub—paragraph (4) above."
  (6) In paragraph 1C(4), for "transfer" there shall be substituted "addition".

  Transitional provisions
  9.—(l) In the application of section 83AA or 83AB of the Finance Act 1989 in a case where one or more relevant amounts added to a company's long term business fund on or before 25th March 1996 are brought into account for a period of account beginning on or after 1st January 1996—

  (a) the amount of any loss which, before any application of section 83(3) of that Act in relation to that period, would have arisen to the company in that period shall be treated as reduced (but not below nil) by the aggregate of those relevant amounts; and

  (b) except as provided by paragraph (a) above, those relevant amounts shall be disregarded.

  (2) In the application of sub—paragraph (1) above in relation to an overseas life insurance company, any reference to an amount added to a company's long term business fund shall be taken as a reference to any assets which became assets of the long term business fund of an overseas life insurance company used or held for the purposes of the company's United Kingdom branch or agency, having immediately previously been—

  (a) held by the company otherwise than as assets of that fund, or

  (b) used or held otherwise than for those purposes.

  (3) If the relevant accounting period mentioned in subsection (3) of section 83AA of the Finance Act 1989 is a period beginning before 1st January 1996, only the appropriate portion of the eligible loss shall be reduced pursuant to that subsection; and for the purposes of this sub—paragraph–

  (a) "the eligible loss" means so much of the loss arising to the transferor company in the relevant accounting period as, on a just and reasonable apportionment of the loss for the purposes of that subsection, is referable to the business which is the subject of the particular transfer of business in question; and

  (b) "the appropriate portion" of the eligible loss is the amount which bears to the eligible loss the proportion which A bears to B where—

  A is the number of days in the relevant accounting period which fall on or after 1st January 1996; and

  B is the total number of days in the relevant accounting period.

  (4) Paragraph 10(2) below shall not prevent—

  (a) an amount of surplus for a period of account of a company beginning on or after 1st January 1996, or

  (b) an amount of surplus for any period of account of a company which, by virtue of the operation of this subparagraph, derives from an amount of surplus falling within paragraph (a) above,

  from being treated by virtue of section 83AB of the Finance Act 1989 as an amount of surplus for the period of account of another company last preceding its earliest period of account ending on or after 1st January 1996 (whenever beginning) or from being applied accordingly under section 83AA(6) or 83AB of that Act.
  (5) In this paragraph—

  "add" has the same meaning as in section 83 of the Finance Act 1989;

  "brought into account" has the same meaning as it has in sections 83 to 83AB of that Act by virtue of section 83A of that Act;

  "relevant amount" has the same meaning as in section 83AA of that Act;

  "surplus" has the same meaning as in sections 83AA and 83AB of that Act.

  Commencement
  10.—(1) Subject to paragraph 2(1) and (3) above, paragraphs 1 to 3 above have effect in relation to accounting periods beginning on or after 1st January 1996.
  (2) Subject to paragraph 9 above, paragraphs 4 to 8 above have effect in relation to periods of account beginning on or after 1st January 1996.'.—[Mr. Jack.]
  Brought up, read the First and Second time, and added to the Bill.
  No. 63, a new schedule—
  Roll—over relief in respect of ships

  Preliminary
  1. The Capital Allowances Act 1990 shall be amended as follows.

  Amendment of provisions relating to roll-over relief in respect of ships
  2.—(1) In subsection (3) of section 33A (relief limited to expenditure on new shipping incurred or to be incurred by the shipowner), for paragraph (b) there shall be substituted the following paragraph—
  "(b) the amount of any expenditure incurred or to be incurred by qualifying persons in the period of six years beginning with the day on which the event mentioned in subsection (1)(b) above occurs, so far as that expenditure is, or (when incurred) will be, expenditure to which an addition made under this section in respect of that event may be attributed in accordance with subsection (5) below;".
  (2) In subsection (4) of that section (relief not to apply where expenditure on new shipping not incurred by the shipowner within six years), for the words from the beginning of paragraph (b) onwards there shall be substituted the following—
  "(b) circumstances arise in which the whole or any part of the addition ceases (otherwise than by being attributed) to be an amount that may be attributed, in accordance with subsection (5) below, to expenditure on new shipping incurred by qualifying persons in the period of six years mentioned in subsection (3)(b) above,
  the shipowner shall be assumed not to have been entitled to so much of the addition as will not be so attributed."
  (3) For subsection (5) of that section (attribution of relief to expenditure on new shipping) there shall be substituted the following subsections—
  "(5) Subject to subsection (5A) below and to section 33D(6), where—

  (a) an addition is made under this section to the shipowner's qualifying expenditure for the relevant period in respect of his actual trade, and

  (b) expenditure on new shipping is incurred by a qualifying person in the period of six years mentioned in subsection (3)(b) above,

  1207
  the shipowner may, by notice to an officer of the Board, attribute to that expenditure so much of the addition as is equal to so much of the expenditure as is not already the subject of an attribution under this subsection.
  (5A) A notice under subsection (5) above shall not have effect in a case where the shipowner and the qualifying person to whose expenditure the notice relates are not the same person unless that person joins with the shipowner in the giving of that notice."
  (4) After subsection (7) of that section there shall be inserted the following subsection—
  "(8) In this section and the following provisions of this Chapter references to a qualifying person, in relation to any expenditure, are references to—

  (a) the shipowner; and

  (b) where the shipowner is a company, any company which, at the time when the expenditure is or is to be incurred, is or (as the case may be) would be a member of the same group of companies as the shipowner;

  and for the purposes of this subsection two companies are members of the same group of companies at any time if, at that time, they are treated as members of the same group of companies for the purposes of Chapter IV of Part X of the principal Act (group relief)."
  3.—(1) In subsection (1) of section 33C (re—imposition of deferred charge)—

  (a) in paragraph (b), for "the shipowner" there shall be substituted "a qualifying person"; and

  (b) for paragraph (c) there shall be substituted the following paragraph—

  "(c) the expenditure is expenditure the whole or any part of which is expenditure to which the whole or any part of the addition is attributed in accordance with section 33A(5)."

  (2) In subsection (2) of that section—

  (a) the words "to be", in the first place where they occur, shall be omitted; and

  (b) in paragraph (b), for "the shipowner" there shall be substituted "the qualifying person in question".

  4.—(1) In section 33D (definition of expenditure on new shipping), in subsection (1)—

  (a) in paragraph (a), for "the shipowner's actual trade" there shall be substituted "a trade carried on by the person who incurs that expenditure"; and

  (b) in paragraph (b), for "the shipowner" there shall be substituted "that person".

  (2) In subsection (2) of that section—

  (a) in paragraph (a), for "the shipowner" there shall be substituted "the person who incurred the expenditure"; and

  (b) in paragraph (c)(ii), for "the shipowner" there shall be substituted "the person who incurred the expenditure".

  (3) After subsection (2) of that section there shall be inserted the following subsections—
  "(2A) Subject to subsection (2B) below, expenditure incurred by a qualifying person other than the shipowner on the provision of a ship shall not be, and shall be deemed never to have been, expenditure on new shipping if—

  (a) at any time after the time when the ship first belongs to that person in consequence of that expenditure, it ceases to belong to that person without having been brought into use for the purposes of a trade of that person;

  (b) the ship is brought into use for the purposes of a trade of that person and an event falling within section 24(6)(c) occurs with respect to the ship before the end of the period of three years beginning with the time when it is first so brought into use; or

  1208

  (c) there is a time falling—

  (i) after the expenditure is incurred, and

  (ii) where the ship is brought into use for the purposes of a trade of that person, before the end of the period of three years beginning with the time when it is first so brought into use,

  when the shipowner and that person do not fall to be treated as members of the same group of companies for the purposes of Chapter IV of Part X of the principal Act (group relief).
  (2B) Subsection (2A) above shall not apply by virtue of paragraph (a) or (b) of that subsection in any case if the event by virtue of which the case falls within that paragraph is, or is the result of—

  (a) the total loss of the ship; or

  (b) damage to the ship that puts it in a condition in which it is impossible, or not commercially worthwhile, for the repair required for restoring it to its previous use to be undertaken;

  and that subsection shall have effect, where anything falling within paragraph (a) or (b) above occurs, as if times falling after the occurrence of the total loss or, as the case may be, after the occurrence of the damage were to be disregarded for the purposes of paragraph (c) of that subsection."
  (4) In subsection (4) of that section—

  (a) in paragraphs (a) and (b), for the words "the shipowner", in each place where they occur, there shall be substituted "the person who incurred the expenditure"; and

  (b) in paragraph (c)(i), for "the shipowner's actual trade" there shall be substituted "a trade carried on by the person who incurred that expenditure".

  (5) In subsection (6) of that section, for "by the shipowner" there shall be substituted "by a qualifying person".
  (6) In subsection (7) of that section—

  (a) for "any trade previously carried on by the shipowner" there shall be substituted "the shipowner's actual trade"; and

  (b) in paragraph (a), for the words "by the persons for the time being carrying on that trade" there shall be substituted "for the purposes of that trade by the persons for the time being carrying it on".

  (7) For subsection (8) of that section there shall be substituted the following subsection—
  "(8) For the purposes of this section a person is connected with another person at any time if, at that time—

  (a) he is, within the terms of section 839 of the principal Act, connected either with that other person or with a person who is connected with that other person by virtue of paragraph (b) below; or

  (b) he is carrying on a trade previously carried on by that other person in a case in which the only changes in the persons engaged in carrying on that trade between—

  (i) the time when it was previously carried on by that other person, and

  (ii) the time in question,

  are changes in respect of which the trade is to he treated by virtue of section 113(2) or 343(2) of the principal Act as not having been discontinued;
  and the persons who shall be taken for the purposes of this section, in relation to expenditure incurred by a person who is not the shipowner, to be connected at any time with the person by whom the expenditure is or has been incurred shall include every person who at that time is connected (in accordance with the preceding provisions of this subsection) with the shipowner."
  5.—(1) In section 33E (definition of a qualifying ship), after subsection (8) there shall be inserted the following subsection—
  "(9) Subsections (5), (6) and (8) above shall have effect for the purposes of section 33D in relation to any ship on the provision of which expenditure is incurred on or after the

  1209
  passing of the Finance Act 1996 as if the references in those subsections to the shipowner included references to the person incurring that expenditure."
  6.—(1) In section 33F (procedural provisions), in subsection (4)—

  (a) for "An attribution made for the purposes of section 33A(5) or 33C" there shall be substituted "Subject to subsection (4A) below, an attribution in accordance with section 33A(5)"; and

  (b) for "the person giving the notice" there shall be substituted "the shipowner".

  (2) After that subsection there shall be inserted the following subsection—
  "(4A) A notice by the shipowner under subsection (4) above shall not have effect in a case where the shipowner and the qualifying person to whose expenditure the notice relates are not the same person unless that person joins with the shipowner in the giving of that notice."

  Commencement
  7.—(1) Subject to sub-paragraph (2) below this Schedule shall have effect in relation to any case in which the event mentioned in section 33A(1)(b) occurs on or after the day on which this Act is passed.
  (2) Subject to sub-paragraph (3) below, this sub-paragraph shall not apply for the purposes of claims, assessments and adjustments made on or after the day on which this Act is passed but before such day as the Treasury may by order appoint.
  (3) Sub-paragraph (2) above shall not prevent the making on or after the day appointed under that sub-paragraph of any claims, assessments or adjustments in respect of the application of this Schedule, in accordance with sub-paragraph (1) above, in relation to times before that day; and nothing in any provision relating to the period within which any claim or assessment must be made shall prevent any such claim, assessment or adjustment from being made by reference to this Schedule if it is made no more than twelve months after the day so appointed.'.—[Mr.Jack.]
  Brought up, read the First and Second time, and added to the Bill.

Schedule 5

  TAXATION OF SAVINGS AT THE LOWER RATE
  Amendment proposed: No. 1, in page 209, line 24, leave out 'or'.—[Mr. Jack.]
  Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendments Nos. 2 and 3.
  5.15 pm
  Mr. Tim Smith: The amendments deal with an issue that I raised in the Standing Committee, which had to do with the 20p tax on savings and the concern that I raised on behalf of the Association of British Insurers that savings in insurance products should be treated in the same way as others and attract the 20p rate.
  I thank my hon. Friend for making the change.
  Amendment agreed to.
  Amendments made: No. 2, in page 209, line 26, at end insert
  'or
  (c) the policy holders' share of the company's relevant profits is more than the company's BLAGAB profits,'.
  No. 3, in page 209, line 41, leave out 'all its relevant' and insert 'its BLAGAB'.—[Mr. Jack.]

Schedule 8

  LOAN RELATIONSHIPS: SPECIAL COMPUTATIONAL PROVISIONS
  Amendments made: No. 51, in page 218, line 12, after `If, insert—
  '(a)'.
  No. 52, in page 218, line 14, after 'accruing,', insert
  `and
  (b) credits representing the full amount of the interest are not for any accounting period brought into account for the purposes of this Chapter in respect of the corresponding creditor relationship,
  then'.
  No. 53, in page 226, line 29, after 'period', insert ("the relevant period")'.
  No. 54, in page 226, line 32, leave out from 'security' to end of line 35 and insert
  "is available to another company at any time in that period;

  (c) for that period there is a connection between the issuing company and the other company, and

  (d) credits representing the full amount of the discount that is referable to that period are not for any accounting period brought into account for the purposes of this Chapter in respect of the corresponding creditor relationship.'.

  No. 55, in page 226, line 38, leave out from 'that' to end of line 42 and insert
  `every debit relating to the amount of the discount that is referable to the relevant period is brought into account for the accounting period in which the security is redeemed, instead of for the relevant period.
  (2A) References in this paragraph to the amount of the discount that is referable to the relevant period are references to the amount relating to the difference between—

  (a) the issue price of the security, and

  (b) the amount payable on redemption,

  which (apart from this paragraph) would for the relevant period be brought into account for the purposes of this Chapter in the case of the issuing company.'.
  No. 56, in page 226, line 49, leave out 'at any time' and insert 'for the relevant period'.
  No. 57, in page 227, line 1, leave out from beginning to 'one' in line 2 and insert—

  '(a) there is a time in that period or in the period of two years before the beginning of that period when'.

  No. 58, in page 227, line 4, leave out
  at that time, or at any time in those two years'
  and insert
  'there is a time in that period or in those two years when'.—[Mr. Jack]

Schedule 10

  LOAN RELATIONSHIPS: SPECIAL PROVISIONS FOR INSURERS
  Amendments made: No. 35, in page 234, line 35, leave out 'sub-paragraph (5) above' and insert 'this paragraph'.
  No. 36, in page 234, line 51, leave out
  `the company's expenses of management deducted'
  and insert
  `any deductions'.
  No. 37, in page 235, line 7, at end insert—
  `(10A) In sub-paragraph (10) above, the references, in relation to a claim under sub-paragraph (3) above ("the relevant claim"), to deductions by virtue of section 76 of the Taxes Act 1988 for a setoff period are references to the deductions by way of management expenses that would have fallen to be made by virtue of that section for that period if—
  (a) no account were taken of either—

  (i) the relevant claim; or

  (ii) any claim under sub-paragraph (3) above relating to a deficit for an accounting period after the deficit period;

  but
  (b) there were made all such adjustments required by virtue of any sum having been carried back to that set-off period—

  (i) under the Corporation Tax Acts, but

  (ii) otherwise than in pursuance of the relevant claim or of any other such claim as is mentioned in paragraph (a) above.

  (10B) Where—

  (a) in pursuance of a claim under sub-paragraph (3) above any amount is set-off against the eligible profit of a company for any set-off period, and

  (b) there is a section 76(5) amount for that period which is attributable to that claim,

  that section 76(5) amount shall not be carried forward by virtue of section 75(3) of the Taxes Act 1988 but, if that set-off period is the first or second set-off period, sub-paragraph (10C) below shall apply to that amount instead.
  (10C) Where this sub-paragraph applies to a section 76(5) amount for any set-off period, the amount available in accordance with sub-paragraph (5) above to be carried back from that set-off period to be set off against eligible profits of previous set-off periods (or, as the case may be, against the eligible profit of the previous set-off period) shall be treated as increased by an amount equal to the amount to which this sub-paragraph applies.
  (10D) In relation to any claim under sub-paragraph (3) above, the amount which for any set-off period is, for the purposes of this paragraph, to be taken to be the section 76(5) amount attributable to that claim is the amount (if any) by which the amount specified in paragraph (a) below is exceeded by the amount specified in paragraph (b) below, that is to say—

  (a) the amount that would have fallen to be carried forward by virtue of section 75(3) of the Taxes Act 1988 if the claim had not been made; and

  (b) the amount which, after the making of the claim, would have fallen to be carried forward to a subsequent period by virtue of section 75(3) of that Act if sub-paragraphs (10B) and (10C) above, so far as they relate to that claim, were to be disregarded.'.—[Mr. Jack.]

Schedule 13

  LOAN RELATIONSHIPS: MINOR AND CONSEQUENTIAL AMENDMENTS
  Amendments made: No. 66, in page 251, leave out lines 47 and 48 and insert—
  `23.—(1) Where this Chapter has effect in relation to any accounting period in relation to which section 434A of that Act (computation of losses and limitation on relief) has effect without any of the amendments made by paragraph 2 of Schedule (Life assurance business losses) to this Act, subsection (2) of that section of that Act shall have effect in relation to that period with the following amendments, that is to say—'.
  No. 38, in page 259, line 1, leave out 'and (4)' and insert (4) and (4A)'.
  No. 59, in page 259, line 23, at end insert—
  `(4A) The Treasury may by regulations provide for subsection (3) above to apply—

  (a) in the case of trading credits as well as in the case of non-trading credits;

  (b) in the case of any credit ("an insurance credit") in the case of which, by virtue of subsection (4) above, it would not otherwise apply.

  (4B) Regulations under subsection (4A) above may—

  (a) provide for subsection (3) above to apply in the case of a trading credit or an insurance credit only if the circumstances are such as may be described in the regulations;

  (b) provide for subsection (3) above to apply, in cases where it applies by virtue of any such regulations, subject to such exceptions, adaptations or other modifications as may be specified in the regulations;

  (c) make different provision for different cases; and

  (d) contain such incidental, supplemental, consequential and transitional provision as the Treasury think fit.'.

  No. 40, in page 259, line 25, at end insert
  `and
  `trading credit' means any credit falling to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) in accordance with section 76(2) of that Act.'.'.—[Mr. Jack.]

Schedule 21
  SELF-ASSESSMENT: APPEALS
  Amendment made: No. 41, in page 338, line 9, after `England' insert 'and Wales'.—[Mr. Jack.]
Schedule 38

  REPEALS
  Amendments made: No. 11, in page 416, line 14, leave out 'Section 21 (2)(b).'.
  No. 67, in page 431, line 9, at end insert—

  `(22A) LIFE ASSURANCE BUSINESS LOSSES

  Chapter

  Short title

  Extent of repeal

  1988 c. 1.

  The Income and Corporation Taxes Act 1988

  Section 436(3)(aa). Section 439B(3)(b). Section 441(4)(aa).

  1995 c. 4.

  The Finance Act 1995.

  In Schedule 8, paragraph 16(4) and (5).

  These repeals have effect in accordance with paragraph 10(2) of Schedule (Life assurance business losses) to this Act.'.
  No. 64, in page 433, line 34, at end insert—

  `( ) CAPITAL ALLOWANCES: ROLL-OVER RELIEF IN RESPECT OF SHIPS

  Chapter

  Short title

  Extent of repeal

  1990 c. 1.

  The Capital Allowances Act 1990.

  In section 33C(2), the words "to be", in the first place where they occur.

  No. 61, in page 434, line 36, column 3, leave out '"or (c)" and'.
  No. 62, in page 434, line 40, column 3, leave out from '8' to end of line 47 and insert
  `, paragraphs 5 to 7.'.—[Mr. Jack.]
  Order for Third Reading read.
  5.19 pm
  The Chief Secretary to the Treasury (Mr. William Waldegrave): I beg to move, That the Bill be now read the Third time.
  It seems quite a long time since the Budget and it is worth reminding ourselves of the important and interesting matters in the Bill. No doubt, everything that we discussed in Committee and on Report was important, but some matters are rather spectacular. The Bill increases personal allowances by £100 more than indexation. It widens the lower rate tax bands by £700, which is £500 more than indexation. It reduces income tax on savings income to 20 per cent. for basic rate taxpayers and cuts the basic rate of tax to 24 per cent.
  The elite little band of my hon. Friends who are here for Third Reading outnumber the two faithful souls on the Opposition Back Benches, and they are wholly outnumbered by the right hon. Member for Lagan Valley (Sir J. Molyneaux). It is never a surprise to see the right hon. Gentleman in his place and contributing to our debates.
  This important Bill makes significant reductions in capital gains tax and inheritance tax, the threshold of which will he increased by £40,000 more than indexation up to £200,000. That means that the number of estates paying that tax will be reduced by a third. The leader of the party to which the right hon. Member for Lagan Valley belongs, the hon. Member for Upper Bann (Mr. Trimble), has come to reinforce him, and that makes the proportionate representation even more spectacular.
  The Bill's income tax changes will benefit 26 million taxpayers and 14 million savers. Some 220,000 people—low earners and pensioners—will be taken out of tax altogether and more than 6 million people—a quarter of all taxpayers—will pay tax at 20 per cent. The income tax bill of a family on average earnings will be cut by about £235 a year. Those changes will start to appear in pay packets the week after next at the start of the new tax year.
  As the experts on the Committee know, the Bill is not just about personal tax reductions. It modernises— hesitate to say simplifies—the tax system in several important respects and contributes to the Government's aim of a low-tax economy for business as well as for individuals. which is making Britain the enterprise centre of Europe. I shall give one or two quick examples, which will be familiar to hon. Members who are in the Chamber. The Bill legislates for the new landfill tax which, as the Chancellor memorably said, puts a tax on rubbish to enable the tax on people to be lifted a little. That is obviously an environmentally and economically sensible tax.
  The Bill completely updates the arrangements for handling corporate loan relationships. Some members of the Committee will be dreaming about that subject, or perhaps singing about it, in the months ahead. I cannot claim that that is a simple subject but it is now better legislated for.
  There are new measures to encourage participation in employee share ownership schemes, especially for lower-paid staff. That builds on our achievement of helping employees to acquire a true stake in their companies by owning shares in them. The members of the Committee put in a great deal of work and have improved the Bill. Hon. Members from all parties contributed to that but I pay tribute to my hon. Friends in
  1214
  particular. Those who are in the Chamber tabled, and had accepted, amendments that improve the Bill in various ways. Some of those amendments were tabled on Report.
  I shall mention a few of the improvements that the Committee made to the Bill. My hon. Friends, supported by some Opposition Members, made representations about the landfill tax. There were amendments to exempt dredgings from inland waterways and harbours, an issue that we debated yesterday, and to exempt naturally occurring waste from mining and quarrying operations. There were a number of other changes on definitions and on the coverage of that tax, and members of the Committee are to be congratulated on all those improvements.
  I am a leading member of the House of Commons classic car club—I think that I may be the only member apart from its chairman—and I certainly pay a high subscription. Of special interest to me were the representations by Lord Montague of Beaulieu and by others. Lord Montague has pressed us more on this part of our heritage than anyone else, and made representations about historical lorries, fire engines, road rollers and other types of traction engines to which we have extended the Chancellor's exemption. That will bring a great deal of pleasure to many people and will help to conserve an important part of our national heritage.
  On Report, the House debated loan relationships, which is not a subject that one enters into unadvisedly because it is complex and important. We listened to those who mentioned some flaws in the provisions and to more general comments that the anti-avoidance provisions went too far, We made some helpful changes in that area. We made further improvements in the self-assessment measures and adopted the suggestion by my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) on friendly societies to allow them wider access to life insurance policies.
  I have given a selection of the improvements that were made in Committee. We were ably led by my hon. Friends the Financial Secretary and the Economic Secretary and my right hon. Friend the Paymaster General, all of whom worked very hard.
  The United Kingdom economy has been growing steadily for nearly four years, and the recovery over that period has been the most robust of any major European economy. Far from slipping down the world prosperity league, as the Labour party likes to claim, the United Kingdom has closed the gap on many of its competitors. Over the last European cycle, which is the proper measure, United Kingdom income per head grew as fast as that of Germany and faster than those of France, Italy or the European Union average.
  The fundamentals for strong and continuous growth with low inflation remain in place. We are enjoying the longest sustained period of low inflation for almost 50 years and, of course, in the period before that statutory controls and all kinds of wartime controls were in place. The Bank of England's latest inflation forecast shows that underlying inflation in the United Kingdom is more likely than not to be somewhat below 2.5 per cent. in two years' time, which is our target.
  Company profits and the health of corporate Britain have rarely been better. Profits, which are already high, rose by another 6 per cent. in 1995. Investment in plant and machinery manufacturing had a further year of strong

