Commons Sitting of 22 May 1996

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

  Adjournment of the House
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Burns.]
  9.34 am
  Mr. Alfred Morris: Thank you, Madam Speaker, for calling me to open the debate. My purpose this morning is to draw attention to a grave injustice and to secure for its victims the humane ministerial response they crave. I hope that the Leader of the House will assist them, as I know he will want to do if he can, by asking the Secretary of State for Health for a helpful statement to incorporate in his reply to this debate.
  Some wrongs are so patently clear that we ought not to have to campaign to put them right. One of the most glaring today is the unmerited extra suffering inflicted on people with haemophilia who were infected with hepatitis C by NHS treatment. They were prescribed under the NHS—3,100 of them—contaminated blood products to correct the severe bleeding that people with haemophilia have to endure.
  Hepatitis C attacks the liver and is potentially life-threatening. Current medical opinion is that up to 80 per cent. of those infected will develop chronic liver disease. Of these, some 20 per cent. will develop severe liver problems such as cirrhosis and liver cancer. More than 50 of those infected by contaminated NHS blood products have already died and the death rate is accelerating.
  Deaths caused by "new" Creutzfeldt-Jakob disease— CJD—cases are running at the rate of five a year. That is fewer than the deaths from hepatitis C caused in the past year by NHS treatment. In the case of CJD, there is no suggestion of NHS involvement; but if those infected with hepatitis C by contaminated NHS blood products had received even a thousandth of the media attention given to the CJD cases, there would be an insistent public demand for Ministers now to meet their plea for help.
  This huge tragedy in the haemophilia community dates back to before 1986, when heat treatment was introduced to end the contamination of NHS blood products. But by then there had been mass infection among them with hepatitis C. In recognition of the scale of the tragedy, the Haemophilia Society launched a campaign in March 1995 for financial and medical help for those infected.
  It is much to the credit of this House that there were right hon. and hon. Members of every party who immediately pledged their support and, as the Leader of the House will know, more than 260 Members of Parliament have now signed my early-day motion backing the campaign. Anyone who looks at its list of signatories
  210
  will see that the issue is treated by the motion not as one between right and left in this Chamber, but of right and wrong. Of very special help in promoting the motion has been the active involvement of the hon. Members for Hendon, South (Mr. Marshall) and for Wealden (Sir G. Johnson Smith)—who co-chairs with me the all-party group of Members of Parliament now assisting the campaign—and of my hon. Friends the Members for Wallasey (Ms Eagle) and for Leeds, East (Mr. Mudie). I want to emphasise here that no one could possibly have done more to promote the cause we have espoused than the hon. Member for Hendon, South.
  To sustain its campaign, the Haemophilia Society recently published the results of in-depth research into the problems and needs of people who were infected but are not yet seriously ill. The report, sent to the Department of Health, documents the damaging impact of hepatitis C not only on individuals but on whole families. It focuses on medical, social and financial problems and makes frightening reading. In case study after case study families are seen trying to cope with sickness, loss of income, loss of jobs and loss of independence. Individuals with the disease, while trapped in an uphill struggle to maintain their families, have to live day by day with what they know could soon become a terminal illness.
  One of the most urgent needs now is financial help to loosen the vice of reduced earnings and increased costs. That is why the Haemophilia Society is calling urgently for cash grants from the Government for those infected and the dependants of those who have already died.
  The society's plea does not, however, stop there. It seeks funding for appropriate treatment and counselling as well as clear guidance from the Department of Health on the management and treatment of hepatitis C. Again, more research by the Government is requested. While £1 million has been put aside for research into the prevalence, transmission and natural history of the virus, the Haemophilia Society also wants to see research into treatment therapy, more particularly combination therapy.
  Other pressing needs are for a public education programme to explain the facts and dispel the myths about hepatitis C; and for the funding of recombinant clotting factors to replace plasma-derived products that caused not only the hepatitis C infection but the HIV infection among people with haemophilia. It is emphasised by the society that recombinant products are free of the risk of blood-borne viruses and would thus exclude any third tragedy for the haemophilia community.
  The call for help from those with hepatitis C has to be seen in the context of what was done to assist the 1,200 people with haemophilia who were infected with the HIV virus by NHS treatment. The hepatitis C infection took place at the same time as the HIV infection. The cause was the same: contaminated blood products used in their treatment. The effect can be equally deadly. Yet those infected with hepatitis C and their dependants now receive nothing from a Government who provided £70 million in financial support for those infected with HIV and instituted a hardship fund—the Macfarlane fund—to give continuing support. The Government accepted their moral responsibility in the case of HIV. Now they have the same responsibility in the case of hepatitis C.
  The fate of three brothers says it all about the depth of the injustice to the 3,100 people with haemophilia who were infected with hepatitis C. All three brothers had

  211
  haemophilia. Two were infected with HIV by NHS treatment and the other with hepatitis C. All have subsequently died from the infections. The brothers with HIV received financial help from the Macfarlane trust and so were able to make some provision for their families. The brother who died from hepatitis C went to his grave having been denied financial help. He was thus unable to make any provision for the future well-being of his family. All three brothers became terminally ill. All died as a result of infection through NHS treatment, yet only two received help. For anyone to call that fair or even tolerable is to bark not just up the wrong tree, but in the wrong forest.
  It may be argued that compensating the people infected with hepatitis C would take money away from patient care in the NHS. But in the case of HIV the payments made to those infected came from contingency moneys and this is what the Haemophilia Society is asking for now in the case of hepatitis C. It simply wants the terms of reference of the Macfarlane trust to be extended to include those infected with hepatitis C. Its claim is an extremely modest one measured against the pain and suffering inflicted on those for whom the contaminated blood products were prescribed and their families.
  While representatives of the Haemophilia Society have been given a sympathetic hearing at a meeting with the Under-Secretary of State for Health, the hon. Member for Orpington (Mr. Horam), the Government have still to respond to its report about the damaging effects of the contamination on its victims. But Ministers can no longer claim not to know what needs to be done and it is now their bounden duty to act. If they will not do so and the campaign for recompense has to go on, then go on it will and with renewed urgency until justice is done.
  9.44 am
  Sir Ivan Lawrence: Before the House rises for the Whitsun recess, we need to be reassured that the Government fully appreciate what the European Court of Justice has done, is doing and will—unless stopped— continue to do to the powers and laws of this justifiably proud nation state.
  At last, the extent of the powers that we have allowed the court to have is being brought home to us all. We are to pay £30 million in compensation to Spanish fishermen who took and used British quota through the simple device of buying British-registered ships, which this British Parliament specifically said should not happen when we passed the Merchant Shipping Act 1988. We are threatened with an absurd 48-hour limit on the working week, which nearly all of us will have to follow despite the Prime Minister's specific and conceded opt-out of the social chapter at Maastricht. The ban on our worldwide export of probably the safest beef in the world is said by our European partners to be in accord with powers vested in them by the treaty of Rome, which they expect to be upheld by the European Court of Justice, which overwhelmingly supports the European Union against the nation states throughout Europe, not only Britain.
  It is now becoming clear, although the matter does not receive much coverage in the media, that we have acquiesced in the creation of a power-hungry mechanism that appears programmed to destroy our national
  212
  sovereignty widely, deeply and permanently. This is not the thing we thought it was, and it is certainly not the thing we expected or wanted it to be when we voted to join, and when we voted to stay in, the Common Market.
  We were told in the judgment of a court case in 1992:
  "As the Court of Justice has consistently held, the Community treaties established a new legal order for the benefit of which the States have limited their sovereign rights, in ever wider fields, and the subjects of which comprise not only the member-States but also their nationals. The essential characteristics of the Community Legal Order which has thus been established are in particular its primacy over the law of the member-States and the direct effect of a whole series of provisions which are applicable to their nationals and to the member-States themselves."
  That is news to most of us.
  Of course we knew when we joined, and when we decided to stay in, that we had surrendered some sovereignty to a trading bloc, and we knew and accepted the need for a court to ensure that there was an even application of Community law and to protect the nation states from abuse of power by Community institutions. But we did not realise that we were subjecting ourselves to a court that practised what the former warden of All Souls, the distinguished lawyer Sir Patrick Neill, called "creative jurisprudence"—interpreting conflicts expansively instead of restrictively, as our courts are accustomed to do.
  The European Court of Justice has been steadily interpreting the treaty of Rome so that it is made to say what no one thought it said. The reason is that it has been acting less like a court of justice and more like a court with the political mission of political union. The court set out its new status in the passage to which I have already referred. The role of the court has changed: it used to operate in "a limited field", but it is now operating in "ever-wider fields". The European Court of Justice believes that the treaty has empowered it to become the engine of a federated super-state, a united states of Europe to be served by a supreme court. The purpose of a supreme court is to serve the written constitution of a state. It has become the powerhouse of that united state.
  Sir Patrick Neill QC, in an address to the European research group—which is led by my hon. Friend the Member for South Worcestershire (Sir M. Spicer)—said:
  "A court with a mission is a menace. A supreme court with a mission is a tyranny."
  That prompts the question: do we need such a court? The European Economic Area treaty achieves free movement of goods and services, competition and deregulation without the need for a supreme court. The general agreement on tariffs and trade functions without the need for a supreme court. It is enough to have a simple procedure for settling disputes.
  It is no surprise—with the philosophy of a supreme court to serve the constitution of a political union operating over and above nation states—that the European Court of Justice, which consists mainly of civil servants and academics from different political cultures and traditions, has been overruling our courts. It has been telling our courts what they must do and it has even been trying to overrule our democratically elected Parliament. Like pac-men, the European Court of Justice has been busy gobbling up the powers of nation states.
  How has that position been developing? I shall give some examples. First, the European Court of Justice has altered the powers allocated to it—it operated in "limited

  213
  fields", but it is now operating in "wider fields". Secondly, the court has said that the treaties make rights and duties directly applicable to individuals without any need for national laws to authorise them—there was nothing about that in the treaties. Thirdly, it has ruled that a treaty has to be interpreted not merely according to the wording of its provision, but by reference to what it considers to be the spirit of the provision. That is dangerous and we pointed out that reliance would be placed on the preamble, which is a process that we do not accept in this country. We had long debates about Maastricht in the Chamber.
  Fourthly, the European Court of Justice has held that directives, which the treaties do not make binding, must also have direct effect without the need for legislation to be passed by national legislatures. Fifthly, it has invented an action for damages against any state that is impertinent enough to fail to implement a directive—there is nothing in the treaties about that. Sixthly, the European Court of Justice now asserts a power to limit the retroactive effect of its judgments—again, there is no such power in the treaties.
  Seventhly, the European Court of Justice is not satisfied with all that law making, and it is hungry for more power: it has extended its jurisdiction so that it can review the legality of decisions made by the European Parliament— there is nothing about that in the treaties. Eighthly, the European Court of Justice now allows the European Parliament to challenge the acts of the Council of Ministers—if that is not changing the law while pretending to interpret it, I do not know what is. As a result of that, the powers had to be enshrined in the Maastricht treaty.
  Ninthly, the European Court of Justice has expanded its jurisdiction to rule on the decisions of the body that decides on association agreements between the European Union and other states, such as Turkey—there is nothing about that in the treaties. Tenthly, it has decided that it could assist in criminal investigations by national courts— there is nothing about that in the treaties. In 1992, it decided that national courts could be allowed to declare Community actions valid, but that they could not declare Community actions invalid. And so it goes on.
  It appears that we must now be bound by a retrospective law, contrary to our traditions, and that we must pay ship money to those who, by any test of common sense, are not entitled to it. If we do not act, that will continue to go on and on.
  What can be done? The Government's White Paper recognises that change is necessary, and I suspect that it has the complete support of every hon. Member.
  The few Europhiles in the Chamber and in the country often say that the Euro-sceptics—who overwhelmingly want to see Britain remain in the European Union; there are very few Euro-sceptics who want to see Britain pull out of the European Union—are a minority. That is rubbish. The Euro-sceptics are an overwhelming majority not only on Government Benches and, I suspect, on Opposition Benches, but in the country at large.
  There will be support for the Government's White Paper recommendations. There is reference to the functions of the court being further improved, to judgments giving cause for concern and to the European Court of Justice interpretation sometimes going beyond what was intended. The White Paper suggests that
  214
  damages should be only for serious breaches, that retrospectivity should be limited and that time limits should be introduced for the bringing of cases. It suggests that an internal appeals procedure should be introduced, subsidiarity clarified and procedures streamlined.
  But limiting the expansion of powers is one thing; we need to cut back on the current powers of the court. On 24 April, the Prime Minister said to the Institute of Directors:
  "I can tell you … I have no intention whatsoever of going down the route to a federal Europe."
  On 11 May, the Prime Minister told the Scottish party conference:
  "Yes, Britain must be a part of Europe and a partner of Europe, but a Europe of nations, not a united states of Europe, not a federal Europe. Once again I make this pledge: while I am Prime Minister, if others should opt for such a Europe, Britain will not be part of it."
  Hon. Members will be heartened by those statements and their application to the European Court of Justice. We look forward to the memorandum that will set out in detail the proposals laid down in the White Paper. However, we must go further than the Government envisage. We should be able to see which judges are being too political or are acting in the national interests of their country, so the court's proceedings and the judges' reasons should be published. Why is that not being done already? We should require judges of the European Court of Justice to be more than just civil servants and academics. They should have experience as judges in their countries—only four out of the 15 present judges have such experience.
  We should ensure that European law is no longer directly applicable to individuals and businesses within the European Union unless the nation states so legislate. Such a rule would prevent the European Court of Justice from extending European Union competence without the consent of the nations. If that extension is not halted, we shall not prevent the march towards a federal Europe to which my right hon. Friend the Prime Minister is so opposed. The European Court of Justice must be denied all legislative functions. We must amend the 1972 treaty—by agreement if possible—to restrict the court's powers and to stop future expansion. We must do all that we can to ensure that the powers of the nation states are restored.
  A great deal of work must be done in order to restore Britain's powers. Harsh conclusions must be drawn not just by lawyers, but by politicians. The agreement of our European partners—who are rooted in different legal cultures and have different political aims—may not come easily, and action by Britain alone may put at risk our membership of the European Union. However, it is clear that the British people are angry about the loss of national power and control. They require their democratically elected representatives to do something about it, and the political party that acts to protect national sovereignty will be more likely to benefit from their gratitude.
  There is no clearer starting point than limiting the pac-man tendency of the European Court of Justice. Before the Whitsun recess, I ask my right hon. Friend the Leader of the House to give an assurance that the Government are contemplating precisely that sort of action.
  10.1 am
  Ms Glenda Jackson: My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) began this morning's debate