  1215
  growth, and that is very satisfactory. Research that was commissioned by the Treasury shows that our better performance in manufactured exports in the 1990s is likely to come from better quality as well as from price.
  That is an encouraging trend and it is reinforced by the further good news that, although there has not been much investment in new buildings, Britain is doing well in investment in the latest manufacturing machinery. There is a good article in today's edition of the Financial Times about the British machine tool industry, which is a good indicator that firms are investing in the latest machinery. That is good for the future.
  Labour's response to all that is a little confused, because, for an Opposition, it is always pleasant to have bad news to point to so that they can blame their opponents. It is genuinely difficult to argue that there is much wrong with the British economy now or that there will be in the foreseeable future. That was confirmed recently by Lord Desai, professor of economics at the London school of economics. He had an enjoyable exchange by remote control with the hon. Member for Oxford, East (Mr. Smith), in which Lord Desai said:
  "I have talked to people and they are beginning to feel a reduction in the mortgage payment already and what happened today"—
  the latest interest rate reduction—
  "is going to increase that. We just have to be aware, in the Labour party, that these things are happening and it's no good denying them."
  For greater clarification, he concluded:
  "All I am saying is the economy is going to look very good."
  That is not the place from which to attack one's opposition.
  The response of the hon. Member for Oxford, East to that was a little ungracious. He did not try to attack Lord Desai's economics—he would have been unwise to do so: Lord Desai is a Labour party member who is an extremely distinguished man—so the hon. Gentleman accused him of being a peer, and said that he is "an academic economist". Using the word "academic" as an insult is not becoming for someone who represents part of my former university town, but worse than that, the hon. Gentleman said that Lord Desai is a peer, so we need not pay any attention to him.
  The trouble is that it is not Lord Desai's fault that he is a peer; it is the Labour party's fault. It made him a peer, so it is jolly bad luck on the hon. Gentleman to say of Lord Desai, "Well, he's an old fogey. He's not only an academic, but he's a peer. Terrible fellow—you can't pay any attention to him." Lord Desai, not for the first time, has inconvenienced Opposition Front-Bench Members by saying something that is absolutely on the button, which is that the British economy is strong and looks as though it will remain strong and that it is unwise of the Labour party to attack it.
  With its strategy of bringing tax responsibly and steadily down as it can be afforded, improving the tax system, bringing more people into the lower rate tax bands, taking many householders out of the fear of inheritance tax and simplifying and lifting capital gains tax for many people who have built small companies and want to pass them on to their family, the Bill carries forward my right hon. and learned Friend's extremely successful economic strategy, and it does so with the support of the House.
  1216
  Throughout, the Labour party has taken a strong position: it has abstained. I forget who it was, but, in the middle ages, someone once refused the office of the papacy and became known as the great refuser. This year, the Labour party is the great abstainer. On almost any issue we can think of, after grave and careful thought, it abstains. That has been its position before, and probably will be again today. That is a curious position for a party represented by people such as the hon. Member for Bristol, South (Ms Primarolo), who, in my experience, likes not to abstain from things, but to fight at the front of the barricades and who has, for the time being, been suppressed.
  5.32 pm
  Mr. Andrew Smith: No speech from the Chief Secretary to the Treasury is complete without the mandatory attack on my hon. Friend the Member for Bristol, South (Ms Primarolo). He just managed to get it in at the end. He did not, of course, give the complete story of my indirect interchange via the remote screens on "Newsnight" with Lord Desai. The point which I was making was that I had come fresh from talking to my constituents in the Blackbird Leys community centre and that I had much more confidence in what they had to say about the economy and about their being in touch with the realities of job insecurity and downward mobility under this Government than Lord Desai, in what he was quoted as saying.
  As we are on the subject of people who have been appointed to their respective positions by parties on both sides of the House and as the Chief Secretary quotes Lord Desai, I will simply respond by referring to Patrick Minford, who has been appointed not as a peer but as an independent adviser to the Chancellor of the Exchequer. Mr. Minford is not simply criticising. He is saying that the Chancellor should be sacked; he is saying that the Chancellor must go. Ministers should therefore he very careful about quoting Lord Desai at us. One never knows what Patrick Minford will say next.
  As for the Chief Secretary's claims about the Government's economic record, the fact is that Britain has gone from 13th to 18th in the world prosperity league. Under this Government, we have the worst record on job generation in Europe, our share of total European investment has gone down and growth has averaged just 1.9 per cent.—1.7 per cent., if we exclude oil. During the Conservative party's term in office, we have had a worse record on inflation than any country in Europe bar Italy, so we will take no lectures from the right hon. Gentleman and his friends about relative performance compared with Europe. They have nothing to be proud of and they should be apologising to this country's people for their record. not boasting about it.
  On Second Reading, I said that the Bill was profoundly disappointing, even if the sins of omission were greater than those of commission. I said that it had all the hallmarks of a tired and frightened Government who have no new ideas to revitalise a sluggish economy and no vision to bring together a divided society or to embark on the training and investment revolution that Britain needs.
  During the Bill's progress through the House and Committee, we have exposed the fact that this is not a Bill for jobs, investment or fairness. It does nothing to advance the opportunity for everyone to make the most

  1217
  of his or her potential with a true stake in society. It does nothing to build a strong economy or a fair society, still less to recognise how the one depends on the other. As I said, however, those are sins of omission rather than of commission.
  If we judge the Bill for what it contains, we apply a number of categories. There are the things that we welcomed, including the 1 p tax cut, increased personal allowances, the lower savings rate and the introduction of housing investment trusts. There are the things that we supported in principle and sought, with some success, to improve in practice, including the landfill levy and the reform of loan relationships. There are the things about which we remain concerned, including the burdens of self-assessment, especially on the self-employed and small businesses. There are the things that we opposed, such as the extension of personal allowances to residents of the European Economic Area.
  There were also victories. A notable victory was the Government's commitment—the Chief Secretary should not laugh at this; we were pleased that they gave this concession—to uprate in future years the blind person's allowance in line with inflation. That is a long overdue and welcome measure.
  Taking it all together, it would be both contrived and churlish to pretend that there is not a good deal more in the Bill that we support than we oppose. On that basis, we shall possibly disappoint some Conservative Members and certainly disappoint their colleagues in Conservative central office, by not voting against the Bill.
  Under this Government, there have been two significant developments in relation to the Bill's proceedings, aside from its contents, which give us cause for concern. We have, first, the phenomenon of the shrinking Chief Secretary. I have been considering the statistics of Chief Secretaries' contributions to Finance Bill Standing Committees. I find that, for the first decade of Conservative Government, it was normal for a Chief Secretary to notch up more than 20 contributions during those proceedings.
  Peter Rees comes top in terms of contributions, with 31 during the proceedings in 1983 and 1984. When Chief Secretary, the Prime Minister managed 28 contributions in 1987–88, and the right hon. Member for Kingston upon Thames (Mr. Lamont) managed 21 in 1989–90. But since then, a decline has set in. The right hon. Member for Enfield, Southgate (Mr. Portillo) managed 13 in 1992–93 and 18 in 1993–94, but what happened then? Last year, the right hon. Member for South Thanet (Mr. Aitken) managed only seven and, this year, the present Chief Secretary made just three contributions. Perhaps he had other things on his mind.
  Mr. Robert Ainsworth: They were very short contributions.
  Mr. Smith: It is interesting to note that, even as Chief Secretaries' contributions to Finance Bills' proceedings become smaller and smaller, so the Finance Bills become bigger and bigger.
  That is the second serious cause for concern. Parliament has added more than 1,300 pages of primary legislation to taxes Acts in the past five years, and this evening we shall be adding a further 400 pages. It is incumbent on us all in the House—it is a genuine cross-party concern—
  1218
  to find ways in which the process can be simplified, legislation can be made more purposive, perhaps better expressed, and the processes of scrutiny can be improved. As taxes legislation is rewritten, as has been agreed, we will have to consider ways in which hon. Members and the public can contribute to the process.
  What will the Finance Bill be remembered for? Will we remember the first cut in the basic rate of income tax for seven years? I think not. That memory will be tarnished by the Government's imposition of the equivalent—as the Chancellor of the Exchequer admitted—of a 7p rise in the basic rate, and more than 20 increases in taxation since the general election.
  Will the Finance Bill be remembered as a Bill for business? After all, in his Budget speech, the Chancellor engaged in a little theatrics, trailing the income tax cut with the cut in the small companies' rate of corporation tax. Considering how much difference the cut makes to companies and given that they have realised that the VAT threshold has not been uprated in line with inflation and business rates have risen by 5 per cent. more than inflation, I do not think that the Bill will be remembered as great for business.
  Could the Finance Bill be remembered as somehow, in the fantasies of Conservative Members, echoing Lord Lawson's tradition of omitting one tax every Budget? Unfortunately, it cannot, because the Government have introduced a new tax on average in almost every Budget, and certainly in every other Budget. Four new taxes have been introduced in five Finance Acts since the general election, along with 23 tax increases—from the Government who at the election promised to cut taxes year on year. The Bill will not be remembered for tax cutting. Nor will it be remembered, as I have said, as a simplifying Finance Bill.
  The Finance Bill might be remembered for the fact that we have had the third or the fourth attempt at getting self-assessment right. We still have a great deal of concern, however, that self-assessment will not work in the straightforward, simple and unburdensome way that Conservative Members seem to think it will. If the Government will not, even at this late stage, reconsider our arguments for the delay of the introduction of self-assessment for a year, I would at the very least urge them to redouble their provision of advice and support, especially for the self-employed—and small businesses—who will find the introduction of new scheme very onerous, along with, according to the Red Book, the extra £850 million that they will have to pay, which we have debated before.
  I suppose that the Bill might be remembered for the extensive debate on loan relationships. We believe that it was entirely desirable that that complicated area of legislation was reviewed, made consistent and codified. The way in which the matter was handled—there was late consultation, a whole flood of very late and significant amendments without the Opposition or interested parties outside the House being given the opportunity to comment properly—was wholly unsatisfactory. The experience of the House time and again is that, if we legislate in haste, we have to repair the damage later. I will be very surprised if we do not have to revisit the issues of loan relationships and—for the fourth or fifth time—self-assessment, in future Finance Bills.

  1219
  The Finance Bill gives Conservative Members nothing to boast about. It has indeed been a dull and drab Bill, perhaps enlivened only by the number of Conservative Members on the Committee who, as we heard from the Chief Secretary, are members of the classic car club, which left a certain mark on the Bill. The Bill has not, and the Government have not, addressed the issues of substance that affect the wealth, unity, fairness and quality of life of our nation. The Bill is characteristic of the Government who produced it.
  We shall not oppose Third Reading, not because the Bill is what we would have wanted but because its contents include the measures I mentioned earlier, which we support. We do not oppose for the sake of it and we shall not vote tonight. We and the country look forward to the day when we have the chance to introduce a Bill that the country really needs—the Finance Bill of a Labour Government.
  5.45 pm
  Mr. David Hunt: I congratulate my right hon. and learned Friend the Chancellor of the Exchequer on his Budget and the Bill. I applaud the leadership of my right hon. Friend the Chief Secretary in Committee, and I praise the speeches of my hon. Friend the Economic Secretary, my right hon. Friend the Paymaster General. and in particular, my hon. Friend the Financial Secretary. Committee proceedings, Report and Third Reading have been very good. The Finance Bill is impressive and will do much to sustain a non-inflationary period of growth that will underpin the creation of jobs by businesses and our reputation as the enterprise centre of Europe, which I applaud.
  I thought that the speech of the hon. Member for Oxford, East (Mr. Smith) was very inadequate. I realise that he has so little to say. Indeed, in Committee we waited time after time to hear the Opposition's policies. We waited for an inflation target, a growth prediction, some form of alternative economic policy, but came there none. They have therefore been a rather irrelevant Opposition. but happy, smiling, very nice and courteous. I suppose that I cannot criticise them for their personalities and character, but really in politics one has to have a little more. The cosmetics are starting to crumbling and the make-up on new Labour and the Leader of the Opposition is melting.
  I do not know whether, Mr. Deputy Speaker, you have had the chance to see the headline in today's edition of the Evening Standard. It says "Blair Hit by Two Revolts". The article says that the Leader of the Opposition
  "was dealt a wounding double blow today when 50 backbench MPs defied him over a single currency and unions branded his flagship training scheme a `nonsense'."
  We can add a great deal to that. The Opposition are beginning to learn that they cannot just keep opposing and opposing. They have to have some alternative strategy. The Bill represents an agenda for the future creation of jobs.
  When I stepped down from the Cabinet last year, I said that my prime objective was more and better jobs in my area of Wirral. Indeed, unemployment in my constituency fell from 3,215 in February 1993 to 2,947 this time last year, and the latest figures show a further fall to 2,776.
  1220
  Over the last year, unemployment has fallen by 6 per cent. and over the past three years by 14 per cent., but it is still unacceptably high. The Finance Bill will create the right conditions for a continuing fall in unemployment.
  One thing which was said in Committee was wholly wrong—that the social protocol does not apply to small businesses. I am afraid that I shouted from a sedentary position, "Nonsense!" I should have liked to quote verbatim from the protocol. If it had any affect on the Bill's provisions, it would do much to destroy jobs in the small and medium-sized business sector. It would destroy jobs generally, as would a statutory minimum wage. Therefore the only real policies that we have had from the Opposition would destroy jobs. That is why I shall continue strongly to defend my right hon. and learned Friend's Budget, which will do much to restore employment in my constituency.
  5.49 pm
  Mr. Malcolm Bruce: I apologise to the Chief Secretary for not having been here at the start of the debate. The House will understand when I say that I was detained by dealing with the crisis in the beef industry which deeply affects my constituency. The right hon. Member for Wirral, West (Mr. Hunt) says that he wants to promote jobs. I have lost 100 jobs today and I have hundreds more hanging by a thread. Although I believe that we urgently need some definite policies from the Government, I shall not detain the House on that matter now.
  The right hon. Member for Wirral, West said that, if one wished to oppose, one had to have an alternative strategy. The Liberal Democrats do not agree fundamentally with everything that the Government have done—quite the reverse. There are aspects of Government policy that we broadly support, but we have areas of disagreement. We have spelt them out and have said that we would prefer to promote a different strategy.
  I point out, especially to the Chancellor of the Exchequer, that this Third Reading debate comes at a time when the strategy on which the Bill and the Budget are based has moved fundamentally against him. The situation is not as happy as the one that he set out at the time of the Budget. It appears, for example, that the borrowing outturn will be even higher and even more adverse than was originally forecast; the forecast itself was a big upsurge compared with the original forecast. Some of us had little belief that a policy based on a growth outturn of 3 per cent. was likely to deliver 3 per cent., and that likelihood is even less today.
  It was interesting that the hon. Member for Oxford, East (Mr. Smith) said that the Labour party supported the 1 p cut in income tax. I thought that Labour Members abstained on the issue; they now apparently wish that they had voted in favour of the cut. I remind the House that the Liberal Democrats voted against the cut and we do not apologise for having done so.
  Mr. Andrew Smith: Did the Liberal Democrats vote against the cut in Committee? If not, why not?
  Mr. Bruce: We did not because we had made our position clear on Second Reading. To have repeated votes when one knows the outcome wastes the time of Committees and of the House. The hon. Gentleman's intervention is rather silly.

  1221
  We believed that money should be invested in education, and we were prepared to say what our priorities were; there was a perfectly legitimate political difference there. The Government have a different view and they have pursued a different strategy. Nevertheless, the simple economic justification for the 1p income tax cut looks even weaker now than we believed it was when it was introduced.
  The Chancellor knows that much of my argument with him is a result of my belief that we need to get borrowing under control and that, if we have alternative priorities, we must put them within that framework. Even on the Government's economic analysis, a 1p cut in income tax was not justified at the time of the Budget and was driven by political and not economic reasons. I at least appreciate the fact that the Chancellor resisted deeper cuts, which would have left his Government more exposed and more embarrassed now.
  The current crisis in the beef industry adds a further dimension which alters yet again the implications for borrowing and taxation. I do not blame the Government for not anticipating the crisis at the time of the Budget, but I hope that they will recognise that, if a revision of the Budget strategy is required in the national interest, both to ensure that consumers get the encouragement and reassurance they need and to ensure that the industry survives, a substantial amount will be needed to achieve that objective.
  The Prime Minister said during Question Time today that the beef industry employs 650,000 people and has a turnover of £5 billion a year. Every day the Government delay getting the industry moving again, jobs are at risk. I said that I had lost 100 jobs today in my constituency. The companies have said that some of those jobs will not be re-created, but that some of them are lay-offs. However, hundreds more jobs hang by a thread, and that situation is repeated across the country. It is very important that the Government come up with a clear confidence-building package. If there are serious implications for the financial calculations on which the Budget has been based, the Government must be honest enough to say so; they will get support from the Liberal Democrats.
  I hope that the Government will not stand firm for tax cuts at all costs, regardless of the requirements not only of education but of consumer safety and reconstruction of an industry. Governments can often be knocked off course. If this Government put tax cuts ahead of the deeper and wider national interest, they will reap the consequences, because people recognise that the crisis requires some definite action.
  The Liberal Democrats have set out an alternative strategy. In Committee, we identified a number of concerns, especially the future of our whisky industry, the impact of the tax cuts on charities and problems for the disabled and small businesses. Regrettably, we did not get the reaction from Government that we would have wished, but at least the issues were aired. Those who looked at the voting record will see that we took a completely independent line and made our judgment on the individual issues. On a number of occasions, we voted with the Government, and on others we voted with the Labour party, on the merits of the argument.
  I do not believe that on Third Reading the Bill has been improved by the background circumstances. I do not suggest that we should vote against it and I believe that
  1222
  there is a lot in it that needs to be done. We have supported the Government, particularly in their wish to go ahead with self-assessment. I do not doubt for a minute that the Labour party thinks that it is on to something that is an alternative to the poll tax. A major change is bound to cause concern, disruption and confusion.
  However, having embarked on the change and having got people prepared for it, it would not be in anybody's interest to abandon it at this late stage. Although I have no doubt that political mileage can be made out of having tried to delay or oppose the change, I believe that, once such a decision has been made, it is better to get the new system into place, to sort out the problems and to get it working. We have supported the change, in principle, from the outset.
  The Government may well have to announce to the House substantial revision of their Budget strategy in the coming weeks and months. We will not oppose the Bill, but we place on record our criticism of the fundamental basis of the Government's analysis and economic policy, as it is our right to do.
  5.57 pm
  Mr. Christopher Gill: In view of the importance of the next debate and in deference to the Government Whips, I shall make but a brief contribution on Third Reading. It is customary on these occasions for a Back Bencher to pay a tribute of thanks to the members of the Finance Bill Committee for their hard work and diligence in bringing the Bill to the House for Report and Third Reading.
  It is also customary on Third Reading for the hon. Member for Ludlow to say a few words about capital taxation. I thought that this year, we would make a little more progress than we have done. I am grateful for the progress that has been made, but when I heard my right hon. Friend the Prime Minister say, last July, that he intended to abolish inheritance tax and capital gains tax, my heart leaped. On so many occasions in the past, I have said that there is absolutely no justification for those two taxes in a capitalist society and that they should not be perpetuated by a Government comprised of Conservative Members who believe that the reduction and abolition of taxes stimulate wealth creation and lead to greater revenue for the Exchequer in the long run.
  I draw the attention of the House, as is my wont, to the figures for capital gains tax and inheritance tax. For 1994–95, the most recent full tax year, capital gains tax was worth £900 million to the Treasury, a figure exceeded only by the cost of the reliefs and allowances against capital gains tax, which totalled £965 million. Similarly, inheritance tax raised £1.4 billion for the Treasury, after allowing for reliefs and allowances of £365 million.
  The effect of the Government's tax cutting in the past has always been to stimulate additional revenue. What I deplore about the continuation of capital taxes is the enormous amount of time, effort and resource deployed by some of the best brains in the country to try to avoid those taxes and get round them. I also greatly resent the way in which capital taxes tie up financial decisions that would otherwise be made on purely commercial and economic grounds.
  The House would be surprised if I sat down without pointing out that, were it not for the massive contribution that this country makes to the European Community, we

  1223
  could abolish not only capital gains tax and inheritance tax but air passenger duty, insurance premium tax, landfill tax and even stamp duty, too. Would not that be something to sing about as we face an election in the coming year?
  6 pm
  Mr. Paddy Tipping: This is the first year in which I have had a real involvement with the passage of the Finance Bill. I spoke in the Budget debate, I was on the Standing Committee and I am here to the end. This is virgin territory for me—although I had better be careful how I say that.
  Let me give the House an impression of how I found the experience. First, I was astounded by the length of the Bill. Secondly, although I am well educated and relatively articulate, I found working through that Bill extremely hard. I believe that the whole process needs to be simplified. It could be made easier if amendments were not tabled at a very late stage. I appreciate that that is sometimes necessary, but it has certainly made life more difficult. Moreover, legislation passed in haste often has to be revisited. I am already conscious of a whole range of outstanding issues that need to be revisited through amendments to the law, and of many matters that Ministers will consider at a later date.
  Having said that, I thank my hon. Friends on the Front Bench for their tolerance and for helping to educate me. By the way, that does not amount to a promise that I shall ever do it all again—I am getting my retaliation in first.
  One result of my time on the Standing Committee is that I have begun to take a real interest in bingo, and have visited several bingo halls. I have not yet become an addict, but I have come to appreciate what an important role bingo plays. The whole face of gambling has been changed by the national lottery. The Finance Bill accepts that fact, and there have been changes in the football pools and in the duty on betting on racing, but nothing has been done for bingo. Bingo is a populist subject, and I know that future Finance Bills will have to deal with it.
  For the benefit of my Front-Bench colleagues, I simply add that for bingo callers, No. 10 is now "Blair's lair".
  6.3 pm
  Mr. Tim Smith: The hon. Member for Oxford, East (Mr. Smith) rattled off a series of criticisms of the Government's economic achievements. Indeed, he rattled them off so quickly so that it was impossible to intervene, so I now want to pick up one point from his speech. He complained about the Government's record on job creation.
  If there is one measure by which people judge the success or otherwise of a Government's economic policy, it is probably job creation. The Department for Education and Employment has published an excellent book called simply "Jobs".
  Mr. Andrew Smith: I have read it.
  Mr. Smith: I am glad to hear that. If the hon. Gentleman has read the book, he will know that this country has a larger proportion of the adult population in
  1224
  work than any other member of the European Union. He will also know that we have lower unemployment than the average—indeed, we have the lowest unemployment of any of the major members of the EU. In fact, we are on a par with Germany, but the difference between the two countries is the fact that our unemployment is falling while Germany's is rising.
  Why is that happening? If the hon. Gentleman looks at another table in the book, he will see what the on-costs are for every £100 of the direct costs of employing someone, such as wages and salaries. The on-costs are £18 in the United Kingdom, £36 in France and £44 in Germany. Yet the Labour party wants to add even more to payroll costs, directly through the minimum wage and indirectly by introducing the social chapter.
  It is easy to complain about the Finance Bill on the ground that it does not somehow encapsulate a great strategy. However, what it does is add to what has already been done. The process is incremental. For example, the rate of corporation tax is a significant factor when people are deciding whether to invest in the United Kingdom. What was the rate in 1979? It was 52 per cent. What is it today? It is 33 per cent. What was the standard rate of income tax 17 years ago? It was 33 per cent. What is that rate today? It is 24 per cent., with a target of 20 per cent.
  I welcome the fact that the Bill contains incremental changes that have led to substantial reductions in direct taxation. It also contains many other measures that I think were welcome. We had a good Committee stage, and I shall finish by thanking my hon. Friends the Treasury Ministers.
  First, I thank my hon. Friend the Economic Secretary, who dealt so conscientiously with the complex area of loan relationships. Then I thank my right hon. Friend the Paymaster General, who piloted through a completely new tax, the landfill tax. I believe that we now have that about right. My hon. Friend the Financial Secretary dealt with a wide range of income tax matters, and looked with an open mind on several proposals made by hon. Members on both sides of the Committee. I also thank my good friend the doctor—the Lord Commissioner to the Treasury, my hon. Friend the Member for Woodspring (Dr. Fox)—who kept us all in order. I thank all of them for their efforts; the Bill has been improved as a consequence.
  6.6 pm
  Ms Primarolo: The hon. Member for Beaconsfield (Mr. Smith) admitted that he agreed with us that the Budget did not have a strategy. I shall return to that subject, but first I thank my hon. Friend the Member for Sherwood (Mr. Tipping), and agree with him about the length and complexity of the Bill. I think that at times all members of the Committee struggled to get to grips with the intention of many of its clauses. Indeed, the Economic Secretary to the Treasury agreed to allow Opposition Front-Bench spokesmen additional briefings with the civil servants to try to ensure that everything was correct. I am grateful for that.
  We greatly valued the contributions by my hon. Friend the Member for Sherwood. We are pleased that he is so interested in bingo, and hope that he will maintain his interest in Finance Bills, so that he will be an active Member on our side when we are in government, pushing forward Labour's proposals.

  1225
  The right hon. Member for Wirral, West (Mr. Hunt) said that the Budget was about further job creation. I should remind him of the Government's record in that respect: 1.2 million fewer people are in work today than when the Prime Minister took office; 8 million people have had at least one spell of unemployment since the general election. Unemployment under the present Government has doubled, and male unemployment in the United Kingdom is higher than the European average. According to labour market trends, fewer people are in work now than at the time of the general election.
  When we consider the Government's claims to have created new jobs, we see that the facts do not live up to the rhetoric. Among major European countries, since 1979 the UK has had the worst record on job creation. If we consider the situation elsewhere, we see that employment in Japan has grown 18 times faster than it has in the United Kingdom; it has grown 21 times faster in the United States than here.
  On the Government's figures, the annual financial cost of unemployment to the taxpayer is more than £20 billion, and that figure does not include the human misery and insecurity that are attached to it. This Budget does nothing to address those facts. On an interest that the Chief Secretary shares with me, he will note that the Bank of England has today added to the continuing insecurity by announcing the closure of its regional branches in Bristol, Manchester, Newcastle and Birmingham. That means that 150 jobs will go. The Bank of England said in its letter to its employees in those cities:
  "I understand that you will be disappointed wit.. our decision."
  The Chief Secretary referred to the landfill tax. We welcome that tax, but we made it clear in Committee that it needs a great deal of improvement. He referred to the 1 p tax cut. What he forgot to mention is that, since the Conservatives were returned to office in the 1992 general election, there has been the equivalent of a '7p increase in tax. So taxes are 7p up and 1p down, and they expect to be congratulated.
  The Chief Secretary, worse still, forgot to mention the forced rise—an average of 8 per cent.—in council taxes. In the city that he and I represent, the increase has been 12.5 per cent. He forgot to mention increased charges in prescriptions, bus fares and public services. He forgot to mention that, at the most recent Treasury Question Time, he admitted that living standards in this country had fallen in the previous 12 months, yet the Budget does nothing to address that fact.
  The right hon. Gentleman forgot to mention cuts in the energy conservation programme, and that 200,000 homes that would have had insulation and greater energy efficiency will not be insulated. The Government cut the budget for that programme by £30 million. He forgot to mention—as the Government are apparently interested in job creation—that they cut the community action programme, cutting 40,000 jobs for vulnerable, unemployed people desperately seeking work.
  The Finance Bill fails to match up to the challenges facing this country: jobs, investment and fairness. It does nothing for long-term investment. It does nothing to address the central problem: we still have 2.2 million people unemployed, and others suffering huge insecurity at work, which is having a detrimental effect on the housing market.
  1226
  When the Chief Secretary mentioned inheritance tax, he did not mention the 25,000 housing repossessions in the first half of 1995 or the 1.7 million home owners trapped in negative equity. He did not mention that personal debt is still three times higher than it was in 1979 or that, in 1994, we had the lowest inward investment for eight years. He did not mention that Britain is bottom of the league for investment as a share of GDP, and that it has the worst balance of trade figures for more than three years and the lowest share of world trade in a century.
  Britain is 14th in the European Union in balance of trade figures. The Financial Secretary will not mention, because he does not like the facts, that Britain has fallen from 13th to 18th in the world prosperity league.
  We judge the Government on what they have done for jobs, investment opportunities and fairness, and they have failed on each account. The statistics blow apart their pathetic claim to be making Britain the enterprise centre of Europe. They need to be reminded that one in five non-pensionable households have no one in work—trapped in isolation, without hope and without a job. This Budget does nothing for those people.
  Britain needs a strategy to increase productivity, and profitable long-term investment to secure sustainable growth, rising living standards and a quality of life and public services for the future. There is no such investment in the Bill.
  The Government are stumbling from one crisis to another. Their only function is to survive. They are treating this country as if they were a company holding a closing-down sale, in which they are trying to sell off everything in sight. They are bankrupt of ideas, they are incompetent, and it is time that they gave the country the chance to judge them on their record. Their record means that they will be thrown out of office, and that the next Finance Bill will be a Labour Finance Bill.
  6.15 pm
  Mr. Jack: The speech of the hon. Member for Bristol, South (Ms Primarolo) was a tired speech, frot.. fired Opposition. We ran Opposition Members hard in this Finance Bill, and they are now staggering exhausted from the Chamber because of the excellence of our arguments.
  I thank my hon. Friends the Members for Ludlow (Mr. Gill) and for Beaconsfield (Mr. Smith) and my right hon. Friend the Member for Wirral, West (Mr. Hunt) for their kind words and felicitations to my right hon. and hon. Friends and myself on how we dealt with the Bill. We enjoyed working with them on it. We also enjoyed the speech of the hon. Member for Sherwood (Mr. Tipping), who has taken such an interest in bingo, except that my bingo hall's call for No. 10 is "Major's there", and they all shout, "And he's going to stay there for a long time."
  The hon. Member for Bristol, South concluded the proceedings for the Opposition by chastising us on jobs. I am sorry that she has not, while preparing her lengthy oration today, had an opportunity to read my remarks of yesterday in more detail, when I put on record the excellence of what we have done in the sphere of job creation and work, and how our policies in the Finance Bill will deliver even more.
  I have posted a copy of "The UK at Work: Key Facts" to the hon. Member for Oxford, East (Mr. Smith), and I shall do the same for the hon. Member for Bristol, South. To save her a little reading time, however, I shall remind her that

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  "Workforce in employment has increased by 2.0 million since March 1983.
  1.3 million more self-employed than in 1979.
  UK unemployment is lower than EC average … Spain (22.2 per cent.), Ireland (14.67 per cent.), France (11.6 per cent.) and Italy (12.6 per cent.)"
  I am glad that we are down towards the bottom of the European unemployment league. That is a proud record of fact that the Government will stand on and defend in any court that the hon. Lady chooses.
  If we are as bad as the hon. Lady said, how does she account for the fact that we are No. 1 for inward investment in Europe? That investment is still growing, and it will be sustained by this Finance Bill. The Bill makes into law a Budget for confident growth, for the long-term prosperity of this country.
  My right hon. Friend the Member for Wirral, West pointed out one of the missing facts about Labour in relation to the Finance Bill. Its performance was lamentable. One year ago, my right hon. Friend the then Financial Secretary asked Labour Members these questions:
  "Will they spend more or less than a Conservative Government? Will they tax more or less than a Conservative Government? Will they borrow more or less than a Conservative Government?"—[Official Report, 4 April 1995; Vol. 257, c. 1616.]
  Labour Members have had a year to think of answers to those questions, and they have failed so to do. We teased that fact out in the debate on this Finance Bill.
  I thought that we might soon be able to get those answers, because the right hon. Member for Sedgefield (Mr. Blair) is to hold a ballot on his party's manifesto. As a result, 365,000 party members will be consulted on all the Labour party policies, but when it comes to tax and spending, what will those members decide on? Nothing, because those facts and figures will be missing, just as they were during the Opposition's deliberations on the Finance Bill.
  The Opposition's policy on the Finance Bill was, "When in doubt, ask the Government for a report. We don't have any ideas, but we'd love to have some assistance from the quality side of the House with the facts." They proposed reports on Customs and Excise simplification, lower taxation of savings vehicles, charitable events, the environment, shipping and employment. They were all a substitute for any ideas of their own. Their paucity of contribution was lamentable.
  When the Opposition did contribute, what did they do with their time? They did not scrutinise any of the Bill's content on stamp duty. No, they saved their allocation of time to spend well over an hour and a quarter arguing about a simple and beneficial change to keep Britain's motoring heritage on our roads. Such were the Opposition's priorities in Committee. Instead of putting to the test of debate their proposals for a 10p tax and a windfall tax, they evaporated against the searing heat of debate from my right hon. and hon. Friends. I am delighted that the Opposition have now seen the error of their ways.
  The Finance Bill dealt adequately with self-assessment and revealed the depth of our preparations for it. On fairness, the Bill took three more steps towards the introduction of the 20p tax. The Bill's efforts to improve
  1228
  investment are borne out by the most recent survey conducted by the Confederation of British Industry, which showed investment intentions up 9 per cent. in January. We have more than adequately justified our record on jobs.
  As for the Opposition's false accusation about the tax decrease being equivalent to 1 p down and 7p up, let us remember the dishonesty of the Opposition when they published their previous borrowing policies. They disguised tax increases to the tune of lop on the basic rate. The Opposition failed to address that policy proposal. We have addressed the issue of the £850 million in the Red Book. There will be no double tax hit as a result of self-assessment, which will be well administered when it is introduced.
  The Opposition failed in all their attempts to convince the Government of any of their ideas—in fact, they put few ideas before us.
  The Finance Bill takes forward the long-term strategy of my right hon. and learned Friend the Chancellor for the prosperity and growth of the country. The country will be well rewarded when the House passes the Bill into law tonight.
  Question put and agreed to.
  Bill accordingly read the Third time, and passed.

  DELEGATED LEGISLATION
  Motion made, and Question put forthwith, pursuant to Standing Order No. 101(6) (Standing Committees on Delegated Legislation).

  SHERIFF COURT (SCOTLAND)
  That the draft Sheriffdoms (Alteration of Boundaries) Order 1996, which was laid before this House on 8th March, be approved.—
  [Dr. Liam Fox.]
  Question agreed to.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 101(6) (Standing Committees on Delegated Legislation).

  TERMS AND CONDITIONS OF EMPLOYMENT
  That the draft Employment Protection (Continuity of Employment of National Health Service Employees) (Modification) Order 1996, which was laid before this House on 8th March, be approved.—[Dr. Liam Fox.]
  Question agreed to.

  EUROPEAN COMMUNITY DOCUMENTS
  Motion made, and Question put forthwith, pursuant to Standing Order No. 102(9) (European Standing Committees).

  BORDER CONTROLS
  That this House takes note of European Community Document No. 9674/95, relating to controls at the internal frontiers of the Community; agrees that the United Kingdom's frontier controls on the movement of persons are essential for controlling immigration and to help combat terrorism, drug trafficking and other serious crime; agrees that the Government should take whatever steps are necessary to ensure the maintenance of controls at the United Kingdom's frontiers with other member states of the European Union; and therefore supports the Government's opposition to the Commission's proposals.—[Dr. Liam Fox.]
  Question agreed to.

  Bovine Spongiform Encephalopathy
  Motion made, and Question proposed, That this House do now adjourn.[r. Liam Fox.]
  Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Before I call the Minister, I must inform the House that Madam Speaker has placed a 10-minute limit on the speeches of all Back Benchers.
  6.22 pm
  The Minister of Agriculture, Fisheries and Food (Mr. Douglas Hogg): On 20 March, my right hon. Friend the Secretary of State for Health and I came to the House to inform right hon. and hon. Members of the latest advice that we had received from the Spongiform Encephalopathy Advisory Committee regarding bovine spongiform encephalopathy in cattle and its possible link with Creutzfeldt-Jakob disease in humans.
  Our statements addressed three issues: first, the possible relationship between BSE and CJD; secondly, the assessment of the safety of British beef; and, thirdly, the steps that we propose to take further to ensure the safety of British beef.
  I would summarise what my right hon. Friend and I said as follows. First, the most likely explanation of the 10 tragic cases of CJD was exposure to beef before 1989. Secondly, in order to reinforce the already very tough restrictions on the disposal of offal, certain additional steps should be taken—for example, a requirement that all meat from older cattle should be deboned and a ban on the feeding of mammalian feed to all farm animals. Thirdly, provided the controls were vigorously implemented and enforced, the risk of eating British beef was extremely small: or, to use normal language, British beef was safe.
  Last weekend SEAC met again and on Monday it presented further advice to Government. That further advice was reflected in two further statements that my right hon. Friend and I made on 25 March.
  The substance of the further advice that we received was that, first, SEAC confirmed its previous opinion regarding the relationship between CJD and BSE. Secondly, it reaffirmed its opinion that, provided the controls were rigorously adhered to, the risks involved in eating beef were very low. Lastly, in its opinion, the risks to children were no greater than the risks to others. In addition, SEAC made some further recommendations regarding the disposal of offal, which we accept.
  I should like to stand back from the detail to take a broad view. We must ensure that we have the best available scientific advice, which is why we appointed SEAC, an independent committee of experts unsurpassed in their specialty. I pay tribute to the committee for the unstinting and clear way in which it has performed its duties.
  The Government accept that the most likely cause of CJD among the 10 identified cases is exposure to BSE before 1989. We agree entirely with the view that, provided the very tight controls now in place are fully implemented the risks of eating British beef today are extremely small: or, to use ordinary language, British beef is safe.
  Mr. Mike O'Brien: Farmers in my constituency have written to me today because they
  1230
  have heard what the Minister has said, as have many consumers, and there is still a crisis of confidence in British beef. How does he respond to the advice from the farmers of north Warwickshire, who say that the National Farmers Union's proposal for certain slaughtering should be adopted?
  Mr. Hogg: If the hon. Gentleman will forgive me, I will not respond, because I am about to tackle that issue and related ones.
  It is clear that consumer confidence has been damaged and that has led to a collapse in the market. The difficulties have been aggravated by the European Union ban imposed on British exports of beef and beef products, which we believe to be unjustified on the facts, in logic and to have no sound basis in law.
  Mr. Nigel Spearing rose—
  Mr. Hogg: If the hon. Gentleman will forgive me, I want to make a little progress.
  As I have said, the collapse in confidence has caused great damage to the market. That clearly threatens the livelihoods of thousands of farmers and of others in related industries.
  We need to convince the public of what most informed people believe and what is stated by SEAC: that, provided the relevant controls are rigorously adhered to, the risk of eating British beef is extremely small: or, in other words, it is safe.
  I am determined to ensure that the existing specified bovine offal controls are implemented in full. Right hon. and hon. Members will know that, regrettably, lapses have occurred in the past. I have told the House on several occasions how seriously I take those lapses. That is why I called in the slaughterhouse operators on more than one occasion last year, and my hon. Friend the Parliamentary Secretary has done likewise.
  Furthermore, as soon as we had SEAC's recommendations on 20 March, we issued instructions to the Meat Hygiene Service to ensure that the controls are implemented yet more rigorously. I am pleased to say that the audits show a vast improvement. SEAC has recently said that, in its view, implementation is now satisfactory, but we shall certainly remain vigilant.
  Now that we have received the two reports from SEAC, we must proceed as speedily as we can to implement its recommendations. This will involve the laying of orders, some of which must be the subject of consultation. Indeed, it is right that there should be consultation; we are talking about important issues of public health so the details must be right. We are also talking about the livelihoods of people engaged in the relevant industries.
  I am pursuing the following timetable. Orders are being laid today that will have the effect of banning, with effect from tomorrow, the manufacture of feeding stuffs for farm animals using mammalian meat and bonemeal, and extending SBO controls to cover heads and lymph glands. As a temporary measure, I am also banning the sale of meat from newly slaughtered cattle aged over 30 months. This measure will apply until we have in place a procedure for licensing and supervising deboning plans, as recommended by SEAC. I am under a legal obligation to consult on the order introducing those procedures and

  1231
  on a proposed ban on the use of bonemeal in agricultural fertilisers. Despite that statutory obligation to consult, I am proceeding rapidly. The consultation document has been issued, and I intend to make the relevant legislation in the week beginning 15 April.
  The steps that I have set out are recommended by SEAC. It is important to see how we can further reinforce market confidence and what steps we can take to achieve the lifting of the ban imposed by the European Union.
  Mr. Spearing: Will the Minister enlighten the House—if he knows—about which article of the treaty the veterinary committee, the Commission or any Council official is claiming validates the ban on exports to third countries that have not banned those imports?
  Mr. Hogg: The decision of the Commission referred to at least four directives, but it would not be helpful if I were just to read out the directives.
  Mr. Patrick Nicholls: My right hon. and learned Friend will appreciate that consumers can simply walk away from consuming beef if they want to, but for beef farmers the devastation may be total. Will he assure the rural community that, if and when compensation is settled, consideration will be given to the people whose lives, for the most part, have been ruined in a way from which they will probably never be able to recover?
  Mr. Hogg: My hon. Friend correctly states the gravity of the situation, and I do not wish to leave the House under any misapprehension. The Government are fully aware of the gravity of the situation facing the agriculture industry, and we will do all that we properly can to address that crisis. I will make comment specifically on what we can do now, and I will add some general observations on what we may do subsequently.
  Mr. Dafydd Wigley: If I understood the Minister correctly, he said a moment ago that no animal over 30 months old would be killed and put into the food chain. If so, what mechanism is he proposing for farmers who would normally sell those animals to ensure that they retain some of their expected income? Will there be intervention buying? If so, how do the Government propose to dispose of the animals? Does he foresee that happening quickly?
  Mr. Hogg: The order to which I have referred has the effect of preventing cattle over the age of 30 months from entering the food chain, but the hon. Gentleman should remember SEAC's recommendation that animals over that age could come into the food chain provided they did so in a deboned state, the deboning taking place in premises approved for that purpose. The order, which has the prohibitory effect referred to by the hon. Gentleman, is temporary in character and will cover the situation until such time as we can put in place the licensing regime that will enable farmers to sell cattle over the age of 30 months, the meat being in a deboned state. But the meat must be deboned in approved premises, and we are consulting on that.
  Sir Michael Spicer: Will my right hon. and learned Friend give way?
  Mr. Charles Hendry: Will my right hon. and learned Friend give way?
  Mr. Hogg: I shall give way to my hon. Friend the Member for South Worcestershire (Sir M. Spicer) first.
  Sir Michael Spicer: I am not certain from my right hon. and learned Friend's comments whether the Government believe that the Commission's ban on exports to third countries is or is not illegal. If it is illegal, will the Government make representations at the highest possible levels in Turin this weekend?
  Mr. Hogg: I have said that I think that the ban, and the directives on which it was based, has a questionable basis in law, and there are serious arguments to be addressed on its legal aspects. But the truth is that it takes time to get an adjudication on such a matter, and time is what we do not have. My right hon. Friend the Prime Minister will certainly raise the matter in Turin in the most vigorous terms, and I am going to Brussels tomorrow—my officials are there today—to see whether we can agree some measures that may help to restore consumer and market confidence.
  Mr. Hendry: May I refer my right hon. and learned Friend back to the temporary ban on the slaughter of animals aged over 30 months? Is he aware that this is the most expensive time of year for many farmers—the rent is due and they must pay for the next quarter's feedstuffs, among other things? Farmers have no choice but to send their cattle for slaughter at this time of year. What comfort can he give farmers who have to sell at this time of year, but now find that they cannot do so?
  Mr. Hogg: My hon. Friend makes an important point, and I have tried to convey the gravity that the Government attach to the market and financial security of the agricultural community. I have a number of things to say about supporting the agricultural community, but I feel that the best thing would be to make some progress. What I say may help my hon. Friend—I certainly would like to think that it will.
  I have explained the steps that I have put in place to implement SEAC's recommendations, and I said that I hoped to make the relevant legislation in the week beginning 15 April. The steps that I have taken are those recommended by SEAC, but clearly we must explore what more we can do to reinforce market confidence and what steps we can take to achieve the lifting of the ban imposed by the EU.
  To restore consumer confidence and to obtain a lifting of the European ban, we may have to take steps that go beyond those that are strictly necessary on scientific grounds. Officials from my Department are in Brussels today to discuss with Commission officials our thoughts on how best to reassure the market and lift the European Union ban. I will go to Brussels tomorrow to meet Commissioner Fischler, and we shall prepare the ground for the emergency Agriculture Council that has been called for next Monday.

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  We will also discuss with the industry how best we can collectively restore the confidence of the British consumer. As I have already said, that may involve taking measures beyond those required by the scientific evidence.
  Of course, to re-establish consumer confidence is also to re-establish the market, but there is an immediate problem to be tackled. To address the most immediate issues, I have two announcements to make today.
  The first concerns the problem of the renderers, which is important because, if renderers cannot operate, the slaughterhouse system will seize up and it will be impossible for farmers to sell their beef. Therefore, the Government will make available transitional aid of around £1.5 million per week to help the rendering industry adjust to the changes.
  Although, in the longer term, ruminant protein will not be incorporated in feed rations for farm animals, I am confident that a new and different commercial relationship will be established between renderers, slaughterhouses and farmers. What I am announcing is essentially temporary assistance.
  The second announcement relates to the immediate problem of the young bull calves, for which there is not a market at present. I told the House on 25 March that a European Union market support scheme existed, which could be used to provide aid for the slaughter of young male calves from dairy herds.
  I am announcing today that we shall avail ourselves of that scheme, providing a premium of slightly more than £100 per head on all such calves slaughtered before reaching 10 days of age. That will be reviewed as the market position improves. I estimate that it will be worth some £50 million year to UK farmers. Pending parliamentary approval, which will be sought in a supplementary estimate, the necessary expenditure will be met by repayable advances from the contingency fund.
  The circumstances that I have described today have serious implications for businesses and communities involved in this industry. Therefore, my right hon. Friend the Prime Minister has asked my right hon. Friend the Lord President to examine the consequences with appropriate parliamentary and other ministerial colleagues, which will enable us to make appropriate recommendations.
  My Department has made it a top priority to seek to ensure that livestock payments reach producers as quickly as possible. I am pleased to be able to announce that livestock farmers will receive an extra £35 million in their final headage payments this year. We shall do everything we can to ensure that as many payments as possible are made by the end of next month.
  Mr. Tony Marlow: My right hon. and learned Friend mentioned the scheme for calves and a figure slightly higher than £100. As he knows, bull calves can be worth anything between £50 and £350. How will the scheme work as regards the range of quality in bull calves and how will it operate to ensure that it pans out fairly between farmers?
  Mr. Hogg: The detail should be explored in greater detail later. I am trying to deal with the main concerns that hon. Members have expressed.
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  I recognise that, if the market remains depressed, those measures will not be sufficient in themselves. In my statement on 24 March I referred to the common agricultural policy's mechanisms for market support—in particular, intervention purchases of steer beef and the possibility of aid for the slaughter of older animals.
  Small quantities of beef have been offered to the intervention board this week and I shall press the Commissioner hard tomorrow for those quantities to be accepted. We have also impressed on the Commission the need for a scheme to remove older animals from the market. I am glad to say that the initial response was reasonably positive. I shall certainly pursue the matter tomorrow.
  Mr. Michael Stephen: If the European Union ban on British beef exports turns out to be illegal, as we believe it to be, will my right hon. and learned Friend ensure that compensation for the enormous damage done to British farmers is paid not by the British taxpayer but by the 14 European Governments who supported the ban? If they will not pay, will he give the House an undertaking that he will deduct that amount from our next payment to Europe?
  Hon. Members: Hear, hear.
  Mr. Hogg: My hon. Friend's suggestion has a great deal of support in the House.
  Mr. Alex Salmond: The Minister was dealing with intervention buying. Can we be clear that he is saying that he will remove the blockages in the system, which make widespread intervention buying impossible under the present circumstances? Will he give the House a commitment that he will deal with the problem on the scale that will be required, not just for farmers—although that problem is very serious—but for abattoirs, where stores are building up? Does he understand that he has to remove those blockages if anything is to be left when consumer confidence returns?
  Mr. Hogg: The hon. Gentleman is right to refer to the blockage associated with the intervention scheme and to draw attention to the possibility of enlarging the categories capable of coming into intervention. Those are precisely the sort of issues that officials have been discussing in Brussels, and they are issues that I expect to raise with Commission officials and the Commissioner tomorrow.
  Mr. Cynog Dafis: Will the Minister elaborate a little on whether intervention will apply to carcases that are in slaughterhouses, which are causing an enormous cash flow problem as slaughterhouses have had to pay for animals at high prices and are not able to get rid of them? Will he express his appreciation of the importance of abattoirs, including smaller and medium-sized abattoirs, for the local economy, particularly those in areas where there is no oversupply of such institutions?
  Mr. Hogg: I am not sure of the accurate answer to the hon. Gentleman's question about whether intervention can be applied to carcases or only to live steers. My right