  215
  by raising a matter of injustice. The hon. and learned Member for Burton (Sir I. Lawrence) has spoken—I thought somewhat unconvincingly—about restoring power to nation states and reducing the influence of the European Court of Justice. I, too, wish to raise a case of gross injustice but, regrettably, it concerns an area where injustices are the norm rather than the exception and where the majority of people are desperate for the services of a free court of justice.
  I refer to a case involving my constituent Adefolahan Mokuolu, who is a British citizen. On 23 April, he visited Nigeria for the first time and he was abducted from his father's home in Anthony village, Lagos, by members of the Nigerian special security forces. He has been held virtually incommunicado from that date, at what I believe are the forces' headquarters at 2 Park lane, Apapa. An appalling case becomes doubly so when one learns that my constituent is 13 years old.
  When my constituent's mother alerted me of the incident on 9 May this year, I immediately contacted the Nigeria desk at the Foreign Office, and the officers were extremely helpful in contacting consular officials in Lagos. I also alerted the acting high commissioner at the Nigerian high commission in London, Mr. Okeke. As yet, I have received no positive response from him other than confirmation that he sent a copy of my fax to headquarters in Lagos.
  My constituent was born on 1 March 1983 at St. Mary's hospital, Hackney. He attends a school in St. John's Wood. He is passionate about football. He is a British citizen who was on his first visit to Nigeria. He loved the country. He met his mother's relatives for the first time and he enjoyed the company of a large, extended Nigerian family. The Nigerian Government argue that, because both of his parents are Nigerian citizens, my constituent has dual nationality and they have therefore twice denied British consular officials access to him. That is absolutely appalling.
  On the first occasion that British consular officials presented themselves at 2 Park lane, Apapa, the special security forces denied that my constituent was being held. On the second occasion, consular officials arrived at the same time as one of the uncles of my constituent who had taken food to the boy during his incarceration. Access was again denied to British consular officials, and my constituent's uncle was warned that if he made any attempt to approach those officials, his life would be in danger.
  When I inquired of my constituent's mother why she thought that her son had been abducted in that heinous manner, she said that it was because his father is the cousin of a previous Nigerian President, Major-General Odasanja. It is totally unacceptable that a 13-year-old boy who probably has no interest in the politics of his own country—the United Kingdom—could be deemed to be interested or active in the politics of Nigeria. It is also totally unacceptable that he is still being held virtually incommunicado.
  On 16 May, the boy's uncle was allowed to see him. I have since heard that the special security forces are feeding my constituent, who has his own room, and I understand that they are washing his clothes. However, no one is allowed to see him without a guard being present.
  216
  It is not acceptable that a 13-year-old British citizen, who has been raised as a British citizen and who regards Britain as his home—which it is—should be incarcerated in that way. I am grateful for the assistance that I have received from the Nigeria desk and the Foreign Office. I have alerted the Foreign Secretary and the Prime Minister to the conditions in which my constituent is being held.
  I felt initially that British consular officials in Lagos were not responding as energetically and persistently as I desired. However, they are now pursuing the case. I appreciate the difficulties faced by all consular departments in attempting to deal with a regime that has little or no regard for human rights or civil liberties. I urge the Leader of the House to make even stronger representations to his right hon. Friends, that the case be placed at the top of the list for action by consular officials in Nigeria. Representations about the case should be made not only to other Commonwealth Governments, but to our European allies.
  When I received information that my constituent's uncle had been threatened by the special security forces and warned not to attempt to contact British consular officials, I was doubtful as to whether it was wise to raise the issue on the Floor of the House. We are a long way from Nigeria, but it would be entirely possible for that brutal regime to punish my constituent's relatives if it so chose. Therefore, I attempted to obtain as much impartial advice as I could.
  I am grateful to my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), who put me in touch with the Commonwealth Parliamentary Association secretariat. I cannot speak too highly of the assistance that it gave me in contacting other members of the Commonwealth and introducing me to expatriate Nigerians. They all advised me to speak out in the House and alert hon. Members to the gross abuses that are being visited upon a British citizen of such a tender age, who is so far from home and on his first visit to that country. I am sure that everyone will find the painful story that I have related this morning both shocking and unacceptable.
  I hope that the Leader of the House can reassure me that every effort will be made by the Foreign Office and consular officials to restore my constituent to his home in the shortest possible time. His mother, Mrs. Christine Mokuolu, flew out to Nigeria last Sunday so that she could be closer to her son. As yet, I have no news that she has been allowed to visit him, but I sincerely hope that that will be the case—and that such pressure as can be brought to bear on the Nigerian authorities will ensure that Mrs. Mokuolu and her son will be allowed to return to their home as soon as possible.
  10.9 am
  Mr. David Nicholson: I want to raise two unfinished pieces of business before the House adjourns for the spring bank holiday recess. You, Mr. Deputy Speaker, will recall that my speech last Thursday on the beef crisis was—for reasons that I perfectly understand— terminated mid-sentence by you, as I was reflecting on the consequences of the ban on British beef for our relations with the European Union. Happily, I not only have the opportunity to return to that subject this morning but do so in the light of the important statement yesterday by my right hon. Friend the Prime Minister.

  217
  Nye Bevan said 40 or 50 years ago that Britain was an island built of coal and surrounded by fish. If he had been more of a countryman, he might have said also that it was a nation of beef eaters, and coal, fish and beef have dominated this Parliament well beyond the point of representing the interests of the communities immediately affected. When we dealt with the coal issue four years ago, I received several hundred letters from my constituents, many of them Conservative supporters, even though there is not a coal mine anywhere near Taunton or Somerset. That response reflected the fact that coal was a traditional industry. Similarly, my constituency is landlocked but my constituents have a considerable interest in the way in which this country appears to have been done down over the handling of the common fisheries policy.
  Concern about the beef industry extends far beyond the people in farming or the food industry, who are most affected. The public realise that, even though we are about to enter the third millennium, our traditional industries are still established sources of British strength and economic power. When my speech was terminated last Thursday, I was about to reflect that the sole casualty of, in part, the beef ban would be support by Conservative Members and the public, particularly in the countryside, for Britain proceeding in the foreseeable future to European monetary union. The point would be crudely put that, if we cannot trust our European partners to take account of our interests in such a limited matter—but important to us—as the beef industry, surely we cannot allow Europe's collective thumb to be placed across our economic windpipe.
  My view is reinforced by arguments that my right hon. Friend the Prime Minister has used in private and in public as to the difficulties inherent in a speedy, and perhaps botched and limited, monetary union; by the impressive article in The Times yesterday by Professor Nöolling, who served on the Bundesbank council between 1982 and 1992; and by not only small firms—which have always been aware of the risks to this country of proceeding to monetary union and a single currency—but larger companies.
  My right hon. Friend the Prime Minister and the Government have been unjustly accused in the press of dithering in respect of the beef crisis. I said yesterday to my right hon. Friend that the Government have exercised great patience with our European partners. British Ministers wanted time and again to let our European partners resolve the issue by diplomacy and negotiation. Our hopes have been raised at least six or seven times, only to be dashed a day or two later. I understand the legal restraints on Britain taking trade or financial reprisals, so I welcome yesterday's statement as being within the bounds of law—and it seems from today's reaction that it will have a suitably disruptive effect on European Union procedures over the next month. That will give our partners a considerable incentive to resolve the matter in a sensible and civilised way. It was clear yesterday that the Leader of the Opposition was uneasy about how to respond.
  Some people argue that the intentions expressed in yesterday's statement will make matters worse, but I do not agree. If it does make matters worse, that will be largely up to our European partners. If they settle in for a long siege, so be it. They must remember the strong political feeling engendered in this country over the past
  218
  eight weeks in addition to the existing discontents with the European Union—one of which was spelt out this morning by my hon. and learned Friend the Member for Burton (Sir I. Lawrence) in his impressive and scholarly speech. Fisheries policy is another. I find that, in my constituency—and I suspect that my hon. Friends have similar experiences—supporters who have worked hard for Conservative Members of the European Parliament and for the European cause in the past are joining the ranks of the most critical.
  Mr. John Marshall: Has my hon. Friend seen the report in today's Financial Times that the European Parliament's administrative budget has risen from 596 million ecu in 1994 to a proposed 934 million ecu in 1997—an increase of 56.7 per cent? Does not my hon. Friend regard that as grossly extravagant and demonstrating that there is no desire in that organisation to control costs?
  Mr. Nicholson: My hon. Friend makes a valid point, and leads me on to my next point.
  Our European partners must not only take account of indignation with the way in which our European partners have handled the beef issue over the past few weeks, and of strong support for my right hon. Friend the Prime Minister, but of the facts that the UK has for years run a sizeable deficit on trade with Europe in food and drink, and on wider trade; that we pay more into the European Union than we get out of it; and that the UK pays more in than any other country except Germany. Those financial points, in sheer cost, must be taken into account as we proceed with these matters.
  A couple of days ago, the right hon. Member for Yeovil (Mr. Ashdown), the leader of the Liberal Democrats, claimed in a speech that a spate of xenophobia is rushing through the Conservative party and that the Prime Minister is exploiting that xenophobia. My hon. Friends must speak for themselves. I do not think that my hon. and learned Friend the Member for Burton is xenophobic—I certainly am not. As the Prime Minister said yesterday, a majority of EU countries backed our attempt to end the ban on beef products. That does not exactly seem like the fruits of xenophobia to which the leader of the Liberal party referred.
  We welcome the help that France has given us in recent days, following the highly successful visit to this country of President Chirac. He made an impressive speech to both Houses of Parliament in the Royal Gallery; I did not agree with every word of it, but given that France and Britain have had a long rivalry, it was a friendly speech too. Of all the countries in the European Union, France and Britain are the most similar in terms of history and tradition. But that similarity often produces intense competition, politically, militarily, economically and commercially. The pressure in France to lift the ban on British beef derives from the fact that the French want to buy it and thus have an interest in importing it.
  Moreover, the French people and, increasingly, French politicians are as suspicious of federalism and centralisation in Europe as we have become. In 1992, before the difficulties arose with the Maastricht treaty debate and before the French referendum, a group of mayors and other dignitaries from a part of Normandy— les sept villages rln Vexin—that had been hotly disputed

  219
  by England and France in the days of King John came to my constituency, to North Curry, for a twinning ceremony. During the celebrations, one mayor, speaking of the Maastricht treaty, told me that the French expected the English to "stop this sort of thing". For a long time now, that has been our experience in the European Union. People in other countries dare not put their heads above the parapet but expect us to fight their battles for them.
  A colleague told me the other day that, at the time of the Maastricht treaty, he met a group of doctors in France and asked them what they thought of the treaty. They said that they were against it. My colleague asked whether they had made their position clear. "Oh no," they said, "if we did that, the Government would cut off all funding to our organisation." Of course the Government at the time were the socialist Government of President Mitterrand.
  So this country does not need to resort to xenophobia, because even in this commercial matter of beef we increasingly find that we have allies in Europe.
  Mr. John Carlisle: While my hon. Friend is on the subject of twinning, he might like to comment on a case highlighted in this morning's paper. A village in his county, near Wellington, is expecting German visitors next week as part of the twinning process. The Germans are insisting that they must not be served British beef during their visit. As my hon. Friend represents that county, I am sure that he shares my anger and disappointment at the Germans' attitude to what should be a friendly visit.
  Mr. Nicholson: I was coming to the Germans. I will look into the matter; it is outrageous that they should refuse to eat one of our healthiest and most staple products. I gather that the German players who will take part in the international football tournament here in a few months' time are insisting that the beef they eat be imported from Germany. They are not prepared to eat ours—
  Mr. Tony Banks: Before the hon. Gentleman takes off on a flight of fancy, I might point out to him that most national football teams take their own chefs and food with them, for a variety of good reasons. The eating habits of a football team are often reflected in the way the team plays on the pitch—which is probably why our football team plays crap.
  Mr. Nicholson: I defer to the hon. Gentleman's greater knowledge of the subject.
  On Radio 4's "World at One" programme on Monday, there was an interesting discussion of the Germans and how they differ from other Europeans. They are obsessed with health. Perhaps that might be justified by cartoon depictions—and sometimes the reality—of Germans on the beach. But it is their obsession with health that has led them to adopt their extraordinary position on British beef—and on German beef and on all kinds of meat. It has caused them considerable problems along the way.
  Mr. Jon Owen Jones: Does the hon. Gentleman agree that, if we had been a little more obsessed with health in the early 1980s, we would not be faced with the BSE problem now?
  Mr. Nicholson: Like many of his hon. Friends, the hon. Gentleman cannot extricate himself from the warped thinking which has led his party to contribute so much to our continuing national difficulties on this matter.
  I want to issue three cautions in this debate. First, I urge Ministers to make it clear—the Prime Minister did yesterday, but the point must be repeated over and over again—that we are interested not just in lifting the beef products ban, which accounts for only a few million pounds' worth of exports, but in a speedy and businesslike timetable for lifting the ban on the whole beef export trade, which is worth about £500 million.
  Secondly, Ministers must be absolutely clear in their own minds what they plan to do following the intentions announced yesterday. There is no need to broadcast the details continually, which is why the Prime Minister was wise not to respond specifically to some of the questions asked yesterday; but there must be no backsliding. If we do not get fair treatment, we must act accordingly.
  Thirdly, Ministers must not use the European row as a figleaf to cover up deficiencies in the way the Ministry of Agriculture, Fisheries and Food and the bodies aligned with it sort out the problem in the United Kingdom. I refer of course to the beef cull. Yesterday hon. Members representing the south-west received a briefing from the south-west branch of the National Farmers Union. I ensured that my hon. Friends the Parliamentary Secretaries to the Ministry of Agriculture, the Members for Tiverton (Mrs. Browning) and for Daventry (Mr. Boswell), had copies with them yesterday on the Front Bench when the statements were being made. The briefing does not make easy or happy reading. The leader of the Liberal party, whom I have on occasion criticised, referred to the deficiencies affecting the abattoirs in the south-west, whose throughput has been halved in the past few days, apparently because of the need to bring another abattoir on stream in south Wales.
  These problems need sorting out. I know that the Leader of the House heads a Cabinet Committee on this matter, and I stress to him that if, when the House returns after the recess, we are still encountering the same sort of difficulties as farmers, abattoir managers and others have faced in the past week, Conservative Members will strongly criticise the officials concerned, and we will draw our own conclusions about the control and responsibility being exercised by Ministers. I hope that those warnings are heard.
  The second unfinished matter to which I shall refer relates to the Housing Bill. My right hon. Friend will recall that the debate on the homeless provisions of that Bill was attenuated the other week and that I raised the matter at business questions. The issue has interested many of my constituents who are not and do not expect to be affected by homelessness or homeless provisions. That demonstrates the ability of the British people in general, and my constituents in particular, to take a reasoned interest in matters that do not directly affect them-—whether it is in the interests of the country or the interests of compassion and the decent treatment of others.
  The changes in the legislation that is now in the other place should be clear and justifiable and should not penalise people who have no alternative but to seek help from local authorities or housing associations. It is a complex matter and I was not proposing to oppose the Government's measures—I wanted to clarify them and debate them.