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  hon. Friend the Secretary of State for Health—trespassing off his normal responsibilities—might want to reply to that question, on advice, when he replies to the debate.
  Mr. William Ross: Is the right hon. and learned Gentleman aware that a lot of beef went from Northern Ireland to Europe but was sent straight back again? It is sitting in stores in Northern Ireland, which are almost jammed solid. What will happen to the intervention, if any, for Northern Ireland? Where will it go and how does he expect abattoir owners to survive? They have already paid for that stock and have no money left for anything else. That problem must be dealt with; otherwise, there will be no beef and abattoir industries left.
  Mr. Hogg: The hon. Gentleman asks two important questions. The first relates to the ultimate destination of any meat that may be in warehouses or slaughterhouses and the ultimate destination of any meat that comes into intervention. In a sense, that depends on the state of consumer confidence—and thus market confidence—at the appropriate time. Obviously, there are a number of possibilities. Either the meat can be sold for human consumption or it cannot. Everything will depend on the state of the market when the meat leaves storage or intervention facilities.
  Sir Patrick Cormack rose—
  Mr. Hogg: I would like to deal with this question, after which I will give way.
  On abattoir owners, I have already told the House that my right hon. Friend the Prime Minister is very aware of the ramifications that the crisis could have, not only for farmers—although very importantly for them—but for people across the spectrum of industry and the rural community. He has asked my right hon. Friend the Lord President of the Council and other ministerial colleagues to address those problems with a view to making any proposals that may seem appropriate.
  Sir Patrick Cormack: Does my right hon. and learned Friend agree that, to restore confidence, both at home and abroad, we must soon reach the stage where the only beef on sale is from BSE-free herds and that people know that? Is he working towards that end?
  Mr. Hogg: There are some problems of definition about how to address that question. My hon. Friend raises the basic question of how to restore consumer confidence, which would lead to a restoration of market confidence. That may involve measures that go beyond those already outlined, which, in our judgment, are all that are required by the scientific evidence. However, that is not to say that we may not have to explore further measures. I will give way to my right hon. Friend the Member for Conwy (Sir W. Roberts), after which I will make some progress.
  Sir Wyn Roberts: While I appreciate the immediate and medium-term steps that my right hon. and learned Friend is taking, I am concerned, as was my hon. Friend the Member for South Staffordshire (Sir P. Cormack), about the restoration of confidence,
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  which will not happen until we have eradicated BSE from the entire national herd. Has my right hon. and learned Friend given consideration to the measures necessary to achieve that end?
  Mr. Hogg: Yes, indeed we have. My right hon. Friend will remember the SEAC recommendations that were the subject of the statement on 20 March and its recommendations that dealt with the use of ruminant protein in feed rations for farm animals. He will recall that I have announced today an order prohibiting the incorporation of mammalian protein into feed rations for all farm animals. That is believed to be a most effective way of reducing the incidence of BSE. That is not to say that it will be the only thing that we do, because we clearly have to consider proposals from elsewhere and we will. But that is an important step designed to achieve precisely the objective that my right hon. Friend has identified.
  Mr. Bill Walker: The National Farmers Union of Scotland will be delighted with my right hon. and learned Friend's proposals on intervention because it recognises that agriculture depends on a credit system. Unless we can unclog the finance, as well as the carcasses at the abattoirs, we will not remove the problem. His speech will be welcomed by the National Farmers Union of Scotland.
  Mr. Hogg: I am awfully glad that I gave way to my hon. Friend.
  Mr. John Greenway: I appreciate the line that my right hon. and learned Friend is taking. I have two questions on intervention. Will all cattle that will go to market, or would have gone to market, be included in any intervention arrangements? How quickly does he expect those arrangements to be in place? The news from North Yorkshire is that, unless they are in place in three or four days, the market will completely collapse and many farmers and other related business will face ruin.
  Mr. Hogg: My hon. Friend is right to emphasise the urgency of the position. He will know that the intervention system is intended for young steers and not, if I may put it like this, for the elderly dairy cow. The elderly dairy cow, or any other elderly cow that might become destined for the beef market, is a problem that we may have to address in other ways that will not strictly be under the intervention scheme that he has in mind. I will discuss this and related problems in the course of my meeting with Commissioner Fischler tomorrow.
  I very much welcomed Commissioner Fischler's statement that he would consider means of assisting farmers to overcome the present crisis. As I have said, officials from my Department are in Brussels to discuss with the Commission how best to restore market confidence. I propose to follow up those talks tomorrow. Part of those discussions will include the financial support that may be necessary as a result of the present market turmoil and of any additional measures on which we may agree. We look to the European Union to play its part in resolving this crisis.
  This is a short debate and many hon. Members wish to participate. I have tried to address the main concerns that I know trouble the House.
  Several hon. Members rose—
  Mr. Hogg: I give way to my right hon. Friend.
  Mr. Tom King: Does my right hon. and learned Friend agree that everyone recognises the critical importance of his visit to Brussels and of securing agreement to the lifting of the ban in recognition of the measures that we are taking? That may take a little time; meanwhile, the urgency of the financial situation is manifest for businesses and farms. Will he lend his support to the loudest call possible to banks and other financial institutions to recognise the seriousness of the situation, which farmers and companies have not brought on themselves by their inadequacy, and exercise the maximum restraint?
  Mr. Hogg: My right hon. Friend has expressed the sense of the House very clearly and I endorse what he has said.
  Sir David Steel: I was going to ask exactly the same question. Will the Lord President of the Council's committee deal with that as a matter of urgency on behalf of the Government? After all, the banks have made reasonable profits in recent years and must exercise tolerance and restraint in the interest of the entire rural economy.
  Mr. Hogg: I am sure that my right hon. Friend the Lord President of the Council was pleased to have the right hon. Gentleman's endorsement.
  Dame Elaine Kellett-Bowman: Does my right hon. and learned Friend accept that earlier it was suggested that the next meeting of the vets would be in six weeks' time? That is an awfully long time. Could it not be brought forward to two weeks' time?
  Mr. Hogg: It is a long time, but what I discuss, and what I may agree, with the Commissioner tomorrow may make it possible to have an earlier meeting. That is something to be explored when we see how the discussions are going.
  Mr. Ian Bruce: My right hon. and learned Friend will know that I have been trying for four days to get hold of copies of documents referred to by the hon. Member for Peckham (Ms Harman) on food processing and regulation. Is he aware that the documents to which she referred when she accused the Government of being deregulatory dealt not with the way in which food would be processed but only with testing for salmonella?
  Even more serious, the document makes it clear that that proposal did not come from the Labour party in the first place but from the Government of my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath). The Labour party took no action during the whole of its period in government to consider food processing, and it was left to this Government to bring it in.
  Mr. Deputy Speaker (Mr. Michael Morris): Order. Interventions should be short.
  Mr. Hogg: My hon. Friend makes an important point and clearly has read, as other hon. Members may not
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  have, the report of Sir Richard Southwood, which was published in February 1989. In paragraph 4.28 on page 11, the House will find a careful analysis of the probable causes of the outbreak of BSE.
  My hon. Friend is right to say that it had nothing to do with deregulation. The first regulation was imposed in 1981. There was no regulation in the 1970s: the Conservative Government were the first to impose one. There were draft proposals, but, as my hon. Friend said, they had to do with salmonella. In any event, the temperatures contemplated in the draft regulations were wholly irrelevant to BSE, because they would not have deactivated it.
  Sir Roger Moate: Before concluding, will my right hon. and learned Friend say a little more about his discussions in Brussels? It is obviously right and proper and necessary for him to discuss a number of measures with the European Commission, assuming that that will contribute to lifting the ban. Will he say whether the discussions that he will have about the intervention system and other measures that we intend to put in place will contribute to the lifting of the ban? If he does not secure agreement about the new intervention arrangements, will he confirm that we shall proceed regardless?
  Mr. Hogg: I think that the House agrees that we have two principal objectives. The first, and most important, is the need to restore consumer confidence. If we can do that, the market will recover. Secondly, there is a clear relationship between consumer confidence, market confidence and lifting the ban. Tomorrow I shall explore with Commissioner Fischler the sorts of steps that we propose to take that would, in our opinion, help to restore consumer and market confidence and assist in lifting the ban.
  Mr. George Walden: Will my right hon. and learned Friend give way?
  Mr. Hogg: I think that it will assist the House if I draw the themes together.
  Hon. Members feel very deeply for those who have developed CJD, and for their families. The Government accept that the most likely explanation of CJD in the 10 cases that have been referred to is exposure to BSE before 1989. We are confident that, because of the controls that are now in place and because of our determination to see that they are implemented fully, the risk involved in eating British beef is extremely small: or, otherwise put, British beef is safe.
  We now need to put in place a comprehensive programme to rebuild consumer confidence. That involves ensuring that controls are implemented fully. It may also involve taking measures beyond those that are strictly justified on scientific grounds. We are discussing with Brussels how best to reassure the market, and we shall discuss the same matter with representatives of British industry.
  I have announced two specific measures to address immediate financial problems. If the market remains depressed, we would expect to see the support mechanisms provided under the common agricultural policy come into operation. We stand ready to make

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  further proposals to the House. Above all, the future of that essential part of British agriculture depends on the restoration of public confidence. Our solid and firmly founded conviction is that, for the reasons that I have already given to the House, British beef is safe and can be eaten with confidence. I believe that that opinion can be safely put to the British people.
  7.3 pm
  Dr. Gavin Strang: On Wednesday of last week, the Secretary of State for Health reported to the House that the Spongiform Encephalopathy Advisory Committee—SEAC—had advised the Government that bovine spongiform encephalopathy was the most likely explanation for an apparently new strain of Creuzfeldt-Jakob disease. We are all aware of the gravity of that announcement. The crisis that followed has affected confidence among consumers and within the European Union. It is a crisis over the safety of our beef and a crisis affecting thousands of jobs. The Government's task is to rebuild that confidence.
  Clearly, the Government's first priority must be to keep the BSE agent out of our food. Only when consumers and our European counterparts are satisfied that the necessary measures are in place and are enforced properly will they be confident that British beef is as safe to eat as any other beef in Europe.
  Mr. Marlow: I am grateful to the hon. Gentleman for giving way: he has been much more responsible than many of his colleagues in responding to the problem. If the measures with regard to beef hygiene and the slaughterhouses are carried out and if the new recommendations in the orders put forward by my right hon. and learned Friend are implemented effectively, does he agree that—given that BSE is endemic and is under-reported in other European countries—British beef will be the safest, as well as the best, in Europe?
  Dr. Strang: I agree—if the implication of the hon. Gentleman's intervention is that our aim must be to make our beef the safest in Europe and among the safest in the world. There may have been some under-reporting of BSE cases in cattle in Europe—I cannot claim to be an authority on that subject. However, in my judgment and that of all the experts in the United Kingdom and in Europe, the incidence of BSE is a much bigger problem in the United Kingdom than in any other European Union member state.
  I must advise the Minister that even the Government's most ardent supporters cannot claim that the Government's record will help them in their task of restoring confidence. The necessary measures were not put in place promptly in the past. BSE was first identified in November 1986. It was 20 months before the Government made farmers destroy all cattle showing the signs of BSE. It was not until June 1989—two and a half years after discovering BSE—that the Government announced that they planned to stop the parts of cattle that carried the most BSE agents from entering our foods. It was another five months before the ban was implemented in England and Wales and seven months before it was implemented in Scotland and in Northern Ireland.
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  Farmers did not receive full compensation for the slaughter of cattle suspected of carrying BSE until February 1990. The Government have now admitted that under-compensation during the previous 18 months must have deterred farmers from declaring suspect animals. That is the Government's record: a record of delay.
  Mr. Douglas Hogg: That is not correct. if the hon. Gentleman looks at the response by the Ministry of Agriculture to the Agriculture Select Committee report of February 1990, he will see that that point is addressed expressly. The fact that compensation was limited at that time did not, in the judgment of either the Select Committee or the Ministry, lead to any significant under-reporting—and probably none at all.
  Dr. Strang: I do not accept that, and nor do the majority of those in the industry. If the right hon. and learned Gentleman reads and re-reads the comments by his hon. Friend the Minister with responsibility for agriculture in the Scottish Office, the Earl of Lindsay, in the other place, he will see that he acknowledged that more cattle with BSE went to the slaughterhouses as a result of under-compensation.
  We are not saying that the farmers were particularly devious—although there are good and bad farmers. Looking at it from the farmers' point of view, if they had a borderline case of BSE and they knew that it would cost money—perhaps 50 per cent. of the beast's value—to keep it back from market and turn it over to the authorities, it is human nature to say that it would be okay. We must remember that most farmers at that time did not believe that there was a link between BSE and CJD.
  Once regulations are in place, enforcement is crucial. In September 1995, the Meat Hygiene Service made unannounced visits to 193 slaughterhouses and found failings in the handling of specified bovine offals in 92 of them. Nearly half the abattoirs visited were flouting the rules to protect us from the BSE agent. Those abattoirs have tarnished the reputation of our many excellent abattoirs.
  The Government's explanation for the fact that more than half the new cases of BSE are in animals born after the animal feed ban was imposed is that that ban was not properly adhered to. So the Government's record is not good.
  As soon as BSE was identified, it had to be recognised that a link might appear between BSE and CJD. In February 1989, the Southwood committee advised the Government that the risk of transmission of BSE to humans appeared remote but could not be ruled out.
  The job now is to look ahead; to turn round the current position. The Government's task is to restore confidence in British beef and beef products.
  Mr. Ian Bruce: Great heat has been generated about remarks made by the hon. Member for Peckham (Ms Harman). Will the hon. Gentleman now say, because he was one of the authors of the paper in 1978, that that paper did not deal with the processing of feedstuffs, only their testing, and that testing was not instituted by the Labour Government even though it had been on the stocks for six years, and it took a Conservative Government to introduce any regulations to test the output of feedstuff manufacturers?
  Dr. Strang: I shall be honest with the hon. Gentleman. I shall not go back over the history of what happened in

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  the period 1978 to 1980. The hon. Gentleman is aware of the Labour Government's draft regulation, but I will say the following to the hon. Gentleman, and to the Government: BSE was not known to exist then. The regulations we were discussing related to recycling. The concern then was about salmonella, and there is all the difference in the world between food poisoning and a condition in cattle that might in some circumstances result in CJD in humans. There is a general point about regulation and the need for it, but I shall concentrate on looking ahead.
  Sir Colin Shepherd rose—
  Dr. Strang: I have given way pretty religiously. I want to get on. Many hon. Members want to speak.
  British consumers and producers have a common interest here. Hundreds of thousands of jobs are at stake. As I am sure the House is aware, the Opposition proposed to the Government a series of measures. I wrote to the Minister and laid them before him yesterday. The Minister acknowledged that he had read the letter earlier this afternoon.
  I deeply sorry that the Prime Minister was so dismissive of those proposed measures this afternoon. I intend to take a little time describing those measures and answering the points that the Prime Minister made, because, although I have had the privilege of being a Member of this House for more than 25 years, I have never been so depressed and disappointed by a Prime Minister as I was this afternoon.
  First, we proposed the speedy implementation and enforcement of all the measures, including the new measures that the Minister has announced, to keep the BSE agent out of our food. We referred to the State Veterinary Service and the Meat Hygiene Service. The Prime Minister said that we voted against the setting up of the Meat Hygiene Service. Anyone who understands the history of the Meat Hygiene Service knows that it was created as part of the Government's Deregulation and Contracting Out Bill, and they know that there was a genuine argument.
  I do not impugn the Government's motives, but there was a genuine argument about whether it was better for the meat regulations to be enforced by local authorities or by a new national quango, the Meat Hygiene Service, and the Prime Minister should not have implied, as he did this afternoon, that the fact that we had voted against the Deregulation and Contracting Out Bill meant that we were not concerned about enforcement. On balance, we believed at that time that it would be better to leave the responsibilities with the local authorities. That does not devalue the case we were making for effective enforcement.
  Secondly, we said that we believed that the introduction of a random testing programme for BSE in the brains of cattle going through slaughterhouses, as recommended in 1989 by the scientific committee set up by the Government, the Tyrrell committee, would be of great epidemiological value. What did the Prime Minister say to that? He said that it was irrelevant because
  "we have stopped all brain products that could possibly be infected from entering the food chain."
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  If he is so confident that he has stopped it, is it really so unreasonable to ask for the implementation of a scientific recommendation made in 1989 that there should be random testing of the brains of cattle in the slaughterhouse, just to be sure?
  The third proposal that the Opposition made to the Government was the publication of a full list of all products that contain bovine material. The Prime Minister's response was that this was "already happening". In fact, the Government have not published such a list. All we are saying is that we do not believe that the British people should have to rely on newspapers, helpful as they may sometimes be, for the publication of such a list.
  The fourth proposal that the Opposition made to the Government was that there be a reassessment of the safety of mechanically recovered meat. The Minister assured the House on Monday that such meat had been banned in December. I knew, as I think did other hon. Members who followed these matters, that the ban that the Government had implemented related to meat that was recovered mechanically from the spinal cord. There is other mechanical recovery of beef. All we asked for was a reassessment—a reassessment dismissed by the Prime Minister.
  The fifth proposal that the Opposition made to the Government was encouragement of quality assurance schemes, so that consumers know where their beef comes from, possibly with labelling of products in shops. Hon. Members who follow these matters are aware of voluntary schemes that exist throughout the United Kingdom. The Secretary of State for Scotland will be well aware of the Scottish Quality Beef and Lamb Association and similar schemes; they are purely voluntary.
  The Prime Minister said that that would mean
  "allowing the sale of unsafe beef'.
  He appeared to believe that we were suggesting that some meat would be labelled safe or BSE-free and other meat would be labelled otherwise or unlabelled. Did the Prime Minister really think that? Was it ignorance?
  I am making the point that the advantage of the voluntary scheme is traceability—and any responsible Government would see the relevance and the importance of that against the background of the crisis that we face in relation to BSE in cattle throughout the United Kingdom. That is all that we were proposing—it was a long-term measure; it was not going to alter things overnight—yet it was dismissed by the Prime Minister.
  Mrs. Gwyneth Dunwoody: One of the things that depresses and frightens me about the debate is that many consumers, particularly mums, will be totally bewildered about the priorities of the Government and the priorities of the House of Commons. We are in danger of wiping out our entire beef industry without in any way compensating for the safety and the good health of the majority of our consumers. If we cannot urgently put something in place that is acceptable to the average customer, then, frankly, the amount of money that the Minister of Agriculture has announced for the farming community and for the butchers will be absolutely no use whatsoever.
  Dr. Strang: I welcome the measures announced by the Minister of Agriculture but my hon. Friend is absolutely

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  right: if the market is not restored and if there is not some move back to confidence, the money announced by the Minister will not save us, jobs or the future of our farming.
  My sixth point was the banning from human and animal food of all specified bovine offal—and, of course, I referred to cattle under six months old. The Government subsequently banned some specified offal—they banned the thymus and the intestine. However, they have not banned the brain and the spinal cord in cattle under six months old. I know that the Government's response to that is that there is no scientific recommendation asking them to so do, but I put it to them that—this was one of the Opposition's points—it was a House of Commons Select Committee that recommended that in 1990. Finally, we also made reference to our policy for an independent food standards agency—I shall not go into the detail of the point.
  When the Labour party worked on these measures—I thank the agricultural organisations and the large companies that welcomed them—we did not expect the Minister to stand up and say that the Government would accept all our proposals, but we expected a dialogue, we expected a constructive response and we expected an opportunity to move forward. That is why I was deeply depressed by the Prime Minister's response to my right hon. Friend the Leader of the Opposition this afternoon.
  The Minister of Agriculture is aware, as much as any of us, of the significance of Europe here, and I welcome some of the points that he made. As he knows, I have been critical of the way that the Government reacted to the French decision to halt the movement of beef and beef products when our market had collapsed and to halt the movement of cattle and calves. I have also been critical of the Minister's criticism of the European ban.
  I had the opportunity to speak to the Agriculture Commissioner, Mr. Fischler, on the telephone last night. There is no doubt in my mind that the European Commission wants to help, and I think that the Minister's remarks this afternoon suggest that the Government acknowledge that and I trust that they will secure an agreed package of measures.
  Mr. Nicholas Winterton: Will the hon. Gentleman give way?
  Dr. Strang: No, I will not give way—I would like to, but many hon. Members wish to speak in the debate.
  A lot has been said about slaughtering the national herd. As some hon. Members may be aware, I was with a dairy farmer in Whittington, in the west midlands, who was the proud owner of Flo, a dairy cow with one of the best breeding records in Europe who was worth £65,000 before the crisis. The farmer, Mr. Cope, and his son have a BSE-free herd—they have never had BSE and they have not used any feed with the contaminated protein. Most vets and experts would say that that herd would never develop BSE.
  I put it to the House that the extravagant statements about the complete slaughter of the national herd make no sense. [Interruption.] I acknowledge the Parliamentary Secretary to the Ministry of Agriculture but I am not
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  referring to the hon. Lady or to the Minister of Agriculture. We have to put the slaughtering issue into perspective. I think that the hon. Lady is aware that the question of implementing measures that help us move towards a BSE-free herd is something that is of great importance and concern to the European Commission. We will not get European backing and funding if we are not prepared to move in that direction.
  A complete slaughter of the national herd is not the way to tackle the problem—it is not practical. Do the people who put out the wild idea of a national slaughter understand that we would not produce milk or beef for many years? Perhaps it is a theoretical option, but the idea that we slaughter our herds and buy cattle from elsewhere is ridiculous. Where would we buy it? From France? From the Irish Republic? From Germany, where we know there are some BSE cases? Someone actually suggested to me that they were going to ship in the cattle from New Zealand.
  That is not a practical approach. However, we are aware that a proposed scheme of selective slaughter is on the agenda. The National Farmers Union of England and Wales has proposed that cull cows—both in the dairy and beef herds—will be slaughtered and destroyed when they reach the end of their working lives. We believe that that proposal—which I believe has the support of the majority of farmers and other farming organisations in the United Kingdom—should be implemented if the Government intend to go down the road of the slaughter and destruction of some animals to reduce the risk of any cow with the BSE agent entering our slaughterhouses and its carcase entering the food chain.
  Of course, we are all aware of the policy to destroy any cow that has the BSE symptoms. However, we are concerned that some cows have the BSE agent but do not display the symptoms—usually because they have not had the agent for a sufficiently long time. We believe that there is something constructive about preventing these older cows—which have a high incidence of BSE—from entering the food chain.
  Sir Patrick Cormack: The hon. Gentleman is making a sensible and constructive speech. He is attempting to create a bipartisan policy, and the public expects that. Does he accept that we have our present problem, at least in part, because of the ridiculous, extravagant and hysterical statement by his hon. Friend the Member for Peckham (Ms Harman)? Can we expect a more responsible speech from her this evening?
  Dr. Strang: I do not think that that was a helpful intervention. The Government have blamed Europe for our BSE, they have blamed the media for our BSE and they have blamed the Labour party for our BSE. The Secretary of State for Health—I hope that he will correct me if I am wrong—said that the people, not the cows, were mad.
  I do not think that many people agree with any of those propositions. My hon. Friend was articulating the concern of many people, especially parents, about the important, historic statement on the new cases of CJD.
  I was disappointed by the Prime Minister's response to our proposals, but I welcome the Minister's proposals. I welcome what he said about the renderers. It is absolutely crucial. The rendering plants are to be given

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  £1.5 million a week in aid. The announcement of temporary aid will certainly help. I welcome especially—although they will have to move quickly—the fact that the Government are urgently considering support for the abattoirs. The potential collapse of the abattoirs is far and away the most disturbing factor. If they do not move quickly to support them, there could be a domino effect.
  I note the Minister's announcement of the calf slaughter premium—which has been long standing within European Union regulations—of £100 a bull calf. There will be many sad dairymen and farmers who are being paid £100 to kill their calves.
  By and large, we welcome the measures that have been announced. We shall not nit-pick. We know the scale of the crisis—and it is a crisis. It is the biggest threat to British agriculture and all its associated industries.
  Mr. A. J. Beith: It is the biggest threat to British beef this century.
  Dr. Strang: The right hon. Gentleman is quite right. It is a much bigger threat than foot and mouth disease was in the 1960s.
  My overriding point to the Minister is as follows: only when the necessary measures to keep BSE from our food are in place and properly enforced will confidence in the safety of British beef return to the country and the rest of the world.
  Several hon. Members rose—
  Mr. Deputy Speaker: Madam Speaker has ruled that all Back-Bench speeches shall be restricted to 10 minutes.
  7.31 pm
  Mr. Christopher Gill: I am most grateful to be called so early in such an important debate. First, I must declare my interest as a farmer, a master butcher and a member of the Agriculture Select Committee when it inquired into BSE in 1990.
  As a butcher and a farmer, I must say that the entire meat and livestock industry will be extremely disappointed in the speech of the hon. Member for Edinburgh, East (Dr. Strang). He said very little that would give comfort to that industry at this time of crisis. The hon. Gentleman said that he would do whatever he could to restore confidence in the industry but, with very few exceptions, his proposals have done very little to engender that.
  By and large, I am sure that the whole House will welcome the measures introduced by my right hon. and learned Friend this evening. My only concern—this will be reflected in some parts of the House—is the time scale against which some of the measures will be implemented. At the end of the day—as my right hon. and learned Friend recognised—we are talking about the livelihoods of the hundreds and thousands of people working in the meat and livestock industry.
  Let me take a moment to explain to the House how fragile the economy and finances of the meat and livestock industry are. Even before the latest outbreak of hysteria, there was great concern about the massive over-capacity in the abattoir industry, to the extent that a scheme had been proposed whereby the owners of
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  abattoirs would put money into a kitty that could be withdrawn by those who chose to close their abattoirs. I now fear that the very much reduced throughput in our abattoirs will make it practically impossible for their owners to keep body and soul together, and they will have to close. The knock-on effect on the industry cannot be calculated accurately. It is potentially devastating. Frankly, if the abattoirs are unable to pay the auctioneers and the auctioneers cannot therefore pay the farmers, I leave the House to draw its own conclusions.
  Early-day motion 677—tabled in my name last night and supported by 115 right hon. and hon. Members—mentions the safety of beef, the involvement of the European Union and the payment for consequential loss. I have no doubt that British beef is safe and nor does my right hon. and learned Friend the Minister. In 1990, no proof was submitted to the Select Committee that there was any link between BSE and CJD. There is no positive proof of that link today and the measures that the Government have taken are responsibly based on the acceptance of a remote, but yet unproven, possibility of that link.
  The European Union has disgracefully ignored the scientific evidence. It has totally ignored the findings of SEAC and moved with lightning speed to impose a ban, not just in Europe but worldwide. I doubt whether many hon. Members realised that it is now within the power of the European Union to impose a ban that goes far beyond the European Union. The European Union has precipitated a public relations disaster of unparalleled proportions, and it has been aided and abetted by certain commercial undertakings which, frankly, ought to know better.
  The House will be aware of the advertisement which appeared in this morning's newspapers, in which McDonald's states:
  "We still believe that British beef is safe".
  If McDonald's believe that British beef is safe, why in heaven's name is it not selling it? If that company believes in a market economy—presumably it does, as it is an American company; it comes from the very home of capitalism—why does it not believe in giving consumers the choice between eating British beef and eating other beef? The hypocrisy of the actions of that company defies all possible explanation.
  I shall deal now with consequential loss. There must be compensation for the cattle that will be slaughtered and that will not pass into the food chain. I say to my right hon. and learned Friend the Minister that there can he no horse trading on this in Brussels and no quid pro quos. We have to make it a quite separate and distinct issue. We want compensation from the European Commission for the consequential loss suffered by the meat and livestock industry.
  Mr. Dennis Skinner: It is not their money.
  Mr. Gill: It is not their money—some of it came out of the hon. Gentleman's pocket, and probably a lot more of it came out of mine. If anybody is to pay for the mayhem caused in the industry as a result of a totally irresponsible, unwarranted and unnecessary ban on British beef, it has to be the European taxpayer. When my right hon. Friend the Prime Minister goes to Turin, he must make it quite clear to our colleagues in the European

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  Union that, if they do not pay that compensation voluntarily, it will have to be docked from the huge sum of money that we pay to Brussels each year.
  Mr. Skinner: Now you are talking.
  Mr. Gill: I have a lot more talking to do and I have very little time in which to do it, so I would appreciate fewer sedentary interventions from the hon. Gentleman.
  We are where we are. I see absolutely no point in raking over the coals of past decisions, but that is exactly what the Opposition spokesman did for almost his whole speech. There is no point in trying to best-guess decisions made in the past. Decisions that have been made were not made with the benefit of hindsight; they were made in the light of all the circumstances and all the evidence available at the time. That is not to say that scientific knowledge does not improve or that more scientific data will not become available in future.
  The hon. Member for Edinburgh, East hinted that all this was just a Government responsibility. I tell him that anyone interested in the future of the meat and livestock industry, not to mention the future of the country's whole economy, must come together to help to restore public confidence. It is no good Opposition Members taunting Ministers by asking for assurances that beef is 100 per cent. safe. Nothing on God's earth is 100 per cent. safe, as everybody knows.
  No scientist worth his salt would ever say that anything was 100 per cent. safe. It is virtually impossible to prove a negative, and the Opposition should recognise that. Having recognised it, they should then be prepared to back anyone who will take a responsible view towards restoring confidence. We must work harder together to restore that confidence in a product that is as good as any product in the world, and better than most.
  I want to propose a series of measures, some long-term, some short-term, some immediate. I am glad that the Minister has already dealt with my prime concern—help for the rendering industry, without which the whole meat and livestock industry would come to a grinding halt.
  The Country Landowners Association has called for a scheme to ensure that all cattle culled from the dairy and beef herds are taken off the market with compensation and totally removed from the food chain. The CLA says:
  "Failure to act will have a devastating effect on the livestock and related industries".
  I believe that that is true. I welcome the Minister's measures, as far as they go, and I hope that he will be able to flesh them out as soon as possible.
  The measures proposed by the Government are not justified by the scientific evidence—
  Mr. Deputy Speaker: Order.
  7.42 pm
  Mr. John Home Robertson: I suppose that it was too much to hope that the hon. Member for Ludlow (Mr. Gill) would rise above his Euro-scepticism when debating an issue as serious as this is for the whole rural economy of the United Kingdom—but there we are.
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  I start by declaring my interest. I am a partner in a family farming business which includes 70 beef suckler cows on a traditional, extensively managed Scottish hill farm. We also have a little fold of six pedigree Highland cows. What is more, I represent a large number of livestock farmers—mainly upland farmers in the Lammermuir hills.
  My interest is much more than financial: it is also emotional. Like any stockman or anyone who cares for cattle, I care about the cattle on my farm. I know that that goes for virtually every stockman and farmer in the land. We look after our stock; we tend them every day and in all weathers. We take a pride in producing good, healthy cattle in quality herds. My farm's cows will be calving in the coming month, and I am appalled by the idea that people may regard them as a health risk—and that the slaughter and incineration of such fine healthy animals is being considered.
  The House is entitled to reflect on how we got into this problem. I am sure that I speak for many farmers when I express my personal fury at those in Government and in the feed compounding industry who cut costs by dropping standards to allow the incorporation of unsuitable and inadequately treated animal material in feed supplements. I am nauseated by the thought that some hill cow cobs on the market in the mid-1980s may have contained such material. The labels on the bags of feed never said anything about animal residues, and we should have been able to trust reputable feed manufacturers and Government regulatory bodies to ensure that there was nothing wrong with the concentrate feed we needed to supplement hay or silage in winter.
  Unfortunately, and to the eternal shame of a mad, deregulatory Government, that confidence may have been misplaced. I was a Labour spokesman on agriculture from 1985 to 1990, and I well remember working with my hon. Friends the Members for South Shields (Dr. Clark) and for Caerphilly (Mr. Davies) to press for action to eradicate the menace of BSE when it was first discovered. We wanted better controls of feed and more attention given to research, both to discover to true scale of the problem and to develop ways of achieving early diagnosis. We wanted the Government to try to eradicate BSE, but the Government seemed content to contain it in the hope that it would go away.
  I suggest that that Government were guilty of serious negligence in respect of that aspect of animal and human health, and they stand condemned.
  Now that the crisis has broken, the situation is being further aggravated by the Government's dreadful relationship with our EU partners. All this is undeniable—but the water has flowed under the bridge, and it serves no useful purpose to wallow in recriminations. The whole country will expect this House to deal constructively with the crisis facing the 600,000 people who work in the beef industry. Our task is to restore public confidence in the quality of British beef and to reopen the export markets. The alternative is unthinkable: a deficient diet for our people, a decimated rural economy, and a countryside without grazed pastures and traditional beef herds.
  My hon. Friend the Member for Edinburgh, East (Dr. Strang) set out a constructive agenda with the objective of eradicating BSE. We need the resources and the research, and we need action to establish the true nature and extent of the problem. So let us have fewer

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  bland reassurances from politicians of all colours. What we need are more direct explanations and advice from credible scientists. Let us resolve here and now to follow the best scientific advice with the objective of eradicating the disease. If that means selective, targeted slaughtering, so be it.
  Slaughtering can be targeted. There are detailed records of cases of BSE, and all farmers are required to keep full records of stock movements. So it should not be unduly difficult to find out where cattle come from and where they have gone; and if necessary, to cull particular breeding lines.
  It would be absurd and obscene, as my hon. Friend the Member for Edinburgh, East said, to indulge in slaughtering and incineration of healthy cattle as a stunt for the satisfaction of the press.
  I should like to add a word of special pleading, as the Minister talked about the 30-month cut-off rule for cattle going to the prime beef market. It would be almost impossible for slow-maturing highland or Galloway cattle to be fattened in that time, so there may be a need to pay special attention to certain native breeds.
  I also suggest that the Government have a duty to deal with the immediate crisis facing the 600,000 people who work in the beef industry, from high street butchers right through to the stockmen who live and work in our remotest rural areas. Livelihoods, enterprises and whole communities are facing ruin this week.
  There is also an immediate animal welfare problem. If stock cannot be marketed, they still have to be fed. Many farms must be running out of hay and silage as they wait for the long-delayed spring after a long, cold, difficult winter. So I hope that the Minister will be successful in his endeavours to open up the intervention system for finished cattle. That is required within days, not weeks. I appeal to the Minister also to look at ways of permitting temporary grazing on set-aside land for store cattle in these extraordinary circumstances.
  This crisis is a national disgrace. Some of the best beef cattle in the world are being regarded as a health risk, which is absurd in a country such as Scotland where the incidence of BSE is just 0.03 per cent. of the cattle population and is falling. But consumers are alarmed, the market has collapsed and a massive sector of the rural economy is facing disaster. I fear that it has to be said that Government negligence in the mid-1980s must have contributed to this situation, but the House and the whole nation will not allow the Government to shirk their responsibility now.
  7.50 pm
  Mr. Richard Alexander: The debate takes place against the background of the deepest sense of crisis and unease in our rural areas that I have ever known, probably greater than that during the foot and mouth crisis some 20 years ago. Setting aside for a moment the Labour party's cries that it is all the Government's fault—when does it not say that?—farmers, processors and exporters out there expect the Government and the House to come up with solutions which will preserve our rural way of life and regenerate confidence in British beef in Europe and elsewhere.
  Having seen the way that the European Union has operated in the past week against the weight of scientific evidence—which it has never challenged—I am coming
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  to the view that the two aims are not compatible. Plainly, the Government will try to persuade the EU that our measures are sufficient to restore confidence. However, we must accept that that may be a forlorn hope and that we may have to go it alone, very much along the lines that have been proposed by the National Farmers Union.
  I have never in the House or elsewhere been one of the more strident anti-Europeans, yet Europe's decision, which was taken without a scintilla of evidence, has fed the growing cynicism in the House and outside about Europe and its motives towards Britain. It has performed like a trade protection agency for the farmers of France and Germany and their products. If that were not so, it would impose the same restrictions on food from those countries, which have BSE, as it is now proposing for ours. We all know that all those countries have exactly the same incidence of Creutzfeldt-Jakob disease as well.
  Let this week be a dreadful warning to my right hon. Friend the Prime Minister as he goes about his duties in Turin tomorrow. The country wants no greater integration with a group which treats us like that. In the meantime, the situation continues to drift into deeper crisis. We must consider unilateral action. A wide range of options from total slaughter to selective slaughter is available and my right hon. and learned Friend the Minister of Agriculture today announced one or two interim measures. It is unfortunate that those measures had to be, because cases of BSE notified in Britain have been coming down from 1,000 a week at the height of the disease to 250 a week now. The specified bovine offal ban which was introduced in 1989 has been instrumental in reducing the figures over the past few years.
  The Government's task has not been made any easier by those who are anxious to rubbish British beef. They range from some politicians to some people involved with food—all of whom should know better. The advice from the Consumers Association not to eat British beef was disgraceful—almost as disgraceful as the mealy-mouthed comments from McDonald's, which said in its press release:
  "We believe British beef is safe. However, we cannot ignore the fact that recent announcements have led to a growing loss of consumer confidence in British beef which has not been restored."
  By any understanding of the British language, that means, "British beef is safe but we will lose profits if we continue to use it." Those same people are proposing to import foreign beef products.
  McDonald's would have us believe—I continue from its press release—
  "we have always put our customers first".
  By putting its customers first in that way it is happily signing up for beef and beef products from countries that have BSE, just as Britain does, and CJD, just as Britain does, and have a far less stringent regime of standards within the food chain. As a consumer, I shall be much more cautious about eating burgers from such food chains in future than I would have been in the past.
  People are panicking about recent cases of CJD, but at yesterday's meeting of the Select Committee on Agriculture, we heard evidence from Dr. Robert Will, who is the head of the national CJD surveillance unit at Edinburgh. He said that it was quite wrong to assume that because it was not known for sure how people got CJD, it must be assumed that it was through scrapie or BSE. He continued:

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  "CJD occurs all round the world at about the same incidence in countries that are free of scrapie and free of BSE. Within an individual country they appear to occur completely at random. This has led to the proposition that CJD is not due to any environmental contamination at all but is due to a spontaneous change in the protein in the brain itself, occurring at a random event. We have no good evidence that CJD is caused in any way by cross contamination other than by very special circumstances."
  Therefore on the basis of "no good evidence", our farmers are suffering and will continue to suffer and go under unless measures such as those that my right hon. and learned Friend has announced are continued and improved after he has been to Brussels this week.
  A farmer in my constituency fattens 4,000 beef cattle a year for slaughter and export. He has never seen a case of BSE on his farm or elsewhere. He has never used concentrates or bone meal. For 20 years he has fed his cattle solely on vegetable waste. Just over a week ago, his cattle were worth £1,000 a head. Today, they are perhaps worthless. Such people have done nothing wrong in their professional lives as farmers. They are the backbone of England and the future of a prosperous rural community.
  Intervention has been mentioned but intervention restrictions are harming or could harm farmers, such as the one that I have described. The weight limit for intervention is 370 kg and will not help the exporting beef producer, whose average beast weighs about 450 kg. Payment is often required up front by the intervention board, which takes six weeks to pay. Intervention does not take premium cattle; only average quality cattle.
  If intervention is to work for the good farmer who has done nothing wrong in his professional life, some of those restrictions will have to be amended. I hope that my right hon. and learned Friend the Minister will be able to recommend some of these improvements in his final package. They will help to prevent a disaster of national proportions from which this country may never recover in the lifetimes of many of us. Today's announcements will help, and I wish my right hon. and learned Friend every success in his discussions in Brussels tomorrow.
  7.59 pm
  Mr. Paul Tyler: This week, there has been a steady stream of job losses throughout rural Britain. In the past seven days, the livelihoods of hundreds of thousands of people have been destroyed and, tomorrow, many more will be laid off—I hope temporarily, but who knows? I wonder whether they will be encouraged by what they have heard today, especially on the evening news following Prime Minister's Question Time. I suspect that they will be further depressed.
  Let me quote the statement issued by the St. Merryn Meat Co. yesterday as it announced that 149 staff would be laid off immediately and that a further 2,000 jobs were at risk. I should emphasise that the company is one of the biggest and best meat processors serving the whole of the south-west. It said:
  "We would like to express our total exasperation at the Government's inept handling of the BSE crisis, the Labour Party's political point scoring, with total disregard for the livelihoods of the hundreds of thousands of employees engaged in meat processing and associated food industries which they represent."
  That was reported in The Western Morning News this morning. That view will be echoed by many other people all over Britain tonight; indeed, I suspect that, in their
  1252
  hearts, many hon. Members on both sides of the House will agree with it. It was reflected in the comments earlier of the hon. Member for East Lothian (Mr. Home Robertson).
  There will be plenty of time for investigations—and blame, if need be—and, clearly, the research programme will need to be redoubled to answer the major scientific questions that remain. For example, first, what progress is being made to develop reliable testing of live cattle and why was feed not effectively tested for contamination? Secondly, is maternal transmission of bovine Spongiform encephalopathy—from cow to calf—really impossible? Thirdly, what about lateral transmission in the herd? Are the French right to insist on total infected herd slaughter?
  Fourthly, what is the hard evidence of cross-species transmission'? In particular, what is the exact position with regard to sheep? Fifthly, what is the scientific analysis of the remarkable coincidence of the use of organophosphorous warble fly treatments—OPs—on cattle in the United Kingdom at the same time as BSE developed among our national herd? Could the known effect on the central nervous system make cows more susceptible to BSE? It may not have caused BSE, but it may have triggered it.
  Sixthly, what lessons are to be learned from the overall pressure, to which the farming industry has been subjected, for ever-increasing intensive methods of husbandry'? What are the Government doing—what will they do at the intergovernmental conference starting tomorrow—to reassess the risks of that central strategy of the common agricultural policy?
  I hope that the Government also take note of the increasing support, to which my hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) has already drawn attention this week, for our 1993 proposal for an independent food commission, answerable separately to a Secretary of State, because that is clearly relevant. I note that consumers and farmers' leaders, such as Sir Simon Gourlay, now support us on that issue.
  Over the years, other people and I have put those and many related questions to Ministers. It is not just the research budget that must be re-examined; training, too, will have to be upgraded if the industry is to reorientate its efforts. Rumours in the past few days of economies in ATB Landbase could not be worse timed.
  Those issues, however, require longer-term re-examination. Tonight, we must face the immediate concerns. We must look forward rather than rake over the past. My Liberal Democrat colleagues and I believe that it is time for cross-party and cross-industry consultation and action, not least because that will be essential to impress the European Commission and the other 14 European states that we are in this together.
  As my right hon. Friend the Member for Yeovil (Mr. Ashdown) has repeatedly emphasised to the Prime Minister over the past seven days, we are ready to contribute constructively to the resolution of both the public health and the public confidence issues that were raised by the ministerial statements on BSE and beef.
  As the hon. Members for Newark (Mr. Alexander) and for Ludlow (Mr. Gill) have said, the whole rural economy is in danger. There have been thousands of lay-offs already. Livestock farmers have been hit at their most vulnerable time of year. In the circumstances, many Liberal Democrats, in town and county halls throughout

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  the country, have a special responsibility for these matters, representing as we do, at all levels of government, the difficulties that rural areas have faced during the recession. It is critical that the painstaking, sustained efforts to bring back jobs to those areas are not put at risk. In the next few days, we must improve the local employment position rather than let it be further threatened by what has happened in the past week.
  We believe, therefore, that investigations and recriminations can wait for another day. First, we must deal with the question of public confidence in British beef. To that end, we suggest that the Government must now announce—I do not think that it has happened yet this evening—an explicit, defined and measurable target. What is their objective? The explicit objective should be a "BSE-free" national herd—a return to the ambient and negligible levels before the mid-1980s—within an agreed timetable. It should be possible to aim for that. It cannot be left loose. Nothing less will satisfy public health concerns. Once that is established, the Spongiform Encephalopathy Advisory Committee will have to be mandated to advise on the most comprehensive means of achieving that objective, but the political objective must be here first.
  As we all recognise, the market is governed by sentiment as well as by science. We welcome the positive contributions from the industry led by the National Farmers Union, but with the food industry involved as well. Their recommendations on a selective cull of older cows were made at the same time as our suggestions to the Prime Minister on Monday. There is obviously wide consensus on their necessity. A clear, clean break is necessary if we are to regain confidence in beef.
  Since Monday, a huge range of organisations has specifically endorsed the thrust of our proposals. I have already referred to the NFU and to the other farming unions, with which we have worked closely. I should also mention the Country Landowners Association and the Livestock Industry Support Trust. Even more significant, in terms of restoring market confidence, is the support of the Initiative on Food Marketing because, as the House knows, that body represents the leaders of the food manufacturing, catering and retail industries. In addition, representations from the Consumers Association and the National Consumer Council point in the same direction.
  I understand, but I am disappointed, that, until this evening, the Labour party has not seen fit to support this vital core proposal. I hope that what we heard earlier means that the Labour party has changed its mind. Its previous position was sad—understandable but regrettable. The industry has been disappointed by that. I hope that we can now move on.
  There are various options, and exemptions must be rigorously examined, but they must all have this common aim: the elimination from the human food chain of all beef or cow meat that could possibly have been infected by contaminated feed before the 1989 ban took full effect. The precise timing and monitoring of that process can be the subject of further discussion among us all. At the same time, as the Minister clearly recognises, there must be an immediate package of measures to stabilise the market and to avoid further haemorrhaging of jobs in rural areas.
  We recommend that a statement on the use to which the Government intend to put the intervention scheme for finished cattle is made urgently. Clearly, the ban
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  announced this evening on 30-month-plus cattle, albeit temporary, increases the need for emergency action. As it is imperative to get the market moving again, it may be sensible to consider a top-up price scheme for the immediate future. That is something that the farming unions want the Government to deal with urgently.
  It remains to be seen whether the aid scheme, again announced this evening, for young steers will be sufficient. I hope so, but I doubt it. Of course, stocks in intervention are low and only comparatively recent entries remain, so there is presumably no reason why purchases from abattoirs at an economic price should not be initiated as quickly as possible. The mechanism for ensuring that is surely financially viable, although clearly that will be a subject for negotiation with the European Commission. No doubt the Minister will brief us on his return from Brussels.
  As for the culling and compensation scheme, clearly it will take time to work out, but we believe that it is vital to achieve a decision as fast as possible, commensurate with the essential consultation process that we would require. As carcases will have to be stripped out anyway, we would hope that payments by weight, rather than just by animal, will be possible, thereby ensuring that there can be appropriate compensation for quality stock.
  Since European Union precedents—for example, swine fever in other member states—provided for up to 50 per cent. Brussels funding, surely it must be possible to obtain Commission endorsement very speedily for the proposals that we are suggesting. That could also ensure that other countries' BSE problems, to which reference has been made and which are becoming more and more apparent, will be treated without any discrimination. Our colleagues in the European Parliament pressed last night for assurances on those points, which I hope will prove to be correct. Incidentally, the collapse of beef sales, especially in France, but generally on the continent, may persuade other member states to join us more energetically to restore confidence throughout the Union.
  In the longer term, we must reiterate our conviction that a substantial Government investment in a truly comprehensive UK-wide beef quality assurance scheme is now long overdue. A positive commitment could revive hope of returning public confidence generally, while forming the base for an effective marketing strategy abroad.
  At the same time, we must carefully examine the case for the exemption from culling of herds in which, first, there have been no BSE cases whatever, as the hon. Member for Newark said, and, secondly, absolutely no bought-in cattle cake has been fed to them, which particularly applies to beef suckler herds. In such circumstances, surely the examination of MAFF records and farmers' audited accounts should be sufficient to provide proof. As long as the Government's compensation package is realistic, the motive to cheat will be minimal. Those herds will then provide the nucleus for the expanded beef quality assurance scheme that we require and a tightening up of any compensation arrangements.
  We must all work together energetically for an early reversal of the EU ban. To rely on that happening—incidentally, while it is in place it is just being used as a good target for the Euro-sceptics—seems wildly over-optimistic, not least because its removal would not lead to an immediate resumption of any confidence or trade buying on the continent.

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  In any case, the industry in this country must regain public confidence long before the Union six-week review period is up. The Minister simply cannot afford to come back from Brussels this weekend empty handed. About two thirds of a million jobs are at risk, as the Prime Minister confirmed this afternoon in answer to my right hon. Friend the Member for Yeovil (Mr. Ashdown). The people in those jobs cannot wait months for the export ban to be lifted.
  The root of the problem lies closer to home. Until everybody in the UK—consumers, food retailers and food producers—is enabled to have his or her confidence renewed, export prospects will remain dire. That is why it is our conviction that the development of an agreed package of measures, along the lines that I have set out, is urgently necessary. My right hon. and hon. Friends and I will support and work constructively with the Minister in a programme of action along the lines that I have suggested to restore consumer confidence in the market. We believe that the country deserves nothing less.
  8.13 pm
  Sir Colin Shepherd: In my capacity as Chairman of the Select Committee on Catering, I should report that there appears to be no fall-off in the consumption of beef among hon. Members. That is not a moment of levity, but an important statement on how we in the House feel.
  Hereford and beef are very much synonymous. I took time out today to go to Herefordshire to talk with people there because I wanted to get some first-hand feedback. I spoke to butchers, the public generally, meat processors and farmers. I have heard about all the knock-on effects and will not weary the House by repeating them. I want to tell the Labour party with all the strength that I can muster that there is massive resentment of the politicisation of the issue. Asking why it cannot be sorted out on a common-sense basis instead of it being hyped up was the common thread of what was said to me. That is very important, and I hope that the Labour party hears it.
  The second point made to me concerned the strong resentment of the worldwide ban that has been imposed by the European Commission. That really hurts. People ask what confidence we have that the imported beef constitutes less risk. I have had the pleasure of serving on the council of the Royal College of Veterinary Surgeons for the past 13 years and I have the highest regard for the UK veterinary profession. I do not have quite the same regard for some of the profession's members on the European side of the channel. That does not in any way reduce my European credentials; it is just a matter of perception.
  I also want to know what confidence we can have in the imported product. My hon. Friend the Member for Newark (Mr. Alexander) mentioned that important point in his discourse on McDonald's. I happen to disagree with some amount of what he says about McDonald's, but that is another matter. When my right hon. and learned Friend the Minister attends the emergency Council of Agriculture Ministers this weekend, I want him to demand a wide-ranging review of EU countries' farming practices. I do not think that they are all whiter than white. The problem is wider than the UK. We must know that we are
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  all playing on the same field. I am also asked why we have to take imports of white veal when we do not even agree with the practices adopted in the rearing of those animals.
  Confidence-building measures are what we are about tonight. The hon. Member for Edinburgh, East (Dr. Strang) remarked on the point and I agree with him on it. There are three very important areas. First, it is absolutely fundamental that farmers take scrupulous care in reporting anything worrisome. Secondly, the figures quoted about abattoir operators are alarming, and it is vital that the public should have confidence that meat is handled scrupulously in abattoirs. Thirdly, there should also be confidence in the Meat Hygiene Service inspection. Those three elements are very important, and can be implemented by the industry itself.
  My right hon. and learned Friend has brought forward measures today, but there is a big gap on the question of cull cows, to which other hon. Members have referred. The package is not yet complete. Until a measure on cull cows is in place, it will be difficult to assess any increase in the underlying confidence of the market, the producers and the public. I urge my right hon. and learned Friend to press ahead on that issue as fast as he possibly can, because we need to know where we stand.
  Other points that have already been raised relate to the engendering of BSE-free herds. Although not all herds have been affected, a number that are BSE-free may be so only by the grace of God. We need to develop incentives to finish beef cattle particularly on grass rather than cake. I declare a small interest, in that the Hereford breed of cattle is particularly good at finishing on grass rather than on cake compared with some of its continental successors. The breed has been under threat for some time because of its inability to put on quite the same amount of weight per day as the Charolais or the Limousin, but it is a first-class breed in terms of putting on weight on grass at the finish. It will be helpful if we can encourage finishing on grass as part of the overall package.
  My right hon. and learned Friend the Minister of Agriculture, Fisheries and Food made an important announcement about renderers today. However, I have some questions on that. They need not necessarily be answered today, but I would welcome a letter. First, does the £1.5 million a week to the rendering industry take into account the volume of offal produced by the poultry industry? That is a very relevant question, as an immense amount of offal is produced as part of the poultrymeat production process. If the figure does not take that offal into account, we must rethink the matter.
  Secondly, an order is being produced today for consultation. Will the consultees include the poultry industry, which is all part of the same scene? Thirdly, will the order contain provision for a review mechanism to take into account future developments in rendering, offal handling and the continuing scientific debate?
  Tonight, my right hon. and learned Friend has proposed a number of confidence-building measures, but there are still gaps, and I hope that they will be addressed. I shall meet my farmers and all those involved in the meat industry in Herefordshire tomorrow. I shall listen to what they say and I shall feed back their views to my right hon. and hon. Friends in the hope that they will form part of the useful debate on restoring confidence in the meat industry.
  8.21 pm
  Mrs. Audrey Wise: I may technically have an indirect interest to declare, inasmuch as I am president of the Union of Shop, Distributive and Allied Workers. My overriding interest is in the health of the population and in the interests of all consumers. I do not accept that our prime objective should be the restoration of confidence in the market, because I believe that the objective must be the protection of public health. Furthermore, unless the public are assured that health is the prime objective, whatever we do with the aim of restoring confidence, we shall fail. The perception that what is being done is intended to protect public health is the first prerequisite of any reassurance or any restoration of confidence.
  There has been Government ineptitude for some years. The crisis would have been far less likely to arise if there had been firmer action earlier and if there had been more humility in the face of our massive ignorance. People are tired of hearing bland statements that everything is safe and that the risks are extremely small—statements which are clearly born out of ignorance and which have had to be contradicted from time to time, most recently on 20 March.
  There has been order after order after order; the chronology of events is long. Each order has made certain progress and has introduced certain regulations, but there has always been a tiny step at a time. That approach is inadequate.
  I do not want there to be a panic in that all herds are assumed to be the same. I am sorry that some people feel that because there is such widespread BSE, all our herds are infected. However, I believe that any slaughter policy we institute—I believe that there will have to be such a policy—must differentiate between one herd and another. There are differences which probably result from how cattle have been cared for, reared and fed; there are different practices. That must be acknowledged, because the different practices have led to different results. It should not just be the case that cows over a certain age are slaughtered. If we are to have recognisably BSE-free herds, our objective must be to distinguish between one herd and another.
  It has been said that we do not need to rake over the past. However, one person's raking over the past might be another person's learning from the past. We must learn severe lessons from the lack of enforcement of the regulations on abattoirs. Regulations that are not properly implemented and are not enforced are simply a false reassurance; we are now paying the price for all the false reassurance.
  It is extraordinary that there has been such complacency about the huge failure to comply with the regulations. How can we be assured that future stronger regulations will be complied with when milder regulations have not been complied with in the past? One important way to ensure compliance would have been to treat the non-compliers with great severity. Why have there been no prosecutions? The Minister of Agriculture, Fisheries and Food has said that prosecutions would have made it a criminal matter. Exactly. It is a criminal matter not to have complied with regulations imposed on the handling of meat and meat products in the interests of public safety. If people who did not comply had been criminalised and
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  had paid a penalty, there would have been a lot more compliance a lot sooner, and people would have a lot more confidence in future regulations. That is an important matter.
  The sheer extent of BSE in the herds has astonished and worried people. The fact that, as at 23 February, there were 158,277 cases is very worrying. As at July 1993, there were 100,000 confirmed cases, which means that in the past two and a half years, and a long time after the ban on feeding ruminant remains to ruminants, there have been almost 60,000 more cases. That is why consumers do not have confidence, and who can blame them?
  We need a frank acknowledgement, as some hon. Members have made, of the extent of human ignorance in this matter. We do not know for sure how the disease is transmitted and we do not even know whether it has come from scrapie. We do not know why sheep convey scrapie to lambs, and why cows do not convey BSE to calves. We cannot know whether humans will convey it to babies. It is time that we stopped just saying that everything is safe and that we admitted our great ignorance. Paradoxically, that would help to create confidence. Bland reassurance works for a time, but it then becomes utterly self-defeating. That is what has happened, and that is what is still happening.
  One good thing that was not generally known until a recent parliamentary answer to one of my hon. Friends is that vaccine serum from British cattle was discontinued in 1989. The chief medical officer admitted that there was no actual evidence of risk, but he said that it seemed prudent to take that action. He thought that the industry itself would want to eliminate any theoretical risk.
  That is a sensible attitude. If we wait for proof, it will be too late. Positive proof in such cases is not the same as negative proof, whereby we could all simply say, "It has all worked out well, has it not?" By the time we have positive proof of all the dangers, it will be too late, and we may face something uncontrollable.
  I hope, and I think that I believe, that at this stage the situation is still controllable, and that it would be possible to have a BSE-free herd. I am not a vegetarian; I personally want to be able to have confidence about eating beef. Of course, I would have a lot more confidence in cattle fed on the things on which animals should be fed—those that eat grass and similar natural products. Those are the kind of cattle that we should have, and I think that they are more likely to be found free of BSE.
  That is one reason why I do not want to say, "All herds are suspect. Slaughter them all, according to age," or simply, "Slaughter them all." I do not want that, but what I am looking for is respect for nature, which is so often missing from much of the human attitude to animals We are now seeing the consequences of that kind of carelessness—a carelessness about humanity's relationship with nature—and we cannot afford to continue with it.
  I repeat my belief that our overriding objective must be the protection of human health. When we achieve that, confidence will be restored in the market—but not until then.
  8.31 pm
  Mrs. Ann Winterton: I am grateful for the opportunity to speak briefly in this important debate—a debate that is exceptionally important for our