  221
  I feel strongly that young people in particular should live at the family home, if that is possible. We have to use our existing housing stock more effectively rather than consistently building on green-field sites, whether for owner-occupation or for housing associations. I am aware of much stronger resistance to such housing development than existed in previous years. On Monday, the Western Daily Press devoted a full page to housing developments on green-field sites being earmarked for major housing expansion throughout the south-west—in Somerset, Wiltshire and Dorset. Those developments will encounter considerable difficulties as they go through the planning process.
  Some young people clearly cannot live with their parents, but they should not always expect to be housed by the public sector if they come to Taunton, which is a major railway and road focus, to Somerset or to the south-west. The south-west seems to attract many young people—possibly as part of the traveller cult or because the area is so attractive. I do not believe that that can be justified by economic factors as unemployment levels in the north and the south have drawn closer in recent years. We no longer have a pattern of people moving from unemployment black spots in the north to fill job vacancies in the south. That is regrettable for those of us who live in and represent the south, but it is an economic factor that also has certain benefits.
  I make those provisos to assist Ministers in proceeding with the Bill. Local people deserve suitable priority on housing lists, which should not be interrupted or replaced by the pressure of so-called homeless people from elsewhere. At the same time—as I said in an intervention on my hon. Friend the Minister for Local Government, Housing and Urban Regeneration during our brief debate on the matter—I appreciate that in my constituency, and no doubt elsewhere, there has been an unsatisfactory provision of private rented accommodation which means that the presupposition in the Bill that homeless people should first be housed in the private rented sector should not always be followed through too rigidly.
  I am grateful that my hon. Friend the Minister for Local Government, Housing and Urban Regeneration has agreed to see me and one or two of those involved from Taunton Deane borough council and from the local office of Shelter who have been extremely helpful to me.
  I have long wanted to revive the private rented sector. I lived in quite satisfactory private rented accommodation in London from 1966 to 1976. However, I realise that the private rented sector—particularly the traditional little old lady who rents out rooms in her house—has declined over the past 20 years, partially because of Government policy, and that although it has revived somewhat, it is predominated by absentee landlords owning bed-sitters that are not always satisfactorily managed and do not always attract satisfactory tenants into the neighbourhood. We need to get those matters absolutely right before the Bill proceeds finally into law.
  I emphasise that public concern for decent treatment for homeless people is greatly met by the Government's rough sleepers initiative, which has been successful in London and has been expanded into other centres all over the country. It requires proper co-ordination between central Government, local government and various voluntary organisations.
  Most homeless people do not just have the problem of absence of a secure home. Many of them have been involved with drugs or alcoholism or come from disrupted
  222
  homes. There is work for all organisations involved in helping those young people—whether they are voluntary or social organisations or simply provide housing. I would like it no longer to be necessary for such young people— I saw them again last night in the west end of London— to have to sleep rough and beg. We all regret that the cult of begging is increasing, and it is not justified. I would like those issues to be challenged by further successes for the rough sleepers initiative in London and elsewhere.
  10.36 am
  Mr. Don Dixon: I shall intervene briefly in today's adjournment debate to raise my constituents' objection to the proposed privatisation of the Port of Tyne authority. Before I do so, I should say to the hon. Member for Taunton (Mr. Nicholson) that Nye Bevan did not include beef in his famous statement about being surrounded by fish and living on coal, because many of the people he represented could not afford to buy beef.
  The fact that I am raising an issue during a Wednesday morning Adjournment debate brought about by the Jopling changes does not mean that I agree with the Jopling changes. I opposed them when they were introduced, I am still against them and I certainly do not condone them. In my view, the implementation of the Jopling recommendations and the clean feed to Members' rooms has made the Chamber virtually redundant. However, I shall not press my views on the Jopling recommendations, bearing in mind that the senior salaries review committee is still sitting.
  Privatisation is raising justifiable fears in my constituency. I do not believe that the proposals are in the best interests of my constituents or of our region, and they are opposed by the Port of Tyne authority, local authorities in the area and many of the port users.
  Having been born within a thousand yards of the banks of the River Tyne and having spent most of my working life working in shipyards there, I should draw the House's attention to the importance of the port of Tyne.
  The River Tyne once had a shallow entrance that became troublesome as ships steadily grew in size during the 17th and 18th centuries. The Tyne improvement commission was established by an Act of Parliament in 1850. Its task was to carry out such schemes and works to make the river safe and accessible for modern ships, and to provide facilities for increasing seaborne trade.
  In the first 20 years, the commission had 50 million tonnes of spoil removed from the river. Anyone who knows anything about rivers will realise the scale of dredging for that amount of spoil. The Tyne improvement commission's works have proved to be far-sighted. When it laid its plans, virtually all the vessels using the port were sailing craft of less than 1,000 tonnes.
  Today, the Tyne regularly accepts ships of more than 45,000 tonnes in dead weight, and dry dock vessels weighing up to 100,000 tonnes. Indeed, hon. Members may have seen on television last night the giant 80,000-tonne bulk carrier Solitaire being taken to the Swan Hunter shipyard. That will provide some work for those who were made redundant when Swan Hunter unfortunately closed some time ago.
  The commission built the Northumberland dock and the north and south piers. Within 50 years of the setting up of the commission, the port as we know it today was

  223
  mainly in place. The commission continued to manage and improve the river as an engine of economic growth until 1968, when it handed it over to its successor. The Port of Tyne authority was set up under an Act of Parliament as a trust port to control the facilities that were previously operated by the commissioners.
  The earliest trade on the River Tyne was in grain and forest products from the low countries, Scandinavia and the Balkans. Those areas are still important today, but the port's interests now also extend to the far east, Australia, south-east Asia, India, the middle east, Canada and the Americas—in fact, all over the world. The port regularly handles valuable metals, vehicles, offshore equipment, foodstuffs, machinery, clothing, chemicals, oil, scrap metal, and, of course, coal.
  Last year, the port exported more than 1.8 million tonnes of coal and coke, and of course we sent Andy Cole to Manchester United. The port also exported more than 28,000 tonnes of chemicals, 180,000 tonnes of grain, 175,000 cars and other vehicles and 316,000 tonnes of general commodities. Its cargo handling facilities dealt with exports and imports in excess of 3.7 million tonnes. With its royal quays in North Shields, the port of Tyne provides the most northerly terminal on the east coast for passengers using sea routes to Scandinavia. Last year, more than 360,000 passengers and almost 60,000 cars used the port.
  The port of Tyne is now one of the most efficient and flexible ports in Europe, and is engaged in a further investment programme to increase its capacity and quality of service to port users. In the past 12 years, the Port of Tyne authority has invested more than £45 million in berths and equipment. That investment has been complemented by facilities built by port users and industrialists in the area. The port authority has played a major role with developing agencies such as the Tyne and Wear development corporation and others to attract investment and new industries.
  The port of Tyne has large capital reserves. I am informed that trading produces a current annual profit of £5 million from a turnover of £15 million. It has no outstanding debts. Such healthy figures are likely to make the port attractive to asset-stripping bidders. We are used to asset strippers in my area. In fact, on the riverside of Jarrow, a statue of Charles Mark Palmer looks over the River Tyne. Charles Mark Palmer set up the old Palmers shipyard, which at one time employed more than 10,000—mostly skilled—men.
  The asset-stripper Shipbuilding Security Ltd. was set up by shipbuilders, shipowners and merchant bankers in the 1930s. It came to Jarrow, decided to close Palmers shipyard and sell off the assets, and placed a 40-year embargo on the building of ships. So we have experience of asset stripping, and are concerned that it might happen to the port of Tyne if some company comes along with an asset-stripping bid. Purchase by another port is also possible. That would of course mean rationalisation of the port's services, and the port of Tyne could again lose out.
  I am also informed that the proceeds of any privatisation would go to central Government. As the port of Tyne was formed as a result of locally generated investment in trade and by local subscriptions, such a process would be an unfair extraction of regional
  224
  resources by central Government. There has been a decline in the export of coal and coke—between 1990 and 1995, it fell by more than 600,000 tonnes—so there is a great need to invest in new facilities.
  A recent example of such investment is the construction of the Nissan car handling facility and container sites. The capital resources of the Port of Tyne authority are needed for further investment on that scale. Privatisation could lead to a reduction in developments, mainly because the maximising of profits in the short term could replace longer-term development as the priority of any new owners and shareholders.
  Originally, a number of trust ports were to be privatised by the Government, including Dover. I believe that even Vera Lynn became involved in the public outcry about the proposed privatisation of Dover, and it was dropped from the scheme. One wonders whether Government policy is determined by such public outcry. If Vera Lynn had sang about fog on the Tyne instead of bluebirds over the white cliffs of Dover, perhaps the Government would have changed their policy and dropped the port of Tyne from their privatisation scheme.
  Since such privatisation will pass through the House by means of a negative resolution, this may be my only opportunity to raise the issue on the Floor of the House. I appeal to the Government not to privatise the Port of Tyne authority. It is important to the revitalisation of our area, it is doing a good job, and it should be allowed to get on with it.
  10.45 am
  Mr. John Carlisle: The House will have listened with interest to the remarks of the hon. Member for Jarrow (Mr. Dixon), recognising that, because of his position in his party, he has little opportunity to speak. I found his speech informative. I know the port of Tyne. Indeed, in the halcyon days when I did a proper job before I entered the House, I used to ship a great deal of grain from the port. He is right to bring the very important subject before the House.
  Other ports that have been privatised and have taken the private capital from the process, which the port of Tyne desperately needs, have been extremely successful. I personally hope that the port of Tyne goes down that road, but I bow to the superior knowledge and wisdom on the subject of the hon. Member for Jarrow.
  On a somewhat grey May morning, when the House is about to adjourn for what I think is known as the spring recess, one's thoughts turn to summer. Hopefully, it will be a summer of sunny days, strawberries and cream at Wimbledon, cricket at Lords and elsewhere—indeed, the test series starts later this week—and holidays and pleasure for most people. Regrettably, residents in parts of my constituency look forward to summer with a somewhat different attitude and some misgivings. Inevitably, in parts of my constituency, as in parts of many others, the summer brings an invasion of one of the greatest scourges of modern time: the new age traveller or gipsy.
  There is nothing romantic about such people, despite the fact that they hide behind a fairly romantic title. The House will know that very few, if any, people would have any objection to those who choose a nomadic form of life that is honourable and respectable and goes back many generations—not only in this country but throughout the

  225
  world—on the basis that Romany families and the genuine traveller or gipsy, as he was then known, is part of our history.
  Regrettably, that romantic image has been shattered by several hundred and possibly thousands of people who decide basically to opt out of society and the responsibilities which the majority of the population abide by and accept, to follow a way of life that is an infernal nuisance, especially during the summer months, to those in and around the countryside and, unfortunately, also in our towns.
  The travellers are, on the whole, a dirty and aggressive set of people with strong criminal links. They present a health hazard when they arrive on a site and leave a rather worse health hazard when they go. They are scroungers in the worst sense of the word, in that they willingly take every state benefit available to them, and, indeed, to other citizens. They are probably the most uninvited of guests whom no one would wish to see in and around his area.
  A constituent, Mr. Armstrong, wrote to me last year when we had a particular problem in Luton. His words are worth recording and will, I am sure, strike a chord with hon. Members on both sides of the House. Mr. Armstrong writes:
  "We are all very disturbed by the recent High Court ruling regarding 'travellers'."
  I shall come to that matter later. Mr. Armstrong continues:
  "It is all very well claiming rights but in having rights there are also obligations. Also someone has to pay for rights and it would seem that 'travellers' avoid the liability of making any payment.
  They contribute nothing to the wellbeing of an area—quite the reverse. They cause disturbances, always leave a mess behind and usually cause a health hazard by using some part of their area as a lavatory. They regard the land as theirs by right and have been known to tell residents to 'get off our"'—
  there is now an expletive which I am not allowed to repeat—
  "'land.' After they have left, the local authority has to clear up the site at the council taxpayers' expense. If they want rights they should pay for them."
  These people are a trouble when they come and a trouble when they go. Only last year, in a very respectable part of my constituency—all parts of my constituency are very respectable, but this area may be a little more genteel than others—it fell to the local vicar to act. Here one can perhaps applaud some of the Church's actions, which it has been difficult to do over the past few years. He got together a band of helpers to clear up the mess that the travellers had left adjacent to people's homes.
  At 10 am on Saturday 22 July last year, the vicar and his friends circulated in the Bushmead area of my constituency a leaflet which urged people to
  "join us at the tractor and trailer on the common."
  The vicar offered free refreshment vouchers for the first 50 helpers and—this is the rub—the leaflet said:
  "Gloves will be provided … This may be a dirty and hazardous job. You may help clear up at your own risk."
  These people are enjoying the protection of the law and, possibly unwittingly, of local authorities. They are an enormous nuisance to our constituents. This is just the time of year when they begin to arrive. We have already had problems with them in the Luton area, and I am fearful that we shall suffer a further invasion during the summer months.
  Mr. David Nicholson: My hon. Friend assisted me with my speech by giving an example from my constituency. Perhaps I can assist him with his speech by giving another example from my constituency.
  Last week, the Liberal Democrat-controlled Somerset county council passed various provisions to assist new age travellers in Somerset. It was attacked by Conservative opposition councillors who said that it would make Somerset a honeypot for travellers because no other county council—most county councils in the area are Liberal Democrat, Labour or jointly controlled—has taken such measures. My hon. Friend may like to reflect on that point and relate it to begging and to the housing matters that I raised earlier.
  Mr. Carlisle: Indeed. My hon. Friend speaks with great knowledge. He represents an area that has suffered more than most from new age travellers. Around Stonehenge, there have been raves and all that goes with them, to which I shall refer later. My hon. Friend is right to point out to the House that there are local authorities, controlled by the Liberal Democrats or, in my case, by Labour, which seem to wish to give comfort and succour to these people, much to the distress of nearby residents.
  The travellers cost us an enormous amount. They know about the state benefits and they insist on taking them. In my hon. Friend's area, they travel in such numbers that they take with them experts on social security who know exactly which benefits are available. Indeed, things have come to the point that officials from the local benefits office often visit sites, ensuring that travellers claim the rights to which they believe they are entitled. My right hon. Friend the Leader of the House had long experience in the Department of Social Security. He will know only too well the problem I am talking about.
  New age travellers also cost local authorities and individuals an enormous amount in terms of legal fees, which run to several hundreds of thousands of pounds, if not more, throughout the country. They cost the council time and resources in removing them and removing the mess. They cost the local taxpayer an enormous amount in terms of police costs because in most cases, the police are involved when the travellers arrive. There is also the enormous cost of clearing up the damage and mess they leave once they have gone.
  Some might say that these travellers are almost above the law. I must tell my right hon. Friend that I am somewhat disturbed by the fact that, although we passed the massive Criminal Justice and Public Order Act 1994, part of which had the specific purpose of dealing with this problem, the guidance from the Department of the Environment does not reflect that fact. I have discussed this personally with the Ministers involved. The Department's attitude has been tolerant rather than, as it should be, somewhat vindictive.
  In recent correspondence, my hon. Friend the Minister for Construction, Planning and Energy Efficiency talks about genuine travellers and how local authorities must be reasonable with them, especially in terms of not harrying them too much to leave if their vehicles have broken down and allowing them time to mend them. Every right-thinking citizen fully understands that that is just one of the many and varied methods these people use to prevent others from moving them. I must confess that I am somewhat disturbed to hear the Government almost giving these people help and succour.

  227
  The travellers also seem to be protected by the courts. Recent High Court decisions, which are referred to in the letter from my constituents, the Armstrongs, which I quoted earlier, gave the travellers greater protection and prevented local authorities, in some cases, from ridding their areas of this nuisance. In a recent case, Lincolnshire county council's decision to try to remove travellers was overturned in the High Court. The travellers also enjoy protection under the Children Act 1989, under education legislation and under housing legislation, which my hon. Friend the Member for Taunton (Mr. Nicholson) mentioned.
  One begins to realise that for some travellers, it is not a bad life. People opt out into a caravan or vehicle of some sort and park on somebody else's land in the full knowledge that they will be able to stay there almost as long as they choose. Their children will have every protection under the law in terms of education and health care. If members of the tribe—I think that that is probably the best description of them—are expecting a child, heaps of help is given and no one can touch them.
  In certain areas, according to reports, police forces are very reluctant to act, both because of the costs involved and because they know that, whenever these people arrive, there will be trouble. In many cases, that involves physical violence against officers of the council who try to move the travellers on and against individuals who remonstrate with them about their behaviour, often in their own gardens and on their own land. The police have been somewhat reluctant to go forward—possibly, again, because Home Office guidance has not been as strong as it might be.
  All that has happened since the passage of the Criminal Justice and Public Order Act 1994 is that local authorities are now hiding behind the statement that—since the Caravan Sites Act 1968 was repealed, whereby authorities were bound to provide sites for gipsies if they were a problem in their area—there is very little they can do about the problem, because they cannot move them on to sites.
  The trouble in my constituency came to a head last year, to such an extent that a petition of 1,200 names was presented to the council to try to ensure that some action was taken against the gipsies. Bollards were erected in one area to prevent them from going on to private land, but they had to be removed because of a right-of-way problem during a local by-election. Obviously, a way was then open for them to go in.
  The estimate of cost to the Luton council taxpayer last year was £60,000. I think that that was an underestimate of what we had to pay to move the gipsies on, and in getting rid of them altogether.
  The cost of such actions to private landowners is considerable. It costs up to, and probably exceeds, £2,000 in legal fees to go through the proper process to get people off land on which they have absolutely no right to stay. Not the least cost is the misery and fear that those people cause to nearby residents, who are unfortunate enough to live in areas that have wide and open fields beside them, which would normally be an asset to their property. They now live in fear that travellers will appear, usually during the summer months, to make life a misery for them.
  The travellers are almost above the law. Some two or three years ago, I was faced with a similar problem in another part of my constituency. I objected to them being
  228
  there, and, on behalf of my constituents in the village of Harlington, said that I did not think that they were in a suitable place for a site. As my hon. Friends may know, my language then was perhaps somewhat extravagant, because I was cross and angry on my constituents' behalf.
  I received a letter from the Commission for Racial Equality stating that I was stirring up trouble, and asked whether I would appear at a magistrates court about a week or so later to answer those charges. That was in relation to a Member of Parliament performing his duty on behalf of his constituents, who perhaps unwittingly expressed his opinion outside the confines of this place.
  Fortunately, the Commission for Racial Equality dropped the charges, which were then taken up by the Crown Prosecution Service on the basis that I should be prosecuted because of those—I thought somewhat mild— remarks suggesting that the gipsies should be driven out of my constituency, into a land I do not know where. Luckily, after various police investigations—costing an enormous amount of money to them and legal fees to me—the case was dropped. Again, perhaps that gives the House an idea why some might feel that those people are above the law.
  That is where the problem lies. As I said earlier, we quite rightly passed a massive Act in the Criminal Justice and Public Order Act 1994, which, among many other excellent measures, was designed to try to prevent the problem of raves, hunt saboteurs and gipsies. We have had problems in my area with raves. I think that the Act, on the whole, has worked quite well, and there has been some control over those.
  On hunt saboteurs—I talk as an unashamed supporter of field sports and as a member of the British Field Sports Society—there is no doubt that the Act has been a considerable bonus to those of us who enjoy country sports. The hunt saboteurs' activities have been considerably reduced because of the Act. On gipsies, however, I must tell my right hon. Friend the Leader of the House that the action in overturning the 1968 Act and giving local authorities new powers has been a complete disappointment.
  The 1994 Act has brought its own problems, such as problems of identification: one must now identify people to get them moved on. Apart from saying that their name is Smith—which in Luton is, of course, almost an unusual name, with so many friends now of ethnic origin—as most of them do, identification is extremely difficult.
  There are also difficulties with changing numbers of people, now that magistrates' warnings must be laid at the foot of individuals rather than at the foot of groups of people. Once one individual receives a court order, and possibly moves on—but, in many cases, stays and waits his full time—others move on to the same site. There are obviously difficulties there.
  There are difficulties also with police action. The police have been told to use their powers in a discretionary manner. Local authorities are inevitably asking the police to back them up, because those people are often vicious and violent, and the public need to be protected from them. There are dangers to council staff who are asked to go on to those sites to ask people to move. They ask them to move in as civil a manner as they can, while receiving abuse, and sometimes physical intimidation.
  There are also difficulties with the Act in that it allows fines of up to £1,000, which of course are totally laughed at by those on whom they are levied. I tell my right hon.

  229
  Friend the Leader of the House that, in his consultations with my right hon. and learned Friend the Home Secretary, he must point out to him following this debate that, under section 77 of the 1994 Act, there are many and various difficulties. Local councils across the country are now saying that this law is defective in terms of their needs. A recent survey of the Association of District Councils showed that 89 per cent. of councils thought that the law was inadequate, ineffective and "poor" in addressing their problems.
  There are now, of course, difficulties in that designated areas have ceased. In Luton we have one designated area left over from the old legislation, which is still not full but is available for gipsies to be moved on to. The difficulty now is that local authorities are almost saying, "Perhaps we should have more designated areas because of our problems and the ineffectiveness of the law." That, again, is causing problems.
  Again reflecting the comments of my hon. Friend the Member for Taunton, that response is a cop-out, which Labour-controlled councils are beginning to go for. They are saying, "We have this problem; therefore, we will designate another area and have another site in the town." The difficulty then is: where does that site go? Inevitably it must go into an open space; and, wherever it goes, there will be a problem. Labour-controlled authorities are not standing up to the problem, and are not being strong enough; but, obviously, I have some sympathy with the difficulties that they face.
  My own council is now boasting that it will shortly be proposing a new site, and other local authorities are watching it to see what it will do. If the Labour-controlled council in Luton puts another site into the Luton area, there will be massive resistance—quite rightly so—from the constituents. Again as my hon. Friend the Member for Taunton said, Luton could become a honeypot for those who feel that they have nowhere else to go, because that is the life they have chosen. It will attract more travellers into the town rather than to dissuade them. I think that the Labour-controlled authority is totally wrong on this issue, and massive opposition is building up in the constituency against it.
  Today, my message to the House and to my right hon. Friend the Leader of the House—and, in turn, to my right hon. Friend the Secretary of State for the Environment— is that this law has not proved effective. The Department has promised that it will examine the law and monitor its effectiveness. It is a fact that it is not working. Some of the guidance and advice that the Department has given is flawed, and it has not taken the strong attitude that I believe the majority of Conservative Members want— bearing in mind that most of the Criminal Justice and Public Order Act 1994 was vehemently opposed by Opposition Members, a fact which must never be forgotten when they boast about how effective they are on law and order.
  There is no doubt at all that this law is worth re-examining. The attitude of the police needs to be re-examined, on the basis that they seem to be almost reluctant to act in these cases. They must go in not with velvet but with iron gloves to sort out the problem. I think that council action has to be re-examined, particularly in cases in which Labour-controlled councils, such as that in Luton, are hiding behind the law, putting in extra sites and making it attractive for those people to carry on their way of life.
  230
  I fear that the problem may get worse as the summer wears on, and we must remember that the victims of this sorry tale are the people—our constituents. I told my constituents at a public meeting the other day that, in addition to the power of the ballot box—they elect their Member of Parliament—they have the power to lobby that Member of Parliament and their local councillors to try to rid their area and, we hope, the country of these unwanted people. We must look carefully at the laws we have passed, and strengthen them with some force.
  11.9 am
  Mr. John Spellar: I shall try to observe what I understood to be the custom in these debates and make a fairly brief speech on one or two urgent matters that require the attention of the House. There is little Government legislation to debate but there is certainly much unfinished business to be considered.
  The first matter that I wish to raise will, I believe, be dear to your heart, Mr. Deputy Speaker, because it relates to an incident in Yorkshire as reported in today's press. It involves Mr. and Mrs. Milnes, whose car was wheelclamped and removed. They were told that it would cost £450 to have it returned and an extra £20 for each day that payment was delayed. The total now seems to have risen to £1,000. Such licensed robbery and banditry has been allowed to continue for far too long. My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) has been investigating incidents in the Digbeth area of Birmingham, where cars are left on empty sites to entice unwary parkers whose cars are subsequently clamped—sometimes even with their owners in them.
  Let me make it clear that I am not talking about clamping by the official authorities in London of cars parked on the street but about off-street clamping carried out by private operators, many of whom are extremely dubious. The penalty being imposed by such operators— £95 to have the car released and £450 to have it returned after it had been towed away—is way in excess of those imposed under the law for illegal parking on the street. Furthermore, clampers are acting as judge, jury and enforcer. In many ways, the word "enforcer" is apposite.
  The Government's delay in acting has been scandalous. It is more than three years since the Home Office finished its consultation on clamping on private land. The Minister of State, Home Office has continued to dither and delay and will not propose a solution, despite the fact that, since a ruling by the Scottish High Court four years ago, private wheelclamping has been illegal in Scotland. That has not led to a breakdown of parking controls. The Home Office should introduce legislation urgently so that companies such as LORE clampers based in Leeds are no longer able to intimidate decent ordinary citizens.
  Another matter that has come into focus this week and requires urgent legislation is the funding of political parties—in particular allegations made at the weekend of donations by Serb business men to the Conservative party. In the previous four Sessions, I have introduced a private Member's Bill to try to regulate the funding of political parties. My most recent attempt was on 19 April and it is a fairly modest proposal. It would ban foreign donations to political parties and provide for a register of donations of more than £1,000. Had the Bill been law, The Sunday Times would not have had to make inquiries about