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  countryside as well as in other ways. I must make it clear that I am attempting the double whammy tonight: I am speaking on behalf not only of myself but of my hon. Friend the Member for Macclesfield (Mr. Winterton). Our constituencies are adjacent and are both rural. Between us, we represent much of the farming community in Cheshire.
  I shall begin by puncturing one or two myths propagated by the media. The first is that the interests of consumers, farmers and the meat and food industry are not synonymous. That idea is almost too ridiculous to repeat. Farmers are consumers. They are not in the business, or life style, of agriculture and farming to provide the nation with food that is not fit to eat. They are as concerned as anyone to produce the best quality food. Indeed, in our part of the world, and in our country, they do—and it is about time that somebody said that.
  Secondly, I shall puncture the myth that the Ministry of Agriculture, has acted only to defend a large and important industry in this country—the conspiracy theory. That idea, too, needs knocking on the head straight away. The reality is the opposite: Ministers and officials have been open and honourable, and at all times have taken the best and latest scientific advice available in the world, let alone in the United Kingdom. It is always easy to be wise with the benefit of hindsight. How many times do we see that happening? Science is moving forward fast, but people must take decisions with the knowledge available to them at the time.
  The next myth that needs to be exploded is that food can be pronounced 100 per cent. safe. What rubbish. We all know that that is not possible. All life is a balance of risks. It is safer for me to travel down to Westminster every week by aeroplane, but I do not. I travel by car more often than not. Every day of our lives when we get out of bed we take risks and assess the balance of risks. We must use those common-sense methods to assess the balance of risk with food.
  Another myth is that scientists have been denied funding. Scientists have been given adequate and more than adequate funding for their needs. I suspect that if they need more and ask for it they will have it. Many scientists reported in the media have their own axes to grind, and they make all sorts of claims. I say to them, "If you have anything to put forward in the debate, put your ideas, theories and research before Professor Pattison and the other members of the Spongiform Encephalopathy Advisory Committee. Put yourselves forward and be judged by your scientific peers." I am not capable of judging whether there is any value in what such people propose; the best scientists in the country are the people to judge and assess.
  The next factor is the role of the media, which has been disgraceful. We have had hype, hysteria and over-reaction, with people being interviewed for the sake of their off-beat views—rent-a-quote, in other words. People are interviewed who are obviously woefully ignorant of the issues and are very concerned. To a certain extent we are a scientifically uneducated and illiterate nation, so people are swept along with the tide and believe what is written in the newspapers, which is based on speculation and scaremongering. That is what has led to the overall crisis of confidence.
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  Next, blame should also be laid firmly at the feet of the European Union. The view taken by the Commission and the subsequent banning of British beef were breathtaking in their arrogance. We now know what we have always suspected—that Europe acts politically, predominantly to protect its own industry. British beef has been making inroads into European markets. What an opportunity for Europe to put a stop to those valuable exports from this country. Who would ever recommend anyone to eat Belgian beef, which is treated with clenbuterol, cortisone and angel dust? People must be really mad to do that.
  The only question that the House needs to answer tonight is how to restore confidence. That is the most vital question of all, and the most difficult to answer. It is vital that the EU is made to reverse its illegal ban as a matter of urgency, and that our other export markets are reassured by the evidence that our beef is entirely wholesome. The EU has caused, aided and abetted market turmoil, and the Government must pull out all the stops to ensure that it is aware of our views.
  The briefing paper from the Country Landowners Association says:
  "We put a clear message to Jacques Santer that European policies should similarly be based on the best scientific evidence".
  The best scientific evidence says that eating our beef is perfectly safe, and that it is perfectly good.
  The Cheshire branch of the National Farmers Union brought out its policy before the national organisation of the NFU. I am delighted about that, because we always try to be one step—I was about to say "in front of the herd", but perhaps I had better not, in the circumstances. The Cheshire branch recommends the culling of what I would call the "old girls" in the dairy herd when they come to the end of their productive lives. They would not go into the food chain but would be incinerated.
  The scientists who appeared before the joint Select Committees yesterday made it clear that meat from such cows caused no health hazard. Frankly, I believe them, but the whole object is to try to restore public confidence, so if such a policy does that, and is thought a worthwhile thing to do, I would support it.
  I remind the House how many people "swing on a cow's tail". I heard that expression last weekend, when my hon. Friend the Member for Macclesfield and I spoke to many consumers and farmers in our constituencies to discuss these issues. The expression is absolutely true, because not only farmers but feed merchants, slaughterers and people in cattle markets and the leather trade, to name but a few, are affected by the situation. Macclesfield has an excellent abattoir, in which huge investment has been made. It is one of the best in the country, and it has been badly affected by what is happening.
  This debate is vital, not only for our countryside and our farming industry but for our economy. It is essential that all political parties and responsible groups stand behind the Government and support the measures that are to be introduced to help confidence. We should give a message to our Minister of Agriculture, Fisheries and Food that, when he goes to Brussels to negotiate on behalf of this nation, whatever he does he must fight his corner hard for Britain and for British beef—the best beef in the world.
  I have never eaten so much British beef as of late, and I can assure the House that, when four of our six grandsons stay with us over Easter, we shall change from

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  having turkey on Easter Sunday to having the biggest bit of British beef that I can get. My grandsons are aged between one and seven, and I do not have a scintilla of doubt of the wholesomeness of what we shall eat—because, of course, I shall cook it superbly.
  8.40 pm
  Mr. William Ross: I have often heard it said that when one sells a house, the one thing that matters is location, location, location. It has become clear to everyone that when one sells beef, what matters is perception, perception, perception. If we all kept that in mind, perhaps we might have rather more light and less of the heat we have had so far.
  I should like to remind hon. Members and those few people who will no doubt read my words that smoking is alleged to be responsible for 110,000 deaths every year and that alcohol is responsible for 40,000 deaths every year. Those figures are broadly agreed and are widely known among the population of the United Kingdom. People are not drinking any less alcohol, and an awfully large number of people—who know the very serious risks they run—are still smoking. Deaths from CJD are minimal, and there is still severe doubt about whether they were caused by eating meat or any meat product, yet there is mass hysteria.
  I do not want to go into all the arguments about assigning responsibility for the hysteria to hon. Members or members of the press—people can draw their own conclusions—but I will say that the fear is not at all rational. Fear has arisen in people's minds because, above all things, they fear for their children and they fear brain decay. I think that most of us have had elderly relatives who slowly sank into senile dementia for one reason or another and said, "I hope I never go like that." We have an irrational fear that eating meat might cause such a condition. I do not believe it.
  I would be the first to admit that it is almost impossible to prove a negative. Therefore, as many hon. Members have said in this debate, we are not dealing only with scientific evidence, because the situation has gone far beyond that. Essentially, we now need a public relations exercise and—I suggest to Ministers—an education exercise for the public and the consumer. We must repeat the facts again and again. Among the facts are that there are nearly 160,000 confirmed cases of BSE in the United Kingdom. Ministers will no doubt recall that a parliamentary answer given to me at the end of November revealed that 23 of those cattle were what could broadly be described as beef cattle. That number is so small that it is hardly worth noticing.
  We must also show the consumer—the urban consumer more than the rural consumer, I think—how our beef is produced and where it comes from. It would be helpful if the Government were to make information available in every home. We could tell people that BSE is a condition of older cows, and mainly of dairy cows. I am sorry for the dairy herd that that is a fact of life, but it is a fact of life that we cannot deny.
  We also need to educate the population about what beef cattle eat. The reality is that the average beef cow in this country eats grass all spring, summer and autumn. They eat grass silage all winter or hay with a relatively small amount of barley and practically no concentrate at all. They are fed as cheaply as possible. Exactly the same
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  situation holds true for those animals' offspring that are to be slaughtered. Most of them are fattened on grass, silage and rolled barley. A certain amount of concentrate is presented, but my understanding is that it is almost invariably of vegetable origin; there is certainly no offal or protein now involved.
  I believe that the public mind should draw a distinction between produce from beef cattle and from the dairy herd. Unless we create a clear understanding of that difference in the public mind, we are beating our heads against a brick wall. We have to help the public, who want to buy meat, understand exactly how it is produced, where it comes from, how it is fed and why it is safe to eat it.
  Although I believe that it will be an unnecessary waste of perfectly good stock, sooner or later we will have to remove older cows and bulls from the meat trade. I say that it is unnecessary, but again it is a matter of perception. The situation is, unfortunately, being exploited, but unless people get over their fear we will have to grasp the nettle. If this fear proves as temporary as the fear of salmonella in eggs, perhaps we can get away without taking such actions. That is why the beef should be not destroyed but stored, although, as I said, the stores are becoming full.
  It is an enormous job to destroy carcases on a large scale. There is no easy way to do it, and folk have to understand that. I was pleased that the hon. Member for Edinburgh, East (Dr. Strang) drew attention to the behaviour of the feed compounders. who of course wanted to use the offal. They used it, and in the long run that turned out to be the worst decision ever made in British fanning, because that is what led to the current crisis.
  A number of hon. Members have mentioned local and regional problems in this debate. I propose to do the same because Northern Ireland has a particular problem, which in some respects is paralleled elsewhere. The good bit is that we can trace our cattle, if not quite from the cradle to the grave, from the cradle to the slaughterhouse. We know where they come from and where they are going. There is a similar system up and running in the Irish Republic.
  Mr. Salmond: And in Scotland.
  Mr. Ross: Yes. We have a quality assurance scheme that can be built upon. In those circumstances, the danger of beef from a non-beef herd getting into the food chain is minimal.
  We also export 80 per cent. of the beef that we produce, and 50 per cent. of our meat goes to continental Europe. I drew the Minister's attention to the fact that recently much of the exported meat was sent back. It was sent back from Holland, where supermarkets had decided to sell beef from Northern Ireland in preference to beef produced in their own country. They would take our beef again tomorrow, but their Government will not let them. That beef is back in Northern Ireland sitting in cold stores, which is appalling. As a result, the freezers are full, and all the beef producers' yards in Northern Ireland are full of cattle.
  The cattle are, as we say, eating their heads off and enjoying life very much, when quite a number of them should be on the hook. That reservoir of cattle will get bigger and bigger with every passing week and the cattle

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  must be slaughtered because there will not be the feed in the silage pit or in the fields in a month or six weeks' time to keep them. Every practising farmer knows that.
  Government support will be needed for the abattoirs and the freezers. It will also be badly needed to move the cattle off the farms in large numbers. Food stocks are dropping fast, which is creating a great difficulty.
  We have heard some chat about Northern Ireland having separate status. I noticed in the media some crack about the Ulster Unionist population saying that they wanted all-Irish beef status. That was not true. The only party in Northern Ireland that asked for all-Ireland status was Sinn Fein. Even the SDLP did not particularly want that because it knew that it would annoy its friends in Dublin. It was a pleasure to see someone becoming a Unionist, if only to avoid annoying his friends.
  I support the idea of separate regional status for all sorts of things. It was raised earlier at Question Time. We should promote what we can produce well from the various regions. It is too late to do that in this instance; it is not a way out of the present crisis. That would not be acceptable to Europe. All the United Kingdom must sink or swim together. I wish the Minister well in his war with Europe, because a war he is going to have.
  In conclusion, I ask the folk of this country to realise that there is no way of having cheap food.
  8.52 pm
  Dame Elaine Kellett-Bowman: First, I must declare an interest as a farmer, albeit one who, sadly, no longer has stock. I wish I had. As a dairymaid in my youth, I loved stock, and still do.
  In all my years in politics, I can recall no more depressing period than the past two weeks concerning the tragedy—I cannot call it less—of BSE and CJD. I have never spent a more depressing morning than last Friday morning at Lancaster auction.
  The disaster affects not just farmers but the whole community. The impact of the crisis is so great that the health of the rural economy of substantial parts of Britain, including my own, is in peril. As one of my sensible constituents, Mrs. Gardner of Scorton, put it:
  "The whole country must recognise that farmers, producers, meat processors and abattoir workers are also parents and consumers, and this is not an 'us and them' situation and calls for a united front and joint action."
  She signed herself:
  "Mother of five children, consumer and farmer, in that order."
  How right she is.
  Yesterday, I attended the joint meeting of the Select Committees on Health and Agriculture, which interrogated the Secretary of State for Health, the Minister of Agriculture, Fisheries and Food and their most senior and best-qualified advisers on health and veterinary matters as well as representatives of the CJD surveillance unit. As the Secretary of State told the Committee:
  "The best available evidence demonstrates that British beef and beef products can be safely eaten by consumers both here and around the world. The question now is a matter of consumer confidence. It is one thing to have a safe product; it is another to command confidence in the marketplace."
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  That is very true, and the Prime Minister reiterated those sentiments at Question Time today.
  The Government have meticulously followed all the scientific advice given to them, and I share the Minister's view that British beef is perfectly safe. I certainly continue to eat it, as do all my family, who are now old enough to make their own decisions and do not just follow mum's advice.
  A remarkably small number of so-called experts have managed thoroughly to alarm people both here and abroad, although they have not taken in some of the country dwellers. As a lady from Pilling put it:
  "It is a lot of media hype",
  and as one of my constituents from Garstang put it:
  "It is a lot of twaddle".
  I agree, but unfortunately the media hype and twaddle have had a catastrophic affect on the public mind.
  I greatly sympathise with the chief medical officer, who said yesterday, rather ruefully, that the risk is extremely low, that there may be no risk at all, and that there is no evidence of a link between BSE and CJD. He went on to say that there are many thousands of scientists here and in the United States, and in other parts of the world, who are conducting research on the matter, but the media interview only three of them. We can all remember who those three are. They make a highly lucrative living by scaring the living daylights out of people, but they flatly refuse to subject their theories to analysis by their scientific peers.
  As the Secretary of State for Health said yesterday, the argument moved on on Tuesday. All over the country, the market for beef has collapsed. On Friday, at Lancaster market, just 37 cull cows were put forward as against the usual number of between 150 and 200. Those cows sold were between £100 and £150 down. By Monday, instead of between 150 and 180 beef animals being traded, just five went to market, of which four were sold and the other had to be taken home. It is imperative that action is taken to reverse that collapse. Farmers cannot hold their beef animals beyond their proper maturity or they will run to fat and be downgraded. Apart from that, after a dry summer, the farmers do riot have the fodder to do so.
  The aim must be to restore confidence in the least wasteful way. It would be criminal, in a world short of food, to advocate a wholesale slaughter policy. However, cull cows from the dairy herd and old cows from the beef suckler herd, which have passed their useful breeding life, and are presented for slaughter, could be removed from the food chain and incinerated. I dread, however, the uproar that will ensue when the burning starts, because existing incinerators will be quite unable to cope with the influx of animals. I am old enough to remember the 1954 foot and mouth outbreak, when one could smell a herd that had been destroyed for many, many miles.
  Proper compensation must be paid, and we are fully entitled to demand that the European Community, which aggravated the panic by its ban, should bear half the costs. Those measures should restore confidence, but the next meeting of the European Union vets should be brought forward from the proposed six weeks to two to reconsider that ban.
  How do we gauge that confidence has been restored? As one of my colleagues half-jokingly observed last night: "If McDonald's think the measures are adequate, and resume their policy of buying British beef, the British public will follow suit."

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  I rather think he has a point. People who are—in my mind mistakenly—turning to foreign beef, should remember that others feed to their animals some very odd growth promoters and other things, which could well damage their health. They will stay a lot healthier if they stick to British beef.
  8.57 pm
  Mr. Colin Pickthall: I begin by quoting from a letter that I received this afternoon from James Aspinall, a farmer in my constituency:
  "I am an arable and beef farmer who farms at Gt. Altcar in West Lancashire.
  Could you please ask this Douglas Hogg"—
  the House will understand that I am quoting—
  "why he has not put some confidence into the beef industry and ordered the slaughter of these old milk cows which can carry BSE?"
  I hope that what the Minister said tonight will reassure him somewhat on that. He continued:
  "I have never had BSE on my farm and feel I am being victimised with the total collapse of price at auction markets. I feel abandoned by the Government."
  The two strands of the BSE problem run side by side: the scientific evidence—uncertain in some areas—of the transmission or otherwise of BSE, including its relationship to CJD, and the public perception of the risk and the reaction of the media and of Europe. Unfortunately, the two strands cannot be separated, much as the Government, and perhaps all hon. Members, would wish that all decisions on BSE were taken on scientific grounds alone.
  The Minister said in opening the debate that measures may have to be taken that go beyond scientific evidence, confirming the National Consumer Council's briefing that said that it has always argued that the Government should follow the precautionary principle and take all necessary measures to protect public health. Such an approach involved taking precautionary measures "beyond available scientific evidence".
  The difficulty we face has been compounded by the peculiar way in which the Government have dealt with the announcements in the past week and a half. To announce last week that a different strain of CJD had been identified caused a public panic about beef. It was followed by a weekend hugger-mugger of the relevant scientists to discuss the issue—the public knowing full well that the scientists had been working on the issue for a decade.
  Over the weekend, the Minister talked on television—rightly—of not ruling out anything, including mass slaughter. Within a week, the Secretary of State for Health had announced that everything seemed to be okay as far as the scientists were concerned. While I commend Ministers on their openness with the House in the past week or so, I must say that no tactic could have been better devised to inflate public concern than the way in which the matter has been handled.
  The public alarm is totally understandable. It is no use Conservative Members blaming the press, the Labour party or whomever they can find—apart from themselves—as the Prime Minister did today. Nor is it at all surprising that our European partners reacted with similar alarm to that of the British people—I would have been surprised if they had not. Had the situation been reversed, I can easily imagine the delight with which some
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  Conservative Members would have rushed to demand a boycott and, in some senses, they have been doing that this evening. The vilification of European beef—justified or otherwise—would simply result in people in this country not eating beef at all, whether it was British, Belgian or whatever.
  In common with most hon. Members, I am not a scientist. It is therefore fairly simple for the Government to tell me, and all of us, that we must rely on scientific information. Unfortunately, not all the scientists agree. Those who have been sounding alarms for many years about BSE have been brushed to one side, branded as bonkers and—in one case, at least—sacked. The Government must realise that, although they rightly have confidence in the scientists on SEAC to whom they listen, the public also listen to scientists who differ—even when their views might be apocalyptic.
  Many people in this country suspect science and scientists—even more, they suspect Government. They fear cover-ups and vested interests that appear at times to control public policy-making. When the public hear hon. Members declaring loudly that British beef is totally safe or that British beef is the best in the world because they have tried beef from all other countries, or when they hear hon. Members declaring that they will eat more beef—as the hon. Member for Congleton (Mrs. Winterton) has recently done—metaphorically, they count the spoons.
  Comparisons of risk with road accidents or smoking are interesting, but totally irrelevant. There is something creepily awful about suspecting the food one eats, and suspecting that it might contain a poison that one cannot see. We are talking not about consequences amounting to something like flu, but about an incurable fatal disease.
  Numerous questions must be addressed, and some have been by the Minister this evening. My hon. Friend the Member for Edinburgh, East (Dr. Strang) detailed the errors of the past. I will not go through them again, but there are questions to be asked. Why did the Government reject the recommendations of the Tyrrel committee and of the Select Committee in 1990 that there should be random checks of animals at slaughter? That has been raised before this evening, and it seems to be the most obvious and simple thing that should have been done.
  A distinguished farmer in my constituency, Jim Heyes from Mossborourgh farm, wrote:
  "As all brains etc are removed from carcasses are they tested for BSE before disposal?…If not why not?"
  That is a good question. He added:
  "Cattle which die on the farm are normally sent to the knacker. Are brains etc removed from these carcasses?"
  I do not know the answer to that. Why has the regime in slaughterhouses been so lax that, last September, 48 per cent. of them were failing to handle SBOs correctly? What work has been done into the possible consequences of that for public health? Why was Haresh Nareng's proposed test for BSE in live animals not thoroughly tried out, instead of being pushed on one side? Why has there never been any testing of slurry-treated land where BSE has been found?
  The joint Select Committee was told yesterday that scientists were not sure about the zero risk of BSE in muscle and that it might be one in a million. We have to remember that we have a population of more than 50 million, so that is a substantial increase in risk.
  Why do we not know the reason for the incidence of CJD being much higher among dairy farmers, not merely in this country but abroad? Why were we told that