  231
  donations; it would have been able to read the register and ascertain who had been contributing to the Conservative party.
  The Government's reluctance to introduce legislation or, as suggested by my right hon. Friend the Member for Sedgefield (Mr. Blair) yesterday, to refer the matter to the Nolan committee must lead us and right-thinking people outside to believe that, if those who have nothing to hide have nothing to fear, the Conservative party must accordingly have a good deal to hide and a good deal to fear. I have written to the Leader of the House, asking for parliamentary time to be made available to debate my modest proposal, which would be regarded as quite unremarkable in most other western democracies.
  I refer now to the continuing saga of the millennium exhibition. I do not want to get involved in the basic question whether there should be a major millennium exhibition, but, as the decision has been made, let us consider the choice of location. The final choice was narrowed down to two possible locations—Greenwich in London and Birmingham.
  Birmingham has the experience of operating a large site—the national exhibition centre—and handling huge numbers of people. It had a site available and ready for construction. It also has the personal infrastructure in the form of NEC staff, and equally important—possibly even more important—the transport infrastructure. Birmingham is situated at the junction of Britain's motorway network and has an international railway station and a major and expanding airport. Birmingham also had the group, Imagination, draw up plans for the exhibition. The plans were so good that, when the Government decided to take the scheme to London, they asked Imagination to take over the running and planning of it.
  All those factors should have weighed in favour of Birmingham yet it was decided that the London bid should have priority, even though it was unclear where the London funding was to come from. The Birmingham scheme was properly funded but there was great uncertainty about the London scheme—a fact bome out by events as company after company has bailed out of funding the scheme. Indeed, extension after extension has had to be given to London while it tries to get its act together.
  The only conclusion that reasonable people can come to—especially people in the midlands—is that the decision was made by the cultural establishment, based on its unremitting metropolitan bias and its refusal to consider sound, sensible and workable schemes outside London because it does not want to travel to Birmingham or elsewhere.
  I suspect that the decision was also related to the long-term ambitions of the Deputy Prime Minister to expand London along the estuary. We witnessed another example of that bias in yesterday's report by the Select Committee on Transport, which examined the possibility of an estuary airport for London instead of considering the expansion of regional airports.
  The millennium scheme is now in crisis. The months are ticking by but not one sod of earth has been turned. Indeed, construction cannot start until the Greenwich site has been decontaminated. The time scale crisis is partly the result of the Government's lack of forward planning
  232
  and their not making decisions sufficiently early so that there was time to get the construction under way. Incidentally, the same appears to be happening with the commemoration of the bicentenary of Trafalgar day— preparations will be put off until the event is upon us.
  The problem is that Greenwich was the wrong choice and we have daily proof of that. The Millennium Commission should recognise that it has made a mistake. It should not, as reported in the press, be talking petulantly about scrapping the scheme. Instead, it should be talking about giving the project to the one area that will bring it in on time and make it a success—Birmingham.
  Finally in this connection, there is some uncertainty about what will be done with the millennium exhibition buildings on the Greenwich site. In Birmingham, such buildings would become part of an integrated NEC. It would do much for Britain and for areas outside London if the correct choice was made.
  The midlands is also home to a considerable section of the Sikh community, which has made an enormous contribution to the industry and commerce of this country. That community will shortly be remembering the appalling attack by Indian security forces on the Golden temple in Amritsar. It will be an opportunity for them to express their deep concern at the continuing abuse of human rights in the Punjab. Such abuse consists of disappearances, torture and the arbitrary arrest of citizens and the removal of their civil rights. The Foreign and Commonwealth Office should raise this issue with our Commonwealth partners in the Government of India, and must state our belief that human rights should be restored as soon as possible.
  11.19 am
  Mr. John Marshall: I listened with interest to the speech of the hon. Member for Warley, West (Mr. Spellar), who suggested that the millennium celebrations should take place in Birmingham. As a Member representing a London constituency, he will not be surprised to learn that I do not agree with him. London is a mecca for tourism, and if the celebrations are designed partly to attract people from other parts of the United Kingdom and from overseas, London is a far more logical choice than Birmingham. In 1951, the then Government decided to hold the Festival of Britain on the south bank rather than in the midlands.
  Mr. Tony Banks: Hear, hear.
  Mr. Marshall: On this occasion, the hon. Gentleman and I form a holy alliance. We represent the city of London, our tourist capital. If the celebrations are held in London, they will be of great benefit to the whole country. I suspect that if they were to be held in Birmingham, they would receive much less support from the people of this country and from overseas.
  Earlier this week, the Organisation for Economic Co-operation and Development had to revise its economic forecasts for this year and next year. It pointed out to the people of Europe that the provisions of the Maastricht treaty were squeezing growth out of the economies of continental Europe, particularly those of France and Germany, which are obsessed with creating a single currency by 1999.

  233
  Britain is in the fortunate position of having the strongest economy in western Europe. We can look forward to good growth this year and next year, and the Bank of England has confirmed that the Government's inflation targets are being achieved. We have much lower unemployment than other European countries, and we have received significant inward investment. That is not due to some accident of history.
  We can all recall the magic words of Jacques Delors during the Maastricht discussions, who forecast that the fact that Britain was exempt from the social chapter would act as a magnet for inward investment. I do not often quote the former President of the European Commission with approval—nor does my hon. Friend the Member for Stroud (Mr. Knapman), the Whip on the Front Bench— but on this occasion he was 100 per cent. right. If we were to reverse the policies that attracted companies to the United Kingdom, we could say goodbye to inward investment, low unemployment and the rapid economic growth that is enabling the Government to improve our social services.
  Earlier this week, a number of hon. Members were able to meet the parents of an Israeli, Zachary Baumel, who went missing in Lebanon in 1982. His parents have no idea what has happened to him, although there are suggestions that he is still alive. Surely any parent has a right to know after 14 years what has happened to his or her son. Some of us have met the mother, brothers, wife and daughter of another missing Israeli, Ron Arad, who was captured nearly 10 years ago. He will shortly have spent a longer time in captivity than the duration of the first and second world wars. It is surely wrong that any prisoner of war should have to spend 10 years in captivity without being allowed to send or receive letters for most of that time.
  When Mr. Arad was captured, his daughter was a year old. What sort of people prevent a young girl from seeing her father between the ages of one and 11? What sort of captors prevent a prisoner of war from receiving letters? What sort of people prevent a man from being with his wife for 10 years? What sort of people prevent an elderly mother from seeing her eldest son? That is what is happening in the middle east to the Arad family and to the parents of Zachary Baumel.
  It is ironic that Israel kick-started the release of western hostages in the middle east by allowing many Palestinian prisoners to leave prisons in Israel and go to other countries, but Israel has received no reward for that humanitarian act. The parents of the Israelis who are missing in action do not know what has happened to their sons, who may still be alive. Some believe that Zachary Baumel is alive, and there is evidence that Ron Arad is still alive.
  When Mr. Arafat visits Britain shortly—no doubt to ask for money—the Government should ask him to provide information to the parents of the missing Israelis. The failure to do so is an international scandal and a fundamental denial of human rights.
  The most pressing problems facing the United Kingdom are the low education standards, achievements and—in some places—expectations in our inner cities. In London, many children aged 11 have a reading age of nine. Education is the escalator of opportunity that allows children from deprived inner cities to live, work and use their talents to the fullest elsewhere. If the education
  234
  services in inner London fail to give children the basic building blocks of a decent education—the ability to read, spell and add up—we will fail a whole generation. The late and unlamented Inner London education authority failed to provide those building blocks. The results for inner London that have been published, thank goodness, by the Government show that it is a national scandal. I hope that the Government will continue their policies of ensuring that the basics of education are taught.
  If we do not teach the basics of education in our primary schools, it will make it almost impossible for the head teachers of secondary schools to enable children to develop their talents fully. Everyone supports the Government's policies to make secondary education more diverse, and everyone welcomes the announcements made yesterday by the Secretary of State for Education and Employment, but it is essential that we examine the basics of education in our primary schools to ensure that children are not deprived of their basic right—the ability to read, write and add up.
  An issue raised at Question Time on Monday, which will no doubt be raised from time to time, is the problem of the legal aid fund. Under this Government, expenditure on legal aid—[Interruption.] I see that my hon. and learned Friend the Member for Burton (Sir I. Lawrence) is about to leave. Expenditure on legal aid has risen from £100 million to about £1.5 billion. Many of us are concerned that the legal aid fund is providing funding for cases that should not be funded by the taxpayer.
  For example, in what is known as the Sony case a German resident sued Sony in the British courts over a patent dispute. The German had no intention of living in this country or paying a deutschmark in British tax, but he received £500,000 in legal aid from the British taxpayer. Some hon. Members will have seen in the Daily Mail on Saturday that an old Etonian received £200,000 in legal aid while suing Clifford Chance, a well-known firm of solicitors.
  Many of us are concerned about the fact that worthless cases are being financed by the taxpayer. Many of us are concerned about the fact that overseas residents can obtain money to fight cases in British courts when they will never pay any British tax. Many of us are concerned about the fact that the legally aided party in a civil case has an advantage over the other party. It is, after all, extremely rare, when a legally aided litigant loses a case, for the legal aid fund to pay the costs of the successful party. That is unfair: one party knows that the case can continue and he will not have to pay anything towards his costs, while the other knows that if he loses he will pay the other party's costs, and if he wins he will have to pay his own.
  I believe that, when the legal aid fund backs a case and that case is unsuccessful, it should then pay the costs of the successful party. At present, we are placing an unfair burden on those who are fighting legally aided litigants.
  Sir Ivan Lawrence: I agree with all that. May I go now?
  Mr. Marshall: I wonder what the fee will be for my hon. and learned Friend's opinion.
  Mr. James Couchman: Substantial.
  Mr. Marshall: I fear that my hon. Friend may be right.

  235
  It is traditional for one or two local issues to be raised in debates such as this. Let me mention some that are of concern to my constituents. One is the London fire and civil defence authority's recommendation that fire cover in the capital should be reduced, although its finance director has told it that its reserves of £27 million are too high. Surely it is wrong for the authority—dominated as it is by the Labour and Liberal parties—to recommend a reduction in fire cover in London, and in my constituency in particular, when it has been told that its reserves are too high. Those reserves should not be stashed away, no doubt in an attempt to produce a lower council tax rate in election year in London; they should be used now, to provide fire cover for my constituents and those of other London Members.
  Let me raise two more local issues. One concerns the future of an institution called College farm—an oasis in north London that is deeply loved by my constituents and those of other Barnet Members. It is visited by many thousands of children and others each month, but the Department of Transport has decided that it is surplus to requirements. I hope that, when he decides its fate, my hon. Friend the Minister for Transport in London will heed the representations of thousands of my constituents and thousands of other people in Barnet, and the campaign run by the Hendon and Finchley Times, and allow the farm to remain a farm rather than being sold for commercial or residential development.
  Finally, let me briefly raise an issue that concerns many residents of the London borough of Barnet. It will not surprise my right hon. Friend the Leader of the House to learn that I refer to developments at Edgware hospital. I pay tribute to my hon. Friend the Member for Hendon, North (Sir J. Gorst) for the way in which he has led the parliamentary campaign. He has tabled a parliamentary question on the issue, which is to be answered on 6 June.
  Barnet health authority has suggested that the minor accident and treatment unit that it wants on the site should operate for only 12 hours a day. I feel that that proposal should be re-examined. It is unacceptable to the people of Barnet, to those whom I represent and to people elsewhere that there should not continue to be a medical presence at the hospital to deal with all the cases that currently go to the accident and emergency department. Hon. Members such as my hon. Friends the Members for Finchley (Mr. Booth) and for Harrow, East (Mr. Dykes), and my right hon. Friend the Member for Brent, North (Sir R. Boyson) will want to return to that issue when the House reconvenes in June, and I hope that my right hon. Friend the Secretary of State for Health will be able to give the people of Barnet good news rather than bad.
  11.34 am
  Mr. Tony Banks: I was waiting for the hon. Member for Hendon, South (Mr. Marshall) to get round to the Schleswig-Holstein question. Next time he wishes to raise 10 issues, perhaps he will bring out a little book and we can all buy it when it is duly remaindered.
  At the beginning of his speech, the hon. Gentleman referred to the choice of London as the millennium site. As he rightly supposed, I agree with him about that, but the way in which the choice was made does not befit the
  236
  millennium and the way in which we should celebrate it. The Greenwich site still looks like a bomb site; no wonder hon. Members representing constituencies outside London are complaining so bitterly. I might point out to the hon. Gentleman that, if we had had a strategic authority in London, all the dithering over the development of the site would not have happened—but we shall return to that anon.
  I wish to raise two issues. The first relates to the vexed problem of Norway's resumption of commercial whaling yesterday. Early-day motion 889, which appears on today's Order Paper and has so far been signed by 143 hon. Members from all parties, refers to Norway's decision to slaughter some 425 minke whales, as well as an unspecified number for what it refers to as scientific whaling purposes. That decision was made in defiance of the International Whaling Commission. Norway declared a unilateral resumption of commercial minke whaling in 1993, but the IWC rates the minke whale as a protected species. Minke whales are migratory creatures, and they belong to us all; they certainly do not belong to Norway.
  I will not tax the House by describing the method of destruction, but a penthrite grenade is fired into the body of the whale and then explodes, releasing a huge volume of gas and inflicting enormous pain and suffering. When the whales do not die swiftly—within, say, 10 seconds— Norwegian whalers finish them off with large hunting rifles. That is barbarous, and it is scandalous that it should done by a neighbouring country with which we have close relations. When I raised the matter during business questions, the Leader of the House said that he would protest, or at least pass on the comments that were made—not just my comments, but those of all 143 Members of Parliament—to the Norwegian authorities. I hope that he will tell us exactly what he has done.
  Mr. Peter Hardy: My hon. Friend has pursued this matter diligently, both here and in Strasbourg, where Mrs. Brundtland, the Norwegian Prime Minister, boasted that half the whales had died instantly. We pointed out that the other half had not.
  Mr. Banks: That, too, was an all-party attack on Gro Harlem Brundtland, which resulted in her complaining to the then leader of the Labour party that she had been attacked by a fellow socialist. I feel ashamed to describe Gro Harlem Brundtland as a socialist—particularly one who goes around the world boasting of her green credentials, and saying that Norway is at the cutting edge of environmental and ecological concern. That is rank hypocrisy, and I cannot wait to tell Mrs. Brundtland so again next time our paths cross.
  My hon. Friend the Member for Wentworth (Mr. Hardy), very appropriately, raised the question of how long it takes whales to die. Whales are sentient beings—sensitive creatures with a social grouping system. They have feelings, many of which we do not fully understand. We should be studying these marvellous creatures, not slaughtering them for whale meat and blubber, much of which ends up on plates in Tokyo. It is unnecessary, and it is done mercilessly.
  Let me inform my hon. Friend that, in Norway's 1995 catch, according to Norwegian records 62 per cent. of whales were killed instantly, 11 per cent. were still alive after 10 minutes and 4 per cent. were still alive after

  237
  15 minutes. The average time for death was three minutes 24 seconds and the longest recorded time was nothing less that 43 minutes and 20 seconds. Unfortunately, in many cases, the whales were pregnant, so the infant was killed as well as the cow. It is monstrous that that is being done by a European nation—or by any nation. The strongest possible protest must go out.
  What is the result? According to the Norwegian figures, the 1995 catch resulted in the landing of 327.5 tonnes of meat worth 10 million Norwegian krona, which is about £1 million. All that suffering for £1 million—it seems monstrous.
  I raise that matter because the plenary session of the IWC takes place in Aberdeen on 24 June. I hope that as many people as possible will be there to protest against the Norwegians' conduct and defiance of the IWC. They must be in no doubt about the intense anger throughout this country—not just in Parliament—about the way in which the Norwegians are flouting the international whaling convention.
  The second issue relates to dogs. Yesterday, the Prime Minister cried havoc and unleashed the dogs of war. I found many aspects of that surreal. The one thing about declaring war and delivering an ultimatum is that one must ensure that one has an escape route, and I do not think that the Prime Minister has. I do not intend to go into the matter too deeply, but it seems entirely appropriate to me that we should go to war over semen; it is an appropriate thing for a Government of onanists to go to war over.
  I want to concentrate on the Dangerous Dogs Act 1991, which was a rotten piece of legislation. It was passed in haste. I remember standing in this very spot to warn the then Home Secretary, the right hon. Member for Mole Valley (Mr. Baker), who has now moved on to other things. The warnings were ignored. Everything was done in a rush. There was a public reaction, we legislated in haste and we are now repenting at some leisure.
  The operation of the 1991 Act defies common sense and denies normal and compassionate treatment for animals and human beings alike. We all know why it came about—because of the attacks by pit bull terriers. Section 1 of the Act defines a pit bull terrier, but it is a confused definition. At times, one does not know what such a terrier is, as so many crosses are involved. Under section 10(3), dangerous dog activity might merely be threat or intimidation. No actual damage may be inflicted on a human being, but the Act can be brought into operation if someone feels intimidated by a dog. The Act is confused and imprecise.
  Court cases are costing an average of £10,000 and an enormous amount of police time is involved. None of that makes sense. The courts have no discretion on sentencing, other than to order the destruction of the dog. We should not be proud of that. The Act has taken any discretion on the part of magistrates away, which does not seem fair in law and certainly is not fair to the dogs and their owners. It has resulted in appalling cases of suffering and heartache for dogs and owners. I know of thousands of examples of the way in which the Act has operated, but I shall give only two.
  The first example relates to Mr. Bates and his dog Otis. In 1992, the police stopped him on the motorway—there was a dog in his car. The court decided that Mr. Bates' car was a public place. He appealed, but the High Court
  238
  also decided that it was a public place and that Mr. Bates should have had a muzzle and a lead on the dog while he was driving. That shows the level of absurdity that we have reached under the Act. He appealed and went to the European Court, but was turned down and Otis was destroyed on the same day as the IRA exploded a bomb in docklands. That was an absurd case, and the legislation is absurd.
  The second case is still before the Home Secretary and concerns Jessie—an inoffensive, toothless dog, thought to be suffering from motor neurone disease. When Jessie was found by Southwark Crown court to be a type of pit bull terrier and condemned to die in June 1995, she had never put a paw wrong. When she was brought before the court, the judges removed their wigs in case they frightened her. In court, she limped pathetically and dragged her left leg because she is lame. Indeed, there were tears in the court room. That was the last time that her owner saw Jessie and it was a painful scene for anyone to behold.
  Jessie had accidentally been lost in Hyde park when her owner, Mr. O'Brien, had had an argument with his girlfriend and they had gone their separate ways. The dog is suffering from paralysis of the lower limbs and clearly needs to live out what is left of its life in some sort of comfort, but is still on dog death row. People have been writing to the Home Secretary about the case. Even though a destruction order has been made under the Dangerous Dogs Act, it does not state when it has to be implemented, so Jessie could be allowed to live out what few days she has left. The Home Secretary can make a judgment and could even exercise clemency if he so wished.
  I hope that when the Leader of the House sums up, he will tell us what he can do about that case, as I think that today is the last day for any form of appeal or stay of execution to be allowed for Jessie. It is a pathetic case and it demonstrates that if we legislate so rapidly, we are likely to make big mistakes. I am sure that the Leader of the House will find that there is agreement for amendments to the Act on both sides of the House and that those could be passed very quickly indeed. There is good will on both sides of the House on the matter, and I hope that he will give us an opportunity to demonstrate that good will, because he will be thanked not just by hon. Members, but by dog owners and dog lovers throughout the country.
  11.46 am
  Mr. Jacques Arnold: A number of hon. Members have referred to the millennium location at Greenwich. I want to add my support. I am not a London Member of Parliament, but my constituents look forward to that improvement of the Greenwich site, which has good access to the entire country, as it is close to the Blackwall tunnel and the motorways connecting to it to the north and south. The site is of particular interest to my constituents as it is right alongside the River Thames, so there will be river access for tourists and those visiting from central London. More important to me, there will also be direct river access from the port of Gravesend in my constituency.
  The House should not rise for the Whitsun recess without considering the over-government of the people of Kent and of so many other counties. This weekend, we read of the Labour party's national policy forum in Manchester, which decided to impose regional

  239
  government on England without even the benefit of a referendum. For my constituents in Kent, that would mean yet another tier of government—this one located at the far end of Surrey, in Guildford. For Kent people, that would mean more politicians, more bureaucracy and more tax.
  In many ways, this country is already one of the most over-governed in the world. We have the European level, the fount of power here at Westminster with its adjunct in Whitehall, the county councils—in our case, county hall, Maidstone—the borough councils—in our case, the borough of Gravesham—and the rural parish councils. The Labour party is proposing to add a regional government, based in Guildford.
  Ms Janet Anderson rose—
  Mr. Arnold: I will not give way as I want to press on with this argument.
  A quick calculation shows that that means that Labour proposes six levels of government. The result will be paralysis, complexity and a field day for lawyers. I shall briefly consider each level.
  The beef ban has shown the European level at its worst. The morass of bureaucracy and committees in Europe has impaled it well and truly on a meathook from which it cannot escape. Despite the best scientific advice to the European Commission, which has assimilated it and put proposals to the standing veterinary committee, the committee cannot get off the hook. It has imposed all sorts of disastrous restrictions.
  What sort of voice do we have in Europe? This is the most serious crisis to affect the people of Kent for many years. Kent has many beef farmers and other people who are involved in trades linked to the beef industry. We have not heard a squeak from the two Labour Members of the European Parliament who are supposed to represent Kent in Strasbourg. They have said nothing either in Strasbourg or in Kent. They are too busy enjoying the gravy train that Strasbourg seems to have become.
  We heard earlier from my hon. Friend the Member for Taunton (Mr. Nicholson) of the consequences for the British people of European policies. My hon. and learned Friend the Member for Burton (Sir I. Lawrence) gave chapter and verse on how the so-called European Court of Justice is steadily extending the powers of European institutions way beyond what was envisaged in the treaties that were signed and approved by the House. The European level is costly, bureaucratic and a drag on my constituents.
  At county council level, my constituents resent the remote county hall in Maidstone. This year, the Liberal Democrat and Labour coalition that runs it has imposed a 5.6 per cent. increase in council tax—way above inflation. What have we got for that increase? There has been no such increase in the resources available for schools and the council conducts trench warfare against Kent's numerous grant-maintained schools. Rural roads are inadequately repaired; potholes and ruts such as we have not seen for many a year are appearing because the Lib-Lab pact does not give that a high enough priority. There is also the shambles in the road programme, but I have not the time to consider that now.
  240
  Gravesham borough council, no doubt under instructions from its Labour party headquarters, had to raise its council tax despite the fact that it did not need any more money. My constituents may be interested to learn that its reserves contain £1,000 for each of the 37,000 households in the borough. Yet it had the gall to ask my constituents for an increase in their council tax. Finally, there are the parish councils, which I strongly support because they are in many ways closest to the people, the most directly responsible and the least expensive.
  Despite all those levels and the paralysis, the Labour party wants to impose regional councils on England. How would that affect my constituents? A regional council would be run from Guildford, miles away on the other side of London. We already resent that so many local government services are run from county hall in Maidstone. The idea of Guildford is a joke.
  What will regional councils do? We have not been told, because the Labour party does not tell us the details of its policies. It has not got round to deciding what services such councils will provide. Will they take powers from borough or county councils? Will they run the schools or colleges from Guildford? We have an excellent college— the North West Kent college of technology, which is doing well under local autonomy. Would they suddenly decide to run that from Guildford? Would they manage the roads from there?
  Will regional councils take control of the local NHS? I congratulate the Government on dismantling tiers of government in the NHS. In the past few years alone, we have got rid of the vast top-hamper of the regional health authority at Bexhill, with its masses of bureaucrats who used up money. We have got rid of the district health authority with its bureaucracy at the Darenth park site. Has anyone noticed that we have lost those tiers of the NHS and therefore been able to redeploy the money to care for the health of our constituents? No one noticed them go any more than people noticed when the Greater London council went. People no longer have to watch the antics of the hon. Member for Newham, North-West (Mr. Banks), but no services for the people of London disappeared.
  We know that the Labour party favours reversing the NHS reforms, even though we have local management through the NHS trusts and power is in the hands of the GPs, who serve the public either through fundholding practices, which have been a great success, or by purchasing through the health authorities, in my case from West Kent health authority, which respond to GPs' needs. I do not think that a new NHS tier at Guildford would do anything for my constituents except absorb vast sums of money that would otherwise go into their health care.
  We have not heard from the Labour party what regional government would do, but we can be sure that it would have a full set of councillors who would exercise Parkinson's law and create more bureaucracy and interference. What would it cost? Of course, the Labour party will not tell us. It would be immensely expensive, but it will not say how it will pay for it. Will it be by an additional levy on the council tax or a purchase tax on local people? How will it raise the money? It will not say, but we know that regional government imposed by the Labour party will mean more tax or the diversion of funds away from education and the social and other services that we want.

  241
  I do not believe that the people of England want regional government—we already have too much government. Why then, does Labour propose it? It is because of its rash proposal for an assembly for Scotland, which would involve more politicians and a tartan tax. That proposal is important to the House because Scotland is consciously over-represented here. If there were an assembly in Scotland, there would be no justification for that over-representation. Indeed, there would be a strong argument for under-representation. The Labour party will not face up to that fact because, to get a majority in the House, it would depend on Scottish Members. We have had no response to the West Lothian question raised by the hon. Member for Linlithgow (Mr. Dalyell). Labour is imposing regional government on England to offset the West Lothian question.
  Labour's plan is not new—it has been a long-term plot. In responding to that and the problem of having six tiers of government, the Labour party set the hon. Member for Holborn and St. Pancras (Mr. Dobson) to work to knock out as many county councils as he could. On two separate occasions, speaking for the Labour party at the Dispatch Box, he proposed the abolition of Kent county council. The trouble is that he did not speak to his party about it. The Labour party group on Kent county council spent £1 million of council tax payers' money to fight the abolition proposal. Gravesham borough council's Labour party did a spectacular U-turn to oppose it. I suspect that it opposed abolition of the county council because it never expected to run either council; it runs them now, and two Labour leaders into one council does not go.
  The hon. Member for Holborn and St. Pancras tried to get rid of Kent county council and failed. He had to report to the party leadership that he had failed, but Labour will go ahead anyway; if it has to impose six tiers of government on the people of Kent and elsewhere in the country, it will be happy to do so. Labour originally said that it would do so with the proviso that a referendum be held before any regional council was set up in England.
  I understand that, over the weekend, Labour has backed away from the referendum proposal, and we do not need to look far to see why it did so, because regional councils in England are immensely unpopular. We understand, from reports in the press, that the deputy leader of the Labour party has said that Labour should go ahead anyway and impose regional government.
  My constituents would give a clear answer. They would say no to another layer of politicians, no to more bureaucracy and no to more tax to pay for all that. The general election will give them the opportunity to say no emphatically to Labour.
  12 noon
  Mr. Bruce Grocott: The hon. Member for Gravesham (Mr. Arnold) has the solution in his own hands. The gist of his speech was that Labour policies are unpopular and Tory policies are popular. The remedy is simple—that he meets the Prime Minister and suggests that he holds an early general election, so that we may discover what the public think.
  The hon. Gentleman, being a shrewd lawyer, has the sense not to do so. Presumably, one of the reasons why he made a lengthy speech was that he realises with nostalgia that he will not be with us much longer. That is one of the things that will no doubt motivate him in the few months remaining to him.
  242
  I want to speak about three aspects of public sector decision making in my constituency. Although I do not expect the present Government to be around for much longer, they can do a great deal of damage in the time that remains. One aspect concerns the railways, one concerns the Post Office and another concerns the health service.
  I would have spoken of this with anger some time ago, but this week no one who cares about institutions in Britain feels anything but sadness that the great national asset of our rail network has been sold by the Government. That asset was acquired by a Labour Government after the war, not for reasons of dogma, but because it was obviously in the national interest that a rail network should be planned nationally, and it was ludicrous to try to pretend that one could have competition in a rail network in the way that one can with ordinary consumer goods.
  Perhaps I should declare an interest. For at least three generations, my family has made a living working for the railways, and I remember how proud my father was when the railways were taken into public ownership in 1948.
  When I think of the money spent on privatisation— £287 million on reorganisation costs within British Rail alone, reducing the network to 100 different individual companies—I think of what might have been done if only a fraction of that money had been spent on services locally, regionally and nationally. Why, four years ago, did British Rail remove the InterCity network link between Telford and London? Why could it not have spent a fraction of the costs of privatisation on electrifying the line from Wolverhampton through to Shrewsbury?
  One would suppose that decision making in the rail network was fairly simple, but let me take an example of the lunacy of what has happened to the rail network. For some months, I have been trying to find out about the improvement of access for people with disabilities to Wellington railway station. I still have not discovered who is responsible for ensuring that disabled people have proper access to a specific railway station. Is it Railtrack? Is it the train operating company? Is it the franchising director? Is it the Government? Who is it? The answer is that we have returned almost to the bad old pre-grouping days—almost pre-1923, not even pre-1948—when everyone was in competition and no one was clearly responsible for crucial services such as access for disabled people.
  The Government have taken another bad decision related to the railways. Why do a Government who claim that they want to transfer freight from road to rail act contrary to that claim in the one area where they have power to take decisions—defence transport? The Ministry of Defence has been closing rail links to defence depots at an alarming rate of knots, including that to Donnington depot in my constituency. That Government Department is obviously taking decisions to transfer freight from rail to road, because it is closing the rail links, at a time when the Secretary of State for Transport is saying that it is crucial to move more freight on to the railways.
  I have found those aspects of rail decision making bewildering, and I have no confidence that the newly privatised rail network will make any development in those crucial areas.
  I now move on to my second point. Although I may be being unfair, because the decision has not yet been made, for some months it has been mooted that Post Office