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  mechanically recovered meat was banned in December, when it was only the mechanically recovered meat from the spinal cord? Why do we not know whether infected animals—or how many—were passed into the food chain during the period of the 50 per cent. compensation? Why do we not know whether infected animals were buried during those years in the late 1980s? Why have the questions of my hon. Friend the Member for Workington (Mr. Campbell-Savours) about possible cross-infection in the mid-1990s not been answered? Perhaps they cannot be.
  Those matters and many others—most vitally perhaps the fact that there is still uncertainty about transmissibility between mother and offspring—are all lodged in the public mind, and reassurance on statistical grounds will not suffice. Clearly, putting the consumers' worries to rest is not going to be easy. Distrust of beef products will probably remain as a folk memory for a long time. In restoring some confidence, so that the industry can survive and rebuild, I do not believe that the Government can overreact. The proposals for slaughter suggested by the National Farmers Union and the Country Landowners Association seem to be a minimum that would start the process of rebuilding.
  The regime at slaughterhouses and on farms must be draconian, and must be seen to be so. My hon. Friend the Member for Edinburgh, East proposed a quality assurance scheme. The situation is so desperate that that must not only be the case, but we must not put aside the idea of creating a statutory beef regime to ensure that all the power of Parliament is seen to be behind that quality assurance. The public must be clearly informed about the presence of bovine products in other foodstuffs. Many of us have been astonished, however well up we might be on these matters, to find out how extensive is the use of such products, which are in all sorts of things, such as sweets and biscuits.
  The penalties for ignoring or flouting the regulations must be seen by the public to be harsh and effective. Moreover, whatever action is taken, it must be taken swiftly. Every day that passes means more jobs, more confidence and more exports lost and that may lose us the co-operation and support of the European Commission, which we seem to be starting to enjoy.
  There is an awful lot to learn from this episode about the wider concerns of the public—
  Madam Deputy Speaker (Dame Janet Fookes): Order. I call the hon. Member for Ryedale (Mr. Greenway).
  9.7 pm
  Mr. John Greenway: One of the greatest strengths of our parliamentary system, certainly in so far as it applies to the House, is the relationship that all hon. Members enjoy with our constituencies. I dare say that every hon. Member is proud of the constituency that he or she represents. In this past nine years, I have certainly been proud to represent Ryedale and I have good cause for that pride, because those who have been to North Yorkshire know that it is one of the jewels of our countryside.
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  Much of my interest and concern in the affairs of Ryedale has focused in those nine years on the fortunes, welfare and interests of the agricultural community. Were any of that community able to speak in this Chamber tonight, they would want to say that the crisis that they are facing is unprecedented in their memory and, I suspect, that of their parents and grandparents, who have farmed the land for generations. Therefore, it is time for us to stop a lot of the party political bickering that has marred debate on this matter in the past seven or eight days. The electorate will be able to judge that in due course. Now we must concentrate on what measures we can take to stem the prospect of a complete collapse of the interests of many farms and other businesses that are dependent upon agriculture.
  Sir Patrick Cormack: Whole communities.
  Mr. Greenway: As my hon. Friend says, whole communities could be devastated.
  We face the prospect of a grotesque obscenity. It is grotesque because we are likely to have to spend hundreds of millions of pounds, perhaps more than £1 billion a year, to put things right—and for what? To destroy cattle, livestock, meat and meat products that are entirely wholesome—some of the highest-quality produce anywhere in the world. We shall spend money that, whatever our views on the Budget and the need to contain public expenditure, we could have spent on the health service, education and social services.
  The purpose of the debate is to ask ourselves what can and should be done to ensure that we do not suffer the catastrophe that many of us think may occur. It is abundantly clear that, while the Government have rightly followed all the scientific advice that they have received, and have done so speedily on virtually every occasion, more action that goes beyond the science is needed.
  Other hon. Members have mentioned what they have discovered at their markets. Last Friday, I discovered at one of my local markets in Malton a unanimous view that, above all else, we must differentiate in the public's mind between clean beef and cow beef. Beyond peradventure, that must be the most important way to begin the difficult job of rebuilding consumer confidence.
  The housewife and the consumer want to know that the meat or other beef product that they are buying or consuming in restaurants, canteens, schools and factories has come from an animal that could not have had BSE. It is difficult for us to give that guarantee, but it is much more easily given if we take cow beef out of the food chain. For that reason, I strongly support the proposals of the National Farmers Union. My right hon. and learned Friend the Minister of Agriculture, knows that, for almost a week, I have advocated that. I know how seriously he is considering it. The Country Landowners Association has also supported it.
  The question is whether that proposal will work. It is no good us being convinced that it is a sensible proposition; we have to judge the expenditure on the likelihood of its success. Will it make any difference to the European Union veterinary committee? It clearly must, because there can be no real basis for the ban that has been placed on British beef and beef products against the advice of its own veterinary scientists. Will the supermarkets support the proposal? I believe that they

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  will. Will McDonald's and the other fast food restaurants support the move? I believe that they should. Will schools lift their bans on beef? I am sad that North Yorkshire has also succumbed and taken that ridiculous measure. Will the consumer generally be reassured? Those are the issues that Ministers have to judge. That is the objective.
  It is very easy for hon. Members and for the general public to say, "Here is an easy way of resolving the problem." However, it will not be an easy solution unless the organisations agree with our decision. It may take more than tomorrow's meeting to reach agreement—I am sure that my right hon. and learned Friend knows that—in which case we must decide what we will do to support the market in the immediate future.
  I intervened during my right hon. and learned Friend's speech to ask whether all cattle would be available for intervention. He replied that the cull-cow beef that we want to remove from the food chain may not be available for intervention. I am grateful for his comment that other support may be available in that case. Under our system of intervention, all the intervention boxes are not available to United Kingdom producers. Some cattle—whether they are premium cattle or those that weigh too much—are not allowed through the intervention system. They must be available for intervention as a matter of urgency.
  If the European Union ban is not lifted, we shall not be able to export livestock, not just beef and beef products, to Europe. It will be utterly grotesque if veal calves are slaughtered at a cost of more than £100 each, the trade in veal calves is stopped and many businesses are ruined by that ridiculous measure.
  I do not for one moment underestimate the difficulty that my right hon. and learned Friend faces in Brussels tomorrow—and I do not think that any hon. Member should do so. I hope that my right hon. and learned Friend will travel to Brussels knowing that he has the support of all hon. Members, as well as that of the farming and rural communities, in securing the results that he needs in order to restore confidence in the British beef industry.
  9.16 pm
  Mr. Alex Salmond: As I came into the Chamber this evening, I learned that Cornhill and Maud—two of the historic marts in the north-east of Scotland—closed today and are never to reopen, regardless of the state of the industry. Buchan Meat, another famous name in the industry, was closed in January. Following a vigourous community campaign, we attracted a buyer, and it was due to reopen last Monday. That reopening has now been postponed for days, weeks or months—who knows? I am aware that such events are occurring not only in Scotland but in the rural communities of Northern Ireland, Wales and England. However, the north-east of Scotland is one of the heartlands of the beef industry.
  The train of events is affecting farmers, processors at the marts, factory workers and butchers. It is not simply a question of compensating companies: individuals need compensation, too. Individual workers—not just individual farmers—are losing their jobs. I hope that, in summing up, the Secretary of State for Health will mention compensation for rural communities as well as for individual enterprises.
  Earlier today I likened our present situation to a blocked drain. That is the reality: unless the meat can be shifted from the abattoirs, those who finish the cattle cannot sell them for slaughter and they cannot buy the
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  stores of the hillmen who have nourished the cattle through the long winter months. The drain must be unblocked—and quickly.
  It has been said this evening that we should not refer to the past too much. I shall put one idea to the House. There may be a small premium in apportioning blame, but a significant problem of feed contamination in the dairy industry, which was identified 10 years ago, has turned into a black hole that threatens to envelop the whole of the beef industry. That hardly represents a wise carrying through of official policy. The Government say that we should not be wise after the event, but they are foolish after the event. They still do not think that they have done anything wrong during the past 10 years. That is folly. A bit more humility would come well from Ministers.
  We are told that Europe is to blame—that the French have done us down. I ask hon. Members to consider what would have happened if the French Agriculture Minister had said in the Assembly of the Republic, "We have a problem with our poultry industry. It is a small risk, of course, but some people have unfortunately died." The very Members of the House who blame the French would be blockading Dover to keep out French chickens, and they know it.
  What policy prescription do they advocate? That we should withdraw from the European Union. Would that make the European Union buy British beef? Would that advocacy be successful? What nonsense. The responsibility for the BSE outbreak and its repercussions, not only in what foreign Governments are doing but in what the domestic public are doing, lies much closer to home than Brussels, Paris or Bonn.
  Four things must be done now to stabilise the position. First, we need tough measures to enforce the regulations that have been made. The Minister of Agriculture, Fisheries and Food says that that is a problem of the past, but it is a problem of the very recent past indeed. There is a credibility problem with regard to the enforcement of regulations. I hope that we shall hear something from the Minister later about stiffer sentencing. People who break those regulations are jeopardising the livelihoods of thousands of people, and not paltry fines but gaol sentences are required.
  Secondly, a selective slaughter policy should be agreed with the European Commission, to provide the basis for reopening markets at home and stabilising consumer confidence in this country. The NFU has proposed, not a compulsory cull, as I understand it, but a 30-month restriction, and after that, when animals come to the end of their useful lives, they will not go into the human food chain. There is an important distinction. I am not sure that all hon. Members fully appreciated that. If we go for a compulsory cull—which I think will be necessary for certain categories of animals—let us concentrate on the BSE-infected herds, the animals at risk, and not carry out a global cull, which will satisfy no one and will not even have the public relations value that some people advocate for it.
  Thirdly, Scottish beef must be marketed as a quality product, which can be guaranteed BSE-free. I have a letter here from Professor Hugh Pennington, whom many hon. Members will know as a professor of medical microbiology at Aberdeen university, an expert in the field that we are discussing. Looking at the low incidence of BSE in Scotland, perhaps one sixth of the incidence elsewhere, cow for cow, he says:

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  "Second, Scottish Quality Beef can be traced back to BSE-free herds. From the scientific point of view it would be irrational to rate the health risk from consuming this beef as higher than that run from consuming beef from any other country that had reported BSE in its own cattle—a risk that is currently considered to be negligible."
  There are quality assurance schemes in Northern Ireland and Scotland, there may be some in England and I understand that a small one has started in Wales. If the Ministers do not succeed in lifting the global ban, we must get beef that is traceable as quality assured on to European markets, to try to unblock the system.
  Fourthly, the Government must take global intervention measures to unblock the system. We heard some encouraging things in the Minister's opening speech, but without widespread intervention buying, the market will not recover. If the market does not recover, even if consumer confidence is restored quickly, the processors, slaughterhouses and farmers will no longer be there, because they will be redundant or out of business. Measures must be taken quickly.
  I have undertaken to shorten my speech to allow others time to speak. I say finally that the Government must take action quickly, or the industry will not be there when consumer confidence returns.
  9.23 pm
  Sir Jim Spicer: I have undertaken to speak for five minutes or less, and I shall do just that.
  When I farmed in Dorset, 15 or 20 years ago, I had a pedigree herd of Galloways and I then had to move across—single suckling—to a cross-bred herd. If I had been farming today, this would have been one of the most desolate days of my life. All I would say to my right hon. and learned Friend the Minister of Agriculture and my right hon. Friend the Secretary of State for Health is that, whatever measures we take to help the farming industry, for God's sake let us get on with it and give help quickly, because help is desperately needed now.
  Yesterday, there was a joint meeting of the Health and Agriculture Select Committees. My hon. Friend the Member for Weston-super-Mare (Sir J. Wiggin) asked Professor Pattison:
  "Would you not agree that the likelihood of BSE infected food appearing on the dinner plate is as near zero as is humanly possible?"
  Professor Pattison's response was:
  "I believe that is now the case."
  That was not reported in the press this morning—it does not suit them to report the facts, which would have restored some confidence. If we were dealing with a rational response to such a statement, there would be no major cause for concern, and consumers—both in this country and in Europe—would be happily eating beef as a matter of course.
  Sadly, we all know that in this case, the media, the Opposition and our so-called fellow members of the European Union seem to have had one aim: to stir up public fears and—in the case of the European Union—to serve their own interests, at whatever cost to our industry. We now have to face up to that lack of confidence. There is no doubt that major resources will
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  need to be deployed and that many thousands of cows may have to be slaughtered in an attempt to restore public confidence.
  I shall say a word to those who have helped to undermine that confidence. The hon. Member for Peckham (Ms Harman) has her reasons for what she has done over the past week—and I hope that she will live to regret it. We all accepted and enjoyed hearing what the leader of the Liberal Democrats has said over the past two or three days, but I wish that he had taken the same line when he was making broadcasts earlier this week and last week—his tone was quite different. I ask the Liberal Democrats to exert some influence on the leader of Dorset county council, to make certain that he does not go around undermining confidence in our beef.
  The cost of the measures that we shall have to implement may be high, but it is worth bearing it in mind that, between 1979 and 1995, Government social and reconstruction grants to British Coal totalled over £6 billion. At that time, the coal industry was in decline. However, our farming industry has a future, provided that we take the steps now to reassure our farming community and to restore confidence.
  It is vital that the European market is reopened as soon as possible. The total value of beef products in this country at £2.5 billion, and over £500 million goes in exports. If we do not get that market back, we shall be in serious trouble. The Government have to listen to reason and they have to do something about it.
  BSE has been in rapid decline in this country and, in large measure, that is because of the actions taken in 1989. We must all hope that that downward trend continues and that within two or three years the present catastrophic situation will, in part, have been righted. The banks should help—they must stand by the industry and, if need be, my right hon. Friend the Prime Minister should write to all the clearing banks.
  Next Friday—5 April—the Dorset National Farmers Union will have a meeting. It has invited all Members of Parliament, all candidates, all county councillors, all district councillors and all parish councillors. At that meeting, we must be united and have only one aim: to restore confidence in Dorset beef and food products and, through that, in the rest of the country.
  9.28 pm
  Mr. Jimmy Hood: I thank the hon. Members who have cut their speeches short to allow me the opportunity to say something on this important subject.
  I come from a good Labour constituency in the central belt of Scotland. Hon. Members seem to forget that I have one of the largest rural constituencies in the House—over 550 square miles. The Lanarkshire area secretary of the National Farmers Union told me that he has 400 members in my constituency. Therefore, I have a considerable interest in this very important subject. Obviously, I understand the plight of the farmers, but we should not lose sight of the fact that hundreds of thousands of other livelihoods are under threat. Particularly in rural constituencies such as Clydesdale, many small businesses, including family butchers and corner shops, depend considerably on a thriving rural economy and a vibrant agricultural industry.
  Last weekend, I found myself appealing to my constituents to calm their response to the understandable hysteria that followed last week's announcement.

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  In asking them to be calm, however, I could not put my hand on my heart and advise them to eat beef after the statements in the House a few days previously.
  In Scotland, we have excellent beef. I did not get where I am today without being a specific supporter. In Scotland, we have the best steak pies anywhere. I have had one or two steak pies in my time. I had one last weekend and I shall have another this weekend.
  I am not trying to score political points, but, like my hon. Friend the Member for Edinburgh, East (Dr. Strang), I was disappointed and somewhat surprised when I listened to the Prime Minister today. I understand that the Prime Minister has problems and pressures, as we all do. He probably has more than most, but his reaction today went over the scale and made no contribution whatever to addressing a great problem. I do not say that in a political way, but if the Prime Minister watches the tape of today's Question Time, he may regret his response to my right hon. Friend the Leader of the Opposition.
  There seems to be a certain attitude abroad within the Government. We have had scepticism and Thatcherism—now we have "not me-ism". Whenever there is a problem, the Government take the same view. They say, "It is not us," and somebody else is always to blame. Our constituents expect the Government to take responsibility. That is what the Government and Ministers are about, so when they start bobbing and weaving to escape that responsibility, politicians lose the public confidence. That loss of confidence affects not just particular Ministers, but the whole political system. It is difficult for us as politicians to address a fall in confidence when the public see politicians refusing to accept the responsibility that they accepted in the past.
  We can talk about presenting a united front in our approach to the problem. I can well understand that, but the Secretary of State for Health let the genie out of the bottle last week. It would have been better had he considered talking to consumer associations, industry, traders and Opposition parties first. Some cross-party views might have helped to reduce the hysteria.
  The statement let the genie out of the bottle, and over the weekend the Minister of Agriculture, Fisheries and Food suggested the possibility of selective culling. Then we were told that the Chancellor of the Exchequer came back from South Africa to veto any such proposal. I do not have to remind the House that that was followed by the ban by McDonald's, British Airways and schools, which was no help at all.
  Some colleagues blame Europe for the problem. Today, the hon. Member for Northampton, North (Mr. Marlow) said that the Commission had acted illegally. As Chairman of the Select Committee on European Legislation, I can tell the House that the Commission did not act illegally: it acted quite properly under the treaties. That has been demonstrated quite clearly to our Select Committee this week. It is a fact, not a matter of conjecture.
  Now we need to rally round and try to pull back from this disaster. As my hon. Friend the Member for Edinburgh, East said, we are not going to nit-pick about the Minister's proposals. I hope that they will do enough to rebuild confidence in British beef. I agree with hon. Members on both sides about British beef; in particular, Scottish beef is the best one can find anywhere. Wherever I am in the world, if I am offered Scottish beef, I am delighted to eat it.
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  Let us refrain from throwing brickbats and claiming that the Opposition parties caused the whole problem. If the Government had accepted responsibility from the beginning and had consulted the industry and Opposition parties, we might have been in a better position today. If, in the interests of unity, the Opposition had supported the statement by the Secretary of State for Health last Monday, where would we be today? It was only by objecting to what he said that we brought about some movement towards solving the problem. I hope that what we have heard today will begin to solve it, but the Government cannot escape their responsibility for the issue.
  9.36 pm
  Ms Harriet Harman: The debate in the House tonight and the wider debate in the country has been prompted by the discovery of 10 cases of what has been identified as a new form of CJD, which is an horrific disease, always fatal. This new strain of the disease has a new neuropathology. Hitherto it has been thought unique to this country, although I understand that it has been announced today that there may be a case with the same neuropathology in France.
  This disease strikes young people, unlike the form of CJD with which people are more familiar. The average age of the 10 victims is 27.
  We are told by the Secretary of State for Health that the most probable cause of the disease in these 10 people was eating contaminated beef, most probably before 1989. We well understand the full horror of the disease, but scientists are still attempting to understand more about it. I acknowledge the work of the independent advisory committee, SEAC, which has tried hard to marshal and to understand the scientific evidence, but as my hon. Friend the Member for West Lancashire (Mr. Pickthall) made clear, the problem remains that more questions have still to be answered than can be answered by the scientists.
  The scientists cannot tell us with any certainty whether these 10 cases will be the first and last, or whether there will be 100 cases or 10,000 cases. The issue is full of uncertainty and must be kept under review. In particular, I ask the Secretary of State for Health to ensure that the scientists keep the susceptibility of children under review, especially those with underdeveloped immune systems—children under three. Public health must be the Government's first concern.
  To take the necessary action, there must be an understanding of the roots of the crisis which has been caused by confidence in the safety of British beef first having hung by a thread and then having collapsed.
  From the time that BSE was discovered, the Government asserted that mad cow disease could not be transmitted to humans and cause brain disease. On 7 June 1990, the then Minister of Agriculture, said:
  "the clear scientific evidence is that British beef is perfectly safe."—[Official Report, 7 June 1990; Vol. 173, c. 906.]
  That was followed up by the Minister inviting the world to watch him feed his daughter beefburgers, thereby implying certainty, when, as my hon. Friend the Member for Clydesdale (Mr. Hood) said, there was no certainty, and concern and doubt were growing.
  The problem is that trust in the Government collapsed when, having made categorical assurances for all those years, the Secretary of State for Health had to come to

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  the House and announce, in the words of the Spongiform Encephalopathy Advisory Committee, that the most likely explanation at present was that these new CJD cases were linked to exposure to BSE.
  Of course it is true that scientific opinion on BSE and Creuzfeldt-Jakob disease has developed considerably over the years, but as new developments have emerged the balance of scientific opinion has changed. Against the background of that growing uncertainty, the problem remained that the Government continued to argue with certainty that there was no link between BSE and CJD. It is that belief in certainty when there was none that contributed to the delay and inaction and which has now led to a crisis in public confidence.
  In the debate, hon. Members set out their concerns about Government delays and the failure to regulate. The only way forward is to make beef safer and to restore consumers' confidence. That is also important for the livelihood of all those who work in the meat industry. There must be a common agreement between consumers, producers and retailers on the action that must be taken to restore public confidence. I hope that the Government will now admit that that is necessary.
  For a week, the Secretary of State for Health insisted that policy must be based on scientific evidence and nothing else. I argued in the House on the Wednesday that the announcement was made and on the following Monday that only tough action that goes beyond the minimal recommendations of the scientists would have any chance of restoring public confidence. It was only yesterday, seven days later, that the Secretary of State for Health came round to agreeing when he told the joint meeting of the Agriculture and Health Select Committees:
  "The issue is no longer a question of the safety of British beef. The question now is a matter of consumer confidence."
  He said that the Government were considering a wide range of options over and above what was scientifically recommended. But it took seven days for a recognition of that action; seven days in which consumer uncertainty has grown and people in the meat and fanning industries have faced uncertainty.
  Mr. Edward Gamier: Will the hon. Lady tell us what she proposes to do to boost consumer confidence?
  Ms Harman: I will. Today we put forward an eight-point package that commands broad agreement among retailers, the hamburger chains, consumer organisations and farmers. The task is to restore public confidence: not simply to jeer at the public. Perhaps the Secretary of State for Health will finally understand the importance of making beef safer in order to restore consumer confidence.
  Nobody could fail to have been moved in the past week after hearing about farmers, farm workers, slaughterhouse workers and those in the meat and food industry, seeing the collapse of consumer confidence threatening their livelihoods.
  Mr. Hendry: That was helped by the hon. Lady.
  Ms Harman: The hon. Gentleman says that it was helped by me, but the writing has been on the wall for
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  many years. Before I said one word on the issue, 10,000 schools, including those in the hon. Gentleman's constituency, had taken beef off the agenda. The Government should have read the writing on the wall instead of just seeking scapegoats.
  The awful position faced by farmers, farm workers and people in the meat industry was mentioned by the hon. Members for Newark (Mr. Alexander), for North Cornwall (Mr. Tyler) and for Lancaster (Dame E. Kellett-Bowman) and by my hon. Friend the Member for East Lothian (Mr. Home Robertson). The tragedy is that it has taken the Secretary of State a week to be moved to action to support farmers in the meat industry by rebuilding public confidence in beef safety.
  As I said in response to an intervention by the hon. and learned Member for Harborough (Mr. Garnier), public concern about beef had been mounting for some time before last Wednesday. A third of all schools had taken beef off the menu when the Secretary of State for Health was saying that it was perfectly safe, but he did not listen to their concerns. He ignored their worries and, as a result, they could not have confidence in him and could not trust him.
  After Wednesday, consumer confidence, which had been hanging by a thread, collapsed.
  Mrs. Ann Winterton: I cannot sit here and listen to this for much longer. Will the hon. Lady say whether she believes beef is safe?
  Hon. Members: Yes or no?
  Ms Harman: Hon. Members shout, "Yes or no?" They should listen to what the scientists have said, which is that there is no certainty in this situation, but I will say that, if the Government take the eight measures that we have proposed, British beef will certainly be safer and consumer confidence more likely. The Consumers Association said that, if people want to take no risk, they should not eat beef.
  There has been mounting consumer concern. On Sunday, McDonald's announced that it would no longer put British beef in its burgers. It was swiftly followed by Wimpy, Burger King, British Airways, Virgin Airways, Little Chef and Happy Eater. Even the canteen at the Department of Health has taken British beef off the menu.
  As my hon. Friend the Member for West Lancashire said, it is no good blaming the consumer, as the hon. Member for Congleton (Mrs. Winterton) sought to do. Consumers will be assured only if they are given full information and see tough action.
  Mrs. Ann Winterton: On a point of order, Madam Deputy Speaker. Is it right that someone should attribute a view to me that has never been expressed in the House? I have never said that the consumer should be blamed. I have made a perfectly clear, straightforward speech. I never said anything of the sort, and the hon. Lady maligns my character.
  Madam Deputy Speaker: That may be a point of debate, but it is not a point of order for the occupant of the Chair.
  Ms Harman: I will move on to Labour's proposals to make beef safer and to restore consumer confidence. The

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  first priority must be enforcement of existing rules in slaughterhouses. For many years, people who work in slaughterhouses, represented by the Union of Shop, Distributive and Allied Workers and by the Transport and General Workers Union, have been saying that the standards are not high enough, as my hon. Friend the Member for Preston (Mrs. Wise) said. In autumn last year, unannounced visits by the state veterinary service found that 48 per cent. of slaughterhouses failed to comply with safety regulations. That was reaffirmed yesterday in the Select Committee by John Pattison, chairman of SEAC.
  How can the public have confidence that their meat is clean if slaughterhouses are not? As the hon. Member for Banff and Buchan (Mr. Salmond) said, in response to the failing standards in slaughterhouses, there have been no prosecutions for that flagrant breaking of the rules. All that has happened is that slaughterhouse owners have been invited into the Ministry of Agriculture for a cup of tea. Let me tell Ministers that, if McDonald's, Tesco or Sainsbury's find that their slaughterhouses have broken their rules, they do not invite them in for a cup of tea; they take their business away.
  We have made other proposals. They include the introduction of a random testing programme for BSE in the brains of cattle going through slaughterhouses, not because those brains are to be eaten—the Prime Minister misunderstood the position—but so that we can trace the incidence of infection with greater accuracy. We are calling for publication by the Government of a full list of all food products that contain bovine material. People cannot choose if they do not know what they are eating. The Secretary of State for Health should help them be able to choose.
  We are calling for the banning from human and animal food of all specified bovine offal, including offal from cows under the age of six months. We should look again at the safety of mechanically recovered meat. We should encourage a quality assurance scheme—so that consumers know where their beef comes from—with labelling of products in shops. That point was made by the hon. Member for North Cornwall.
  We should be establishing a food standards agency—it would put an end to the sense of conflict in MAFF—which would report to both the Secretary of State for Health and the Minister of Agriculture. We should be guaranteeing the chief medical officer greater independence and the support needed to fulfil that role independently. That would make beef safer; it would restore consumer confidence. Safer food will make for safer jobs in the food industry.
  9.50 pm
  The Secretary of State for Health (Mr. Stephen Dorrell): The House will have heard the contrast between the speeches by the hon. Member for Peckham (Ms Harman) and her hon. Friend the shadow agriculture spokesman, the Member for Edinburgh, East (Dr. Strang). The House, the country and those whose livelihoods depend on agriculture will have drawn their own conclusions from that contrast. In the 10 minutes that are available to me at the end of this debate, I do not propose to follow the hon. Lady into the political sewers from which she has not emerged since the beginning of the argument.
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  Every other contributor to the debate has reflected the seriousness of the position facing the country's rural economy. That point was made by my hon. Friend the Member for Hereford (Sir C. Shepherd), who said that there would be universal disappointment in the rural community, and, indeed, among those who enjoy eating beef, at those who have sought to draw party politics into the issue. That point was also made by my hon. Friends the Members for Lancaster (Dame E. Kellett-Bowman) and for West Dorset (Sir J. Spicer), and by the hon. Member for Edinburgh, East, for which I give him full credit.
  The House knows the history and is aware that the central finding of SEAC is that provided that the specified offals ban and other regulations are fully enforced—the Government have made it abundantly clear that we are fully committed to the full enforcement of those regulations—beef is, in the words of the SEAC chairman, in common parlance, safe. We heard that from the hon. Member for Edinburgh, East and would have liked to have heard it from the hon. Member for Peckham.
  Against that background, the Government were right to identify clearly from the beginning that they faced two priorities. Their first and paramount priority was to ensure that the product on sale to British and foreign consumers was safe. That is a technical question and needs a technical answer. That is why I am quite certain that the Government were right to insist that we must begin dealing with the situation by looking at the science.
  The result of that, and of the fact that the Government have adopted such an approach not merely in this latest episode but right through the story of the treatment of BSE, is that we now have in Britain the most intensively regulated beef industry and the best quality assurance for it that one will find in any part of Europe. That is the foundation of our claim for market confidence. We have the best assurance of any country in Europe about the quality of the beef product on sale to consumers in this country and abroad.
  It is against that background that I said—the hon. Member for Peckham was right on this at least—at the Select Committee meeting yesterday, which my right hon. and learned Friend the Minister of Agriculture repeated this afternoon, that we now need to move quickly to restore market confidence in the product. I agree with all my hon. Friends who have stressed the need to move quickly.
  Mr. William Cash: Will my hon. Friend bear in mind the importance of ensuring that the banks help people who are in such dire straits?
  Mr. Dorrell: My hon. Friend is right to say that there is a need for support for the entire economic structure of these industries from those who deal with them and from the Government. That is why my right hon. and learned Friend the Minister of Agriculture is going to Brussels tomorrow to make clear the British Government's desire to act to restore market confidence in British beef.
  Mr. James Pawsey: Does my right hon. Friend agree that the EU ban on British beef is unfair, unjustified and unwarranted, and that it owes more to commercial considerations than it does to any medical reason?
  Mr. Dorrell: My hon. Friend makes a very important point which has been made during the debate by my hon.