  243
  Counters Ltd. wants to close Wellington post office. As one would expect, that has met massive opposition from Wellington town council, from Wrekin district council, from myself and from my colleague and friend Peter Bradley—the prospective Labour parliamentary candidate for the neighbouring new Wrekin constituency. Despite the opposition, all the signs are that Post Office Counters will go ahead and close the post office.
  What does that tell us about whether the postal service should exist in the public interest to serve the public good or be operated on the basis of private interest and private gain? I know which answer my constituents give to that question—they have given it loud and clear, but I fear that Post Office Counters will not be listening.
  Finally, I wish to mention the fact that, despite a massive public campaign to establish a consultant maternity unit at the Princess Royal hospital in my constituency, the Shropshire health authority has failed to acknowledge the strength of the case and the fact that the structure and distribution of the population of Shropshire have changed. The new town of Telford, which I am proud to represent, has been growing and expanding, and needs a development in key medical areas—and a consultant maternity unit is one of the most important I can think of. I have no confidence that the health authority is logically considering the needs of the whole county, and especially not those resulting from the growth of Telford.
  Those three public sector areas—the railways, the Post Office and the health service—are all crucial to the livelihood of the people we represent. I have drawn attention to four bad decisions taken by the Government in those areas—decisions that they will start to regret when they face the electorate at the next general election.
  12.7 pm
  Mr. Peter Hardy: Briefly, I endorse the points that my hon. Friend the Member for The Wrekin (Mr. Grocott) just made. I also mention the Dangerous Dogs Act 1991. My hon. Friend the Member for Newham, North-West (Mr. Banks) is right to seek the amendment of the Bill. It is unjust and flawed, and can be costly and brutal. Hon. Members on both sides of the House accept that the Bill should be amended. The only thing that prevents it from happening is the Government's unwillingness to confess that they made a serious blunder.
  I shall briefly mention two matters. The first concerns national health service pensions. Constituency experience has led me to believe that there is a continuing injustice. A person retiring from the national health service early on health grounds may expect to receive a pension, but that person must prove that there is no prospect of recovery. In pursuing a specific case, I learned from the National Health Service Pensions Agency that that was the requirement, but at least the agency then spelled out that the employer must not lead the employee to expect that the pension will follow.
  I will not mention names, because I have not consulted my constituent—nor is it appropriate yet. In my constituent's case, the trust that employed her said that it had not led her to believe that she would receive a pension, but she was able to give me a document showing the estimate of the pension that she would receive if she
  244
  accepted termination of employment, as she did. That is an injustice. I suspect that it has happened before, and it needs to be examined.
  I refer also to hedgerows, which I have long sought to protect. Hon. Members with an interest in this matter were persuaded not to pursue private Members' initiatives, because the Government took power to introduce regulations to protect hedgerows in 1994. However, it is now 1996, and patience is running out.
  We need progress in this area, if only to resolve the continuing and historical problem of hedgerows that are already lawfully protected under the 4,000 private Acts of Enclosure that were passed by Parliament before 1840 and which have never been repealed. We need to resolve this matter. I take it that, when a test case occurs—as is likely in Yorkshire shortly—the Government will consider its implications.
  12.10 pm
  Mr. Jeff Rooker: This morning there have been only 12 Back-Bench speeches, which is somewhat fewer than normal. A number of themes have emerged in the speeches of hon. Members, including beef and the siting of the millennium exhibition—four or five hon. Members referred to these issues.
  I was not present in the House yesterday during the statement on BSE, but I read Hansard this morning. We have a major catastrophe on our hands, as I am sure the Leader of the House is aware. Farmers have been damaged, farm supplies have been damaged, the value of farm land has been damaged, the road haulage industry has been damaged, auctioneers have been damaged, meat manufacturers have been damaged, butchers have been damaged, consumers have been damaged, and taxpayers will be damaged. All because of what?
  On 20 March, two Ministers came to the Dispatch Box and made statements on the same issue. Clearly, the Government did not undertake an analysis of the risk of the statements. The Ministers told us that people were dying, perhaps as a result of the transfer of BSE from cattle. What did they expect the reaction to be? The Government did not consult our European partners or the farm industry before the statements were made.
  The Government's policy on BSE is unclear. Following the initial statements, we were told that no cull was planned, then we were told that a cull was planned, then the number of cattle to be culled was planned, then the age of the cattle to be culled was in dispute, and now we have learnt that 67 per cent. of the known BSE cases in cattle were born after the feed ban came into force. There has been confusion from the day that the two Ministers made their statements. There have been continual statements, and a lack of clarity in the Government's policy.
  The Government have flatly refused to talk about the fact that British beef was banned by the United States in 1987–88—the Chancellor of the Exchequer, who was interviewed on the "Today" programme this morning, is an exception. A change in the European ban will not alter the American ban. We have not heard a succession of Ministers claiming that the Americans are being unfair.
  This morning, the Chancellor of the Exchequer referred to the American ban at least twice. He is quite right—he knows the game plan. It is to use this issue—which is of the Government's making—to turn the country to its side

  245
  by being anti-European. Hon. Members should forget the beef issue—it just happened to come along. It will not work. The farmers do not agree with the Government's current policy.
  This major problem is affecting a whole range of people in this country. It may be argued that not all Members of Parliament represent farmers. However, there is a connection to the beef industry in all constituencies— there are consumers, taxpayers and suppliers. The factories of Birmingham are still manufacturing goods and equipment used by farmers. The road haulage industry is also being affected. We have a major catastrophe on our hands, because no one in the Government analysed the potential risk and consequences of the two statements.
  The millennium exhibition was mentioned by my hon. Friends the Members for Warley, West (Mr. Spellar) and for Newham, North-West (Mr. Banks), and by the hon. Members for Hendon, North (Sir J. Gorst) and for Gravesham (Mr. Arnold). I will have to tread delicately, but I think that the result was 3:1 in favour of the millennium exhibition being in London. I shall try to redress that imbalance slightly. Without wishing to abuse my position at the Dispatch Box, I believe that the millennium exhibition should be held in the midlands.
  The millennium exhibition is moving towards being the major 1990s example of a breakdown in the accepted standards of conduct of public administration in this country. Massive public funds are involved—at least £200 million—from the lottery fund via the Millennium Commission. I say to London Members—regardless of their political persuasion—that, if it was desired to have a major exhibition in the capital city, why was the issue ever raised and why were invitations ever issued to any site in the country to put in a bid to launch the exhibition?
  There were 61 applications for 57 sites, which were reduced to two in London, one in Derby and one in Birmingham. At that point, it could have been said that the exhibition would be held in the capital, but that was not said. Last December, when the two full applications were received—one for Greenwich and one for the national exhibition centre—the rigging of the system started. Imagination, which put in the bid for the NEC site, did not submit a bid for the Greenwich site to start with. It was later asked to do so, because it was clear that its plans were superior.
  The real problem arose on 28 February, when the Secretary of State for National Heritage said that the exhibition would go to Greenwich, subject to the money being put together by Sir Peter Levene's team by May. It is now May—there is no money, and there is no scheme. We are running out of time. London is clogged and the Greenwich site is a shambles—it is unclean and unhealthy. The City of London has shunned the issue, business has shunned the issue and leading entrepreneurs have shunned the issue—only the spiv element of British society is left. Do we want the spiv element to fund this massive exhibition? Of course not.
  The London-based Government and the London-based Millennium Commission are biased against any initiatives from the regions and provinces, to the extent that leaks have emerged to the effect that, if the exhibition is not held in London, it will not be held at all. The country should have a millennium exhibition. The NEC management has shown commendable professional skill, and, even though there is a prima facie case for a judicial
  246
  review, it has not sought one. The NEC remains available to carry the exhibition for the whole of the country, as it is quite clear that it will not be a success at Greenwich.
  I ask the Leader of the House to comment on the remarks of my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) about haemophiliacs. I cannot go into the detail, but hon. Members know that there is a major unfairness—to put it politely—in relation to people suffering from hepatitis C and people suffering from HIV as a result of contaminated blood products from the national health service.
  They should be treated the same. The House should decide this issue, not the Government. I believe that, if this issue were put to a free vote, they would be treated the same. It is unfair. It is a moral issue. There would not be any arguments about this across the Floor of the House.
  My hon. Friend the Member for Hampstead and Highgate (Ms Jackson) referred to a 13-year-old British citizen who is incarcerated by secret police in a Commonwealth country—albeit one that has been suspended for the time being, but I presume that it wants to get back into the Commonwealth's good books. Foreign Office Ministers are not jumping up and down about this issue. I am not knocking the Foreign and Commonwealth Office, because, when I deal with cases, the consular officials in London do a good job.
  Pressure must be exerted on the Nigerian Government to ensure that the 13-year-old British-born British citizen returns home as quickly as possible, goes back to school and is with his family. I hope that the BBC World Service will make use of my hon. Friend's speech to shame the Nigerians into doing what any civilised Government would do to redress something that should never have happened.
  My hon. Friend the Member for Jarrow (Mr. Dixon), in one of his rare contributions, talked about the Port of Tyne authority's fight against forced privatisation. We do not know whether the changes will be beneficial in the long term. However, my hon. Friend referred to the huge contribution that the authority makes to his local economy, and that should not be affected by a Government who seek to privatise everything that moves. The case must be examined on its merits. If it is found that the authority should continue to exist, my hon. Friend's argument should be accepted.
  My hon. Friend the Member for Warley, West referred to the scandal of the private sector wheel-clamping companies and the Government's failure to introduce legislation three years after first considering the matter. There are problems all over the country—it is not confined to any one area—where the spiv element are seeking to make a quick buck. In some cases, cars are left in prohibited areas as decoys to encourage other people to park there and be taken to the cleaners. That is totally unacceptable behaviour.
  12.20 pm
  The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): I have lost count of how many of these debates I have replied to in my capacity as Leader of the House in the past four years. I thought that today's debate began a little slowly. My usual practice is to avoid saying much about anything as there is not enough time, but today I thought that I may have to make up time.

  247
  Therefore, I went to the trouble of securing a copy of the intergovernmental conference White Paper so that I could read from it as much as proved necessary in order to satisfy my hon. and learned Friend the Member for Burton (Sir I. Lawrence). However, I am once again in the position of having to rattle away and say as much as I can before the debate concludes at 12.30 pm.
  I turn briefly to the remarks of the hon. Member for Birmingham, Perry Barr (Mr. Rooker). I shall not revisit the millennium issue. I do not accuse the hon. Gentleman of abusing his position on the Front Bench, but no one is in any doubt that he represents a midland, rather than a London, constituency. However, London Members of Parliament also put their oar in this morning, so they can continue the dispute between them.
  The hon. Gentleman said that he was not present yesterday to hear the statement about beef. That was clear from his speech, because he repeated the points raised by the Leader of the Opposition, whose performance has received the reverse of rave reviews in today's newspapers. The Leader of the Opposition got it wrong. The hon. Member for Perry Barr has no doubt read the Hansard report, but I shall remind him of what my right hon. Friend the Prime Minister said.
  My right hon. Friend made it clear that his right hon. and learned Friend the Minister of Agriculture spoke to Commissioner Fischler before the statements were made to the House. He went on to point out that the issue was leaked in a Labour-supporting newspaper on the morning of 12 March. He said:
  "We spent hours that morning discussing the matter with scientists"—
  I can vouch for that, because I attended those meetings—
  "before doing what he"—
  that is, the Leader of the Opposition—
  "would have condemned us for if we had not done—coming straight to the House to report on precisely what was happening".—[Official Report, 21 May 1996; Vol. 278, c. 103.]
  If the Government had sat on the information for any great length of time, the hon. Gentleman would have made the worst kind of rabble-rousing speech from the Opposition Dispatch Box accusing the Government of a cover-up, of failing to provide information and of misleading the public. I shall not listen to too much more about that.
  I turn now to some of the other issues upon which hon. Members have invited me to comment. I turn particularly to the contribution of the right hon. Member for Manchester, Wythenshawe (Mr. Morris), who raised the issue of haemophiliac patients who contracted hepatitis C from contaminated blood products before the heat treatment began in the late 1980s. He appropriately paid tribute to the efforts of my hon. Friend the Member for Hendon, South (Mr. Marshall) in that area. I am familiar with that tragic problem, as I was Minister for Health for part of that time.
  The right hon. Gentleman knows—and was kind enough to acknowledge—that there is little that I can add this morning to the comments made on earlier occasions about the difficulties that the issue presents. My hon. Friend the Parliamentary Under-Secretary, the Member for Orpington (Mr. Horam), met representatives of the Haemophilia Society in March to describe the action that the Government are taking.
  248
  There are continuing discussions about developing good practice in the treatment of those patients and ensuring that they have ready access to treatment centres. I know that my right hon. and hon. Friends will examine carefully the right hon. Gentleman's comments, as well as those of one or two other hon. Members, including the hon. Member for Perry Barr.
  My hon. and learned Friend the Member for Burton read out a formidable list of charges, as he saw them, against the European Court of Justice. I think that I counted 11.
  Sir Ivan Lawrence: There were 14.
  Mr. Newton: I am sorry, I have missed three. It was a lengthy list of charges.
  My hon. and learned Friend kindly adverted to the fact that the Government make clear in the White Paper— which I have already brandished in the House—their concern that the court's interpretation sometimes seems to go beyond the intentions of laws as framed originally. The White Paper sets out in broad terms the proposals that we expect to discuss at the IGC, and those matters are being worked up.
  My hon. and learned Friend said that a memorandum is due for publication, but he will understand that it is not sensible or practicable for me to comment on it this morning in advance of its publication. However, I am sure that his words will be examined with appropriate care.
  The hon. Member for Hampstead and Highgate (Ms Jackson) raised a matter to which the hon. Member for Perry Barr also referred from the Dispatch Box. In view of the hon. Gentleman's comments, I make it clear that the British Government are doing—and will continue to do—everything we can to assist with the case. The British High Commission is pressing the Nigerian authorities for access to Adefolahan Mokuolu on humanitarian grounds, particularly as he is a minor.
  I understand that the hon. Lady is in daily contact with the consular division on behalf of her constituent. The acting high commissioner raised the matter with the director general of the Nigerian Ministry of Foreign Affairs only yesterday, and it undertook to investigate the situation. I am sure that my right hon. and hon. Friends will do all they can to assist the hon. Lady's constituent who is in that awful position.
  My hon. Friend the Member for Taunton (Mr. Nicholson) referred to the beef ban. I recognise the importance that he and his constituents attach to ensuring the smooth operation of the slaughter scheme for cows aged more than 30 months. My right hon. and learned Friend the Minister of Agriculture made it clear yesterday that we are now operating at close to current capacity. I am sure that he will look carefully at my hon. Friend's comments about continuing problems in his area, and I shall ensure that he sees the piece of paper that my hon. Friend passed to me on behalf of the Somerset branch of the National Farmers Union. We are serious about ensuring the smooth operation of the scheme, but we should remember that it is a big task.
  My hon. Friend overcame the frustration of recent weeks by adding to a 10-minute speech about beef that he said was terminated mid-sentence and returning to a subject that he raised with me via a question on the Housing Bill. He has shown his usual ingenuity and

  249
  dedication to his constituents' interests, and I shall ensure that his remarks are drawn to the attention of my colleagues in the appropriate Departments.
  The most engaging speech from my point of view was delivered by the hon. Member for Jarrow (Mr. Dixon), the mostly silent former deputy Chief Whip. Somewhat ominously, he has moved to what I call the "trouble-making Bench" below the Gangway. I hope that is not an augury of future difficulties. The last time that he moved from the Front Bench to the Bench behind it— an unusual manoeuvre for a deputy Chief Whip—he suddenly burst into song, and denounced the Leader of the House for attempting to improve the procedures in this place. He made it clear that his views about that were unchanged.
  I hope that we shall hear more from the hon. Gentleman in the new, responsible role that he fulfilled this morning on behalf of the Port of Tyne authority. The hon. Gentleman knows that the Government believe that the privatisation of ports produces more efficient, competitive and accountable operations, and offers greater opportunities to the people who work in the ports and benefit from their activities.
  I do not have time to elaborate that argument or to comment on any of the other speeches, much as I might wish. I will certainly make sure that the remarks of the hon. Member for Newham, North-West (Mr. Banks) are communicated to those of my colleagues who will be seeing the Norwegians at the international whaling conference.
  I have just about run out of time—I am not sure when that will happen. I will just try to complete this next sentence. I hope that everybody—not least you, Madam Deputy Speaker—has a happy holiday.
  Madam Deputy Speaker (Dame Janet Fookes):Order.

  Deregulation
  12.30 pm
  Mr. Anthony Steen: It is always a delight to see you in the Chair, Madam Deputy Speaker— and an equal one to see my right hon. Friend the Chancellor of the Duchy of Lancaster present to answer this debate. Normally, Adjournment debates are answered by a junior Minister, so to have a Cabinet Minister present is a delight, particularly as my right hon. Friend is well known for his interest in, and campaigning zeal for, deregulation.
  Deregulation is firmly part of the Conservative party's ideology and folklore, having been around for nearly 20 years. The 1979 manifesto commitments were concerned with freeing up the markets, creating less restriction for individuals and boosting an enterprise economy. The 1985 White Paper, "Lifting the burden", charted the deregulation course for the next decade. The message was simple:
  "The amount of regulation which new and established firms face acts as a brake on enterprise and the wealth and job creating process."
  By January 1994 a deregulation task force had been established, headed by none other than Lord Sainsbury. Contemporaneously, another White Paper, "Cutting Red Tape", was published. In addition to the deregulation task force, which consisted of dozens of committees and hundreds of captains of industry, a special deregulation unit was established within the Cabinet Office, employing 43 officials especially chosen for their deregulatory fervour. The cost was £1.3 million per annum.
  Parliament passed the Deregulation and Contracting Out Bill in 1994, and the Prime Minister threw his full weight behind the deregulatory initiative, saying that deregulation was at the heart of the Government's economic strategy. One year later, progress is at best disappointing and at worst deeply depressing. That Bill spent 16 hours and 11 minutes on the Floor of the House and another 92 hours and 56 minutes in Standing Committee. Among other things, it established the Select Committee on Deregulation—a fast-track system by which secondary legislation could be repealed, which has never been done before in the life of this Parliament or of this institution.
  In 1994, the Government promised that they would refer one deregulation order a week to that Select Committee. Unfortunately, 100 orders never materialised. Instead, we have had to be content with 25 orders to date. They favour people who want to go greyhound racing, to go dancing on Sunday—I have nothing against that—to change the length of the school day and to sell salmon on Sunday in open markets in Scotland, and they allow local authorities to use their pay-and-display parking meters more flexibly. The Deregulation (Gun Barrel Proving) Order 1996 saves private business £200 but—wait for it— cost £10,000 to draft and print. To achieve all that, the Deregulation Select Committee has sat 34 times for more than 50 hours.
  Deregulation has spawned an entire new layer of bureaucracy, created new buzz words and produced a new layer of Government. The Leader of the House, a Cabinet appointee and the Prime Minister are all concerned with deregulation—without it, some might not even have jobs. There is a deregulatory Minister in every Department.

  251
  Pamphlets, circulars, booklets and departmental reviews are churned out. Experts and advisers are to be found in local government, and even the Institute of Directors has deregulation advisers. The cost is enormous.
  The Select Committee is just one deregulatory initiative. Lord Sainsbury's task force, which has been taken over by Francis Maude, is another. The task force suggested that 605 pieces of legislation were ripe for repeal, and the Prime Minister added another 400. Of more than 1,000 measures identified, 643 have been repealed—but few have had the impact that Conservative Members would like. Comparing that figure with the 7,845 statutory instruments added to our legislation since January 1994 puts the matter in perspective. Admittedly, many of those instruments correct complicated or inadequate primary legislation such as the Jobseekers Act 1995 and the Children Act 1989, but that does not explain the need for 3,243 new statutory instruments already this year.
  The volume is reaching such a level that it is impossible for Members of Parliament or Ministers to scrutinise them properly. Why, despite Parliament's intentions, and the commitment by the Prime Minister and the Cabinet to deregulation—which I whole-heartedly support as a number one priority to help industry—is deregulation not happening? It is not an absence of intention or good will on the part of Ministers or officials, but a question of the long-standing culture and ethos of the country, whereby Ministers and Whitehall see their modus vivendi as passing bigger, better, longer and more complicated laws with cleverer and more experienced officials drafting, amending and improving them. The culture is not to repeal laws, reduce the volume of legislation, or cut the number of bureaucrats or red tape—although one would have thought from all the speeches and good intentions of Ministers that a great deal more was happening. Regrettably, there is a deep shadow between intention and action.
  The problem is in the public psyche, which has been conditioned to believe that rules and regulations solve problems, when they do not automatically do so. All of us receive letters from constituents demanding that we introduce new legislation. How often do Members of Parliament receive letters demanding the repeal of laws? The public have been conditioned into believing that they are better off taking less responsibility. They suffer from the illusion, and the erroneous belief, that life is better being hemmed in by a false sense of security created by additional rules and regulations.
  There are also the buzz words of safety, security and hygiene. One cannot change anything in legislation covered by those three words because they are sacrosanct and have a mystique with which nothing must interfere. If that perception is to change, rewards for goals achieved must be reversed. In future, civil servants should be promoted not for proposing and drafting new legislation but for finding a way of reducing the number of laws on the statute book.
  Deregulation is unachievable until the root cause of regulation is tackled, which means a culture shock of gargantuan proportions. Inaction in legislative terms must no longer be viewed as sloth, but as prudence. Ministers should be judged not by the number of statutory instruments that emanate from their Departments but by
  252
  the paucity of legislation coming from their offices. If the Government's aim is to lift the burden off the backs of the people, a stick and carrot approach must be introduced—a carrot for those who implement deregulation and a stick for those who do not.
  Consider, for instance, the deregulation order—one of the 25—on building certificates. It is said that the saving to business will be £68,000; but only recently it has emerged that there will be an additional cost of £350,000 for employing more local government officials to take over the administration. So the money saved to private business is simply transferred, six times over, to local authorities. The stick should have been used in this case.
  The cost compliance assessment is another example of the shortcomings in this process. The Government rightly insist that such an assessment accompany every piece of legislation, highlighting the additional burden on private industry imposed by the legislation. Unfortunately, the compliance cost assessment does not highlight the additional costs to Government and local government. That excellent idea—emanating, I think, from the Prime Minister—is thus defective because it deals only with the additional costs for private enterprise, not with those for the public sector.
  The culture Shockwaves must not stop at Dover: they must cross the channel to Brussels, from which directives, rules and regulations are spewed out at an alarming rate. The number of directives, to be sure, has declined, from 66 in 1993 to 19 this year, but the number of rules and regulations has otherwise continued at nearly 1,000 a year. They are so dispatched that most manage to avoid scrutiny by the European Parliament, the Council of Ministers or Westminster Members. Commission officials are using a procedure that denies every Parliament in Europe the opportunity to challenge the Commission's official view. Bureaucracy in Brussels has found a device in the treaty of Rome enabling it to erode the fringes of our lives, but with no accountability.
  That is fundamentally wrong, and if the Brussels bureaucracy were not enough, our own officials compound the problem by hijacking European directives and adding burdens to them, going beyond the minimum requirements in the directives. The result is even more obligations imposed on those who live in Britain.
  Gold plating has been outlawed by Cabinet Ministers in terms similar to those used by the Secretary of State for the Environment, who pledged last November on the Floor of the House that he had a strict rule that no European legislation could be gold plated in his Department. The Minister for Agriculture, Fisheries and Food has said something similar. What about all the gold plating that has already taken place? It has been going on for nearly 25 years. Why do we not pull out all those directives and remove the add-ons from them?
  Mr. Iain Duncan Smith: I have come in specifically to listen to my hon. Friend's speech. One of the core problems, surely, is that civil servants here and in Europe want to tidy up the process of democracy and get things running quickly and smoothly. Therein lies the problem with statutory instruments—the more quickly we ram them through this place, the less chance there is to consider them carefully. If people have the opportunity to examine them slowly and ask questions about them, there is more chance of their emerging in the right form.

  253
  Should we not try to change the system here and return to scrutinising more of the documents on the Floor of the House, to slow them up?
  Mr. Steen: I am all for anything that will stop this place becoming a county council and power leaking away to the Brussels bureaucracy. I am most grateful to my hon. Friend for joining in this important debate.
  In answer to my parliamentary questions to all Government Departments suggesting that we remove the add-ons, Departments wrote to say that they could not even tell me how many add-ons there have been in the past three years, let alone the past 25, because the exercise could be done only at "disproportionate cost". Disproportionate to what?
  In the past three years, the Department of Trade and Industry has implemented 33 directives; MAFF has implemented 113. Surely, with our modern technology, officials could find out which of those directives have been added to. If they lack the time, what about using the 43 staff in the deregulation unit? They could be put to work on this important task straight away.
  A good example of the damage done by gold plating is a small oyster farm in my constituency which, for the past eight years, has successfully sold about 70,000 oysters a year. It has been vetted and approved by the local environmental health people from South Hams district council. The farm uses a system that recycles sea water— a system introduced by Captain Philip Gibbon, a well-known environmentalist who is hostile to pollution.
  The proprietor uses a system that is entirely consistent with the rules in the European Community's shellfish hygiene directive 91/492/EC. There are seven identical farms in the Netherlands which seem to operate successfully without falling foul of Dutch or EC law. The problem, therefore, is not the local health officers but the Government's officials in Weymouth, who are refusing to grant a licence to Captain Gibbon.
  The problem is further compounded by the lack of an appeal mechanism. During the passage of the Deregulation and Contracting Out Bill, I and other colleagues pressed for a local appeals mechanism. If officials and business men disagreed locally, there should be an appeal procedure in the local magistrates court, we argued. The Government opposed the idea; two years later, all we have is a consultative draft statutory instrument—yet another one.
  So Captain Gibbon has nowhere to go. He has closed the plant. Do we want to create small firms or close them? Ours, after all, is supposed to be the party of small business. Yet Captain Gibbon has been clobbered by regulatory initiatives and the zeal of MAFF officials. All he can do now is go—believe it or not—to the European Commission; or he can take up the suggestion of the Fisheries Minister and go to the Ministry with the chief environmental health officer of South Hams district council and MAFF officials, whereupon the Minister will try to act as judge in the case.
  Deregulation is just not happening in the way we were promised. It is proving much more difficult than we thought at first. A stick and carrot approach should be introduced: promotion for those who deregulate and demotion for those who do not. Let us get rid of private Members' Bills in their current form. What we want are
  254
  private Members' deregulatory Bills. Members in the new Session should be allowed to introduce only deregulatory measures, not new legislation.
  I also suggest a review of the gold plating on all the directives implemented here over the past 25 years. That should be done in the next three months by the deregulation unit in the Cabinet Office. Just as the Treasury approves all Government Departments' expenditure, the Cabinet Office must do likewise for all statutory instruments, directives, rules and regulations emanating from Government Departments. The Cabinet Office should vet every statutory instrument and should have a Treasury-like veto on deregulation. The Minister could make a great deal of progress in this area.
  Compliance cost assessments should include the additional cost to the public purse, not just that to the private purse. They should also list the numbers of additional officials and the cost of employing them incurred by any new deregulation measures. Above all, we must work for a change of culture, in Whitehall and at Westminster so that, with renewed vigour, we can tackle the blanket of red tape which continues to suffocate enterprise and unnecessarily to hold back our national economy.
  12.48 pm
  The Chancellor of the Duchy of Lancaster (Mr. Roger Freeman): I welcome the debate and congratulate my hon. Friend the Member for South Hams (Mr. Steen) on it. It is noticeable that, while Conservative Members take an interest in the subject of deregulation, not a single Opposition Member is here for the debate. We have noted not just the Opposition's lack of interest but even their hostility to the notion of deregulation, to the unit in the Cabinet Office and to the deregulation task force. We have an immense task before us, and I thank my hon. Friend for taking such a close interest in it.
  I sometimes feel like a remote descendant of King Canute. The tide of legislation—primary and secondary, European and domestic—keeps coming in, and one does one's best, with the help and support of my hon. Friend and Government colleagues, to stem it. As life becomes more complicated, we inevitably need more regulation, but it has to be better and simpler. When we introduce new regulations, we must take the opportunity of repeal.
  My hon. Friend rightly referred to the need for a change of culture. That change of culture must occur not only in Whitehall, but in Brussels. I shall have something to say about that in the remaining 11 minutes of the debate.
  My hon. Friend was right to stress the importance of small businesses and the impact of regulations on them as employment growth depends on small businesses. I have long believed that regulation should be a rhetoric-free zone. The devil is in the detail. It is boring, it is difficult and, as the Duke of Wellington used to say, it is very hard pounding, but it is essential work.
  I shall divide my remarks equally between a brief resume of what we have achieved so far and what we need to do. I note from the Order Paper that tonight we shall be asked to vote on three excellent deregulation measures resulting from the deregulation and contracting out procedure. My hon. Friend is right to say that we have laid only 26 such measures and 12 have become law so far, but more significant measures will be laid.

  255
  I commend the cheque truncation order, which will save the banking industry many millions of pounds by avoiding the unnecessary circulation of old cheques once they have been drawn, debited and credited to accounts.
  The compliance cost assessment procedure is working reasonably well. I take my hon. Friend's point about public sector costs and I shall look again at that part of the procedure. We have just published a new booklet on the other side of compliance cost—the risks and benefits to society of proceeding with legislation. I commend