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  Friends the Members for Ludlow (Mr. Gill), for Congleton (Mrs. Winterton) and for Newark (Mr. Alexander), and by others. It is underlined by the wording of the press release put out by Commissioner Fischler, who said:
  "the evidence suggests that even should there be a link to BSE and CJD the risk to human health has been eliminated or at worst reduced to a minimal level".
  That is why it is the Government's view that the ban is unjustified and why my right hon. and learned Friend the Minister has made it clear that it is an objective of British policy to see that it is removed. That is also why my right hon. and learned Friend has welcomed the fact that in the same press release, Mr. Fischler stresses that the Commission is ready to assist the UK both in terms of support to stabilise the beef market and in terms of further control measures against BSE.
  Mr. Salmond: Will the Minister give way?
  Mr. Dorrell: My right hon. and learned Friend is going to Brussels to take forward the Government's commitment to discuss measures to support the British beef market. That is a clear commitment and my right hon. Friend will carry it forward tomorrow.
  Mr. Salmond: Will the Minister give way?
  Mr. Dorrell: I have only another 10 minutes and I have some other important points to make in responding to the debate. [HON. MEMBERS: "Four minutes."] I should have said four minutes. My mathematics is improving as my speech continues.
  I have asked representatives of the British food retailing industry to come to the Department of Health tomorrow. Thus while my right hon. and learned Friend is conducting discussions with the Commission in Brussels which are designed to restore market confidence in the British beef industry, I shall be conducting discussions with food retailers in this country to ensure that we understand clearly the steps that are necessary to restore the confidence that every one of us wants to see restored.
  Mr. James Couchman: I congratulate my right hon. Friend on seeing the food retailers. Would he—
  Mr. Salmond: On a point of order, Madam Deputy Speaker. Is it in order for the Minister to give way
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  successively to hon. Members who have not been here throughout the debate, but to refuse to give way to hon. Members who have been?
  Madam Deputy Speaker: It is entirely at the discretion of the hon. Member who has the Floor whether he gives way or to whom he gives way.
  Mr. Couchman: Will my right hon. Friend remember, while he speaks to the retailers, the food manufacturing industry, including the pie factory in my constituency which makes 60 million pies a year—a third of all British frozen pies? Will he remember that such firms also face a crisis?
  Mr. Dorrell: My hon. Friend raises a key interest. He has pursued it tirelessly with both my right hon. and learned Friend and me, and I assure him that it will also be represented.
  My hon. Friend the Member for Lancaster stressed the importance she places on bringing forward the meeting of European vets planned for six weeks' time. It is an objective of my right hon. and learned Friend in his discussions with the Commission to ensure that we are in a position whereby that meeting can be brought forward.
  My right hon. and learned Friend also made it clear to the House in his opening speech that not only are we taking the steps necessary to rebuild the confidence of the beef consumer and reopen the market, but we are introducing in the House measures to support the restructuring of the rendering industry and to introduce a calf slaughter premium. My right hon. and learned Friend has also undertaken to examine other measures necessary to support the rural economy connected with the beef industry.
  All those measures were welcomed by the hon. Member for Edinburgh, East, for which I am grateful. The hon. Member for North Cornwall (Mr. Tyler) stressed the importance of research, and I assure him that that emphasis is entirely supported by the Government.
  I shall conclude with another point that the hon. Member for North Cornwall made, about the importance of building a national approach to a national problem. If that approach is diluted or upset by the conduct of narrow party political arguments—
  It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

  Women in prison
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Brandreth.]
  10 pm
  Dr. Lynne Jones: This debate was originally due to take place on 6 March, after a scheduled one-and-a-half hour debate on the Education (School Premises) Regulations 1996. However, the motion for that debate was not moved, largely because the Minister responding to the previous debate on community care finished 10 minutes earlier than expected.
  It is interesting to speculate why on that occasion the Minister took only eight minutes to reply to a five-hour debate. All I know is that there was considerable media interest in the issue of women in prison, and the feedback that I received suggested that there was considerable nervousness on that day about the spotlight being put on the Prison Service.
  My sources say that a relatively quiet period for the women's prison service had been transformed in a matter of days into a crisis because expected places at Eastwood Park, which had suddenly become famous as the "battery hen" prison, did not become available. We shall probably never know whether my debate was deliberately scuppered by the Government, but at least we are now here at a reasonable time of night.
  I wanted to give this subject another airing because of the continuing concern about the increase in the female prison population and the conditions in which people are housed. I hope that the Minister of State will be prepared to demonstrate an objective approach to the humanitarian and practical issues concerning female offenders.
  The Minister is on record as having said that, as well as punishment, an important role for the Prison Service is the rehabilitation of offenders. I echo her comments on the BBC programme "Question Time" on 29 February, when she said that she needed to make no apology for taking out of circulation people who prey on the general public. I agree that serious and persistent offenders should be gaoled, but I hope that tonight she will acknowledge the fact that the public would be better served if fewer female petty offenders were given custodial sentences. That would give the Prison Service more scope to pursue its work in the rehabilitation of more serious offenders.
  I understand that the female prison population this month is about 2,100—an increase of about 40 per cent. over the past two to three years, and more than double the numbers incarcerated 20 years ago, when it was predicted that in future fewer women would be given prison sentences.
  The flippancy with which the Home Office has reacted to that huge increase is illustrated by the written answer by the other Minister of State, the right hon. Member for Penrith and The Border (Mr. Maclean), to my question asking about the increase in the number of women sent to prison, and requesting his assessment of the reasons for that increase. He wrote:
  "Some 2,952 women were sentenced to immediate custody in 1994, compared with 2,158 in 1992 … The reason for the increase … is the rise in numbers sentenced to custody by the courts."—[Official Report, 20 April 1995; Vol. 258, c. 266.]
  One might expect from that information that we are in the midst of an epidemic of crime committed by women, but the number of convictions for indictable offences has
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  steadily declined from 47,500 in 1987 to 39,500 in 1994. Violent offences have also gone down from a peak in 1989. The figures show not a rising tide of female crime but a greater readiness to imprison women. The result is overcrowding and inhumane treatment, as has been graphically recorded in recent months.
  In December, the new chief inspector of prisons, Sir David Ramsbottom, pulled his inspection team out of Holloway. The team included a past governor of that establishment. Sir David reported that prisoners were being locked up 23 hours a day. Prisoner officers complained that they were being forced into acting like 18th-century turnkeys. Conditions were reported as extremely dirty. The Minister of State admitted that she had visited the prison six months previously.
  More recently, newspaper reports emerged of "battery hen" cells, measuring 6 ft by 6 ft, or 8 ft by 8 ft—that is debatable—at Eastwood Park, which have been described by zoo managers as conditions that would drive even animals mad. I know that we can take newspaper hyperbole with a pinch of salt, and perhaps prisoners transferring from tatty dormitories at Pucklechurch might consider their brand new cells an improvement. However, is the Minister prepared to defend such conditions, when women might be locked up in their cells for 14 hours a day, and perhaps more, as at Holloway, particularly in view of forthcoming budget cuts?
  Can the Minister imagine prisoners on basic regimes allowed free association on only two evenings a week, spending their time lying on their beds, their heads inches from their toilet bowls? Does she find that acceptable? A prison officer has been quoted as saying, "I feel like a concentration camp guard." Although it is acknowledged that about a third of the women moving into Eastwood Park are likely to be mentally ill or suffering from a personality disorder, and many have a history of sexual abuse, the health care centre has only 10 cells for an eventual population of 135 prisoners. It seems appropriate at this point to mention the 1991 Home Office study which showed that 56 per cent. of female sentenced inmates were mentally ill. We surely have to ask ourselves whether those women's experiences in prison are likely to help or to hinder their rehabilitation.
  For example, does the indiscriminate use of restraints for prisoners who are sick or vulnerable help? I am sure that the recent furore about the unnecessary shackling of female prisoners in labour will be remembered by the Minister of State for many years to come. Just as that died down, after new guidelines were issued, another story emerged of a woman shackled by two prisoner officers throughout the funeral service for her 10-day-old baby. That woman was obviously not a security risk; she had been allowed to visit her baby in the neonatal intensive care unit at Great Ormond Street hospital without handcuffs or chains. What sort of reign of terror is the Minister presiding over that leads prison staff to abandon all sense of common decency?
  The Royal College of Nursing has specifically requested that I raise that issue with the Minister. I hope that she will agree to its call for an urgent review of the use of restraints for female prisoners. It is a tragedy that high-profile escapes of dangerous male prisoners should have resulted in such inhumane treatment of women, who, as an analysis of the prison population shows, are not a danger to society.

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  Of the 2,000-plus female prisoners, only between 260 and 270 have been convicted of crimes of violence. As many as 35 per cent. of women prisoners are first-time offenders, compared with 12 per cent. of men. Although only 11 per cent. of men convicted of theft are gaoled, the figure for women is 23 per cent.
  As I have said, most of the recent increase in the female prison population is attributable, first, to the increase in the numbers of females sent to prison and, secondly, to the more recent trend of imprisoning women with convictions for theft and fraud, many of whom are in multiple debt, have dependent children and would be better and more constructively punished in the community.
  Considerable concern has also been expressed at the large number of women fine defaulters who are gaoled, not because they wilfully refuse to pay but because they are poor. Since 1984, gaol for non-payment of fines has increased by 63 per cent. for women, but by only 5 per cent. for men. There is plenty of evidence that magistrates are failing in their duty to use prison only as a last resort, and even to abide by their own guidelines. Research—including that carried out by the Home Office—shows that the overwhelming majority of fine defaulters are people struggling to live on benefits. A dossier of cases compiled by Rona Epstein of Coventry university demonstrates that, despite their poverty, many fine defaulters make considerable efforts to pay off their debts but their cases receive cursory attention in the courts, with many magistrates regarding the application for deductions from benefit as creating too much paperwork.
  Home Office figures show that, nationally, only about 2,000 women on income support have fines deducted from benefits. An alternative ostensibly open to magistrates is to impose a money payment supervision order, yet the use of that measure has declined dramatically. Last week, the justices' chief executive from Wolverhampton told me that the probation service was not actioning MPSOs, with the result that this was not an option for the court. Will the Minister take action to put that right? That action must include ensuring that there are adequate resources for the probation service.
  As I have mentioned on many occasions in the House, the courts in England and Wales—unlike their counterparts in Scotland—do not have the option of imposing community service for fine defaulters. It is now more than a year since I raised this matter with the Home Secretary, and I was pleased to see the recent publicity revealing a change of heart from his initial dismissive attitude. I hope that the Minister will announce real progress tonight, because there is plenty of evidence that magistrates are out of touch with the realities of life for people on poverty incomes, whose numbers—unfortunately—have increased dramatically in the past decade or so.
  Although there are examples of good practice within magistrates courts—I would, for example, commend the South Gloucestershire petty sessional division—magistrates frequently make unreasonable demands for sums of £5 or £10 a week from people whose total income is not much more than £50. But the House should not just take my word for it—hon. Members should listen to a
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  quote from an affidavit from Mrs. P. M. Allen and G. W. Catteral, Esq., magistrates from Wigan, about the case of Debra Fitzmartin:
  "Since the last hearing the defendant had paid only a total of £10 resulting in the 21 day term being unaffected. Mr. Rigby then informed the Bench of the contents of Debra Fitzmartin's letter before the Court today. Her written response was to ask the Court to once more grant her a further opportunity to pay, by again postponing the issue of the committal warrant. She had referred once more to her difficulties in making payments due to being a single mother coping with two children, and also that she was now pregnant and experiencing some haemorrhaging resulting in her having to attend her local hospital. She also requested that the arrears outstanding be deducted from her Income Support benefits. Mr. Rigby informed us that case law permitted a committal warrant being issued in a defendants absence provided a means inquiry had previously been held in the presence of the defendant … Taking everything that had been stated in open court into consideration, we were advised by the Clerk that we had to decide if there was before us a sufficient change in Debra Fitzmartin's circumstances so as to justify not issuing the committal warrant. We decided that although there had been a slight change in that she was now expecting a third child and experiencing some difficulty in that pregnancy, such did not amount to a sufficient change. We also concluded that to instruct the Local Authority to withdraw today's proceedings and arrange a deduction from her Income Support benefit was inappropriate in all the circumstances."
  The magistrates ended up issuing a new warrant, committing Debra Fitzmartin to prison for a term of 21 days. This imprisonment was declared unlawful by the High Court in December 1995.
  What troubles me is that no penalty, no inquiry, no retraining or no public censure is imposed on magistrates—there is absolutely nothing. They are carrying on with the same attitudes today.
  Take also the case of Ann, a 25-year-old widow, whose husband committed suicide after being made redundant in January 1993. She was living on income support, with two children aged eight and six. She suffers from severe depression and has attempted suicide. At a hearing before Mold magistrates in respect of poll tax arrears, she told the court of her problems. The magistrates imposed a prison sentence of 28 days, suspended on payment of £10 a week. Not surprisingly, she found that difficult to pay, asked for deductions at source from her income support, and believed that £5 a week was being deducted. However, on 10 November 1995, she was arrested and taken to Risley prison, having been told that there had been a hearing in her absence on 3 November at which she had been committed to prison. After spending four days in gaol, she was released on bail and applied for judicial review.
  A series of cases have been taken to judicial review, which shows that magistrates are breaching their powers in committing fine defaulters to gaol. Since the abandonment of the system that made magistrates take into account people's income when setting the level of fine, poor people have been expected to pay sums that are completely beyond their means and further exacerbate their already parlous financial circumstances. Despite their poverty, it is amazing that many fine defaulters make considerable efforts to pay off their debts.
  Let us consider the example of a woman in Calderdale who, in June last year, was sentenced to 16 days' immediate imprisonment for poll tax default. She is a 40-year-old married woman with four young children—the youngest is one year old. Since the birth of the youngest, she has suffered from a heart condition and

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  general ill health, and in January 1995 had a stroke which caused paralysis. She was in a wheelchair for five months. She tried to pay off arrears, as ordered by the magistrates, but after making some payments had a stroke and entered hospital. She told the magistrates of her ill health and asked for deductions from her income support, but they committed her to prison immediately.
  There is even an example of one woman who was imprisoned for a day at Risley when 74p remained outstanding from a £48 fine for theft. I have here the warrant, which clearly states the amount outstanding as 74p.
  Rona Epstein's research, which I drew to the attention of the House more than a year ago, confirms that there are many unlawful committals, for example, of women with debts of less than £200, who have been gaoled for more than the prescribed seven days.
  Of course, many of the sentences may be considered to be quite short, which means that, although around a third of prison receptions are for fine defaulters, the prison population of such people at any one time is quite small. Those short sentences should not, however, be dismissed as trivial in terms of their effect on people's lives. They may have devastating effects on the imprisoned debtor and her children.
  It is now nearly two years since I introduced a Bill that would have removed the power of magistrates to gaol fine defaulters for culpable neglect. No one would argue against gaol as the ultimate sanction for people who have the money but wilfully refuse to pay, but I hope that I have demonstrated that many fine defaulters, particularly women, do not come into that category.
  Our women's prisons are bursting at the seams, not because there are more criminals—their numbers have gone down—but because petty offenders and fine defaulters are increasingly being sent to gaol, where they will come into contact with the drug culture that pervades those institutions. According to Judge Tumim, they go in as shoplifters and come out as drug addicts. Public money is being wasted. It costs more than £500 a week to send someone to gaol and lives are thrown into disarray by the policy.
  Magistrates must be given the option of passing non-custodial sentences for fine defaulters. Those who cannot pay simply because they are poor must be offered debt counselling and helped into work. Gaoling should never be the option for people who cannot afford to pay their television licence, and I know that many magistrates agree.
  Let us stop sending women petty offenders to gaol and use those institutions to punish and offer effective rehabilitation for persistent and serious offenders, who really are a danger to society. Perish the thought that, at this very moment, the Home Secretary is contemplating building another women's prison. Just a fraction of the money that that would take would work wonders if spent in the community.
  10.18 pm
  The Minister of State, Home Office (Miss Ann Widdecombe): Although I congratulate the hon. Member for Birmingham, Selly Oak (Dr. Jones) on obtaining this debate on what should be an important subject, it was marred by her introduction and some considerable factual
  1286
  errors. She suggested that somehow there had been a deliberate plot to prevent her from having this debate earlier; so great was the national interest in the debate, that we had deliberately frustrated not only her previous debate but the one before and the one before that—all to prevent her from delivering a 15-minute speech. I find that unlikely, but the truth should be put on record.
  The Labour Front-Bench spokesmen were not present to move their motions as they should have been, and the business of the House collapsed. I was most disappointed, because I could not respond to the hon. Lady. She said that I had visited Holloway six months before the inspection. That is amazing. I certainly would not have any locus to do so, because I was not in this office six months before the inspection. Eastwood Park opened not late but on time. The increase in the number of women prisoners is not, as I think I heard her say, 40 per cent. but 21 per cent.
  I object most of all to the hon. Lady saying that I wished to avoid the spotlight falling on the Prison Service. Not at all; I welcome any opportunity for the spotlight to fall on the Prison Service and on its achievements, and especially on its achievements in the three years since it became an agency. I start my reply by again paying tribute to the amazing achievements of both management and staff in the Prison Service.
  Since the Prison Service became an agency in 1993, it has had to cope with a sustained increase in the prison population. As of today, that increase stands at 24.3 per cent. Despite those pressures, by the end of December 1995, escapes were down 83 per cent. compared with the December 1992 figure. When I spoke in the House on 24 January, I reported that 96 per cent. of prisoners had 24-hour access to sanitation, compared with only 70 per cent. in March 1992. I take pleasure in telling the House that that figure has risen to 99 per cent. and will be 100 per cent. by the end of next month.
  Dr. Lynne Jones: Although I commend the achievement of having sanitation in cells, I have visited Winson Green, which admittedly is not a women's prison, where I found the facilities somewhat objectionable. As I said, toilet bowls are close to beds and prisoners often have to sit next to a lavatory, which they sometimes share with another prisoner, and eat their food. That is not a high standard as we approach the 21st century.
  Miss Widdecombe: It is a considerable improvement on slopping out, which in-cell sanitation has replaced. If I have time, I will return to prisoners sleeping with their heads up against lavatories. That allegation was levelled at Eastwood Park. That is untrue, because there is a screen.
  I was talking about the achievements of the Prison Service, and before I reply to the main points that the hon. Lady made about Eastwood Park, the shackling of the lady who attended her baby's funeral and fine defaulters, I want to finish my remarks on the Prison Service. The hon. Lady rightly agreed with my statement on security and rehabilitation. It is worth recording that the service provides almost 300,000 more hours of purposeful activity for prisoners than when it first became an agency. That has been done while the number of prisoners spending more than 12 hours out of cell has risen from 10,400 to 18,700.

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  In keeping with the Prison Service goal to prepare prisoners for their return to the community, which the hon. Lady rightly said was an important goal. provision is being made for national vocational qualifications to be achieved during sentence so that prisoners have tradeable skills in the outside labour market. To the end of December 1995, prisoners had accrued between them 12,447 accredited units. In the past few years, the Prison Service has developed some excellent offending behaviour programmes and we are very confident of their quality and their worth. Although I would like to go on praising the Prison Service, I must turn to the main points that the hon. Lady raised.
  First, I must comment on Eastwood Park—particularly as my right hon. Friend the Member for Northavon (Sir J. Cope) is interested in the subject. I believe that Eastwood Park is located in his constituency, and I am grateful for his presence in the Chamber tonight. The cells at Eastwood Park are exceptionally well laid out. There are screens for the toilet and for the sink. The door opens to a full 90-degree angle and the cells measure 8 ft 9 in by 6 ft ½ in. They do not hold people for 22 hours a day, as a newspaper article alleged. The cells are bedroom cells and prisons will be out of their cells from 8.30 am and will not return to them until 7.45 pm, with just two 15-minute periods per day when there is a roll call.
  The very smallest cells in the prison are below the recommended standard by only 4 in on either side. Some cells in the prison are well above the average and there are segregation facilities and good hospital care facilities. Prisoners at Eastwood Park have moved from a prison where they spent far more time in their cells. At present, no one at Eastwood Park was imprisoned for non-payment of fines. The chief inspector of prisons has conducted an unplanned spot check of Eastwood Park and his report will be published shortly. I do not expect it to be in the same lurid terms as the hon. Lady's description.
  Sir John Cope: I apologise for interrupting my hon. Friend. I have visited the prison in my constituency and I visited the facility when it was a young offenders centre. The old Pucklechurch prison was also located in my constituency and the new prison is a great improvement on that facility. It is very unfair to judge the regime at Eastwood Park in the first three weeks of its operation before it is working properly. Of course it has teething problems, but it will be a much better prison than Pucklechurch.
  Miss Widdecombe: There is no doubt that it is a vast improvement on Pucklechurch. Teething problems in a newly opened prison are not exactly unusual.
  I turn now to the case of the lady who was shackled while attending her baby's funeral. The hon. Lady said as a matter of fact—with amazing confidence—that the lady was not a risk. However, she failed a risk assessment which was carried out before her attendance at the funeral because of
  "her attitude, behaviour and aggressive state together with an alleged assault on a member of Prison Service staff during a previous escort".
  Therefore, she was considered
  "too great a risk to attend the funeral without handcuffs".
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  It is true that the lady was not handcuffed during her visits to her baby while the baby was in hospital. That is because the room in which the baby was kept was secure: it is not because she was considered fit to be in public without restraints. It is essential that, when prison officers and governors are criticised—that is what it comes down to—we get the story absolutely right.
  I turn now to the other points raised by the hon. Lady. She did not leave me a full quarter of an hour in which to reply, so if I run out of time I shall endeavour to respond to her in writing regarding the issues that I do not cover.
  Mr. George Howarth: It is her debate.
  Miss Widdecombe: That is true: the hon. Lady could have left me only one minute in which to respond—or no time at all. I am merely explaining why I shall not be able to cover all the points that she raised. It is merely a courtesy—I do not think that the hon. Gentleman has recognised that fact.
  We must be clear about the types of crime for which women are held in prison under sentence—that subject formed quite a significant part of the hon. Lady's speech. Provisional figures show that one third of sentenced female prisoners held in prison in mid-1995 had been convicted of a primary offence of a violent or sexual nature or an offence of robbery or of burglary. More than one quarter were held for a drug-related offence, with one fifth held for theft or handling and 7 per cent. held for fraud or forgery. At the same time, 26 females were held in prison for non-payment of fines.
  Dr. Lynne Jones: Have those percentages increased at the same time as the prison population has increased, bearing it in mind that the number of crimes has decreased?
  Miss Widdecombe: I am citing the latest figures that we have: I would not give the hon. Lady selective figures. I do not have comprehensive figures beyond those, so I cannot answer the hon. Lady's question precisely. However, I shall look into the matter and, if I can later respond later, I shall certainly do so.
  The hon. Lady also expressed concern—I think reasonably—about imprisonment for fine default. She will be aware that my right hon. and learned Friend the Home Secretary recently announced a review of the powers and procedures available to the courts to ensure that they can enforce the payment of fines without resorting to imprisonment, save in the most exceptional circumstances. I am sure that that undertaking meets the spirit of the hon. Lady's speech.
  I believe that the Prison Service gets a very unfair press and that individual incidents are blown out of all proportion. The day-to-day work done in both our male and our female prisons is impressive and extremely hard and it is carried out in the most difficult circumstances. I have pleasure in paying a tribute that is so noticeably lacking from the Opposition.
  Question put and agreed to.
  Adjourned accordingly at half-past Ten o'clock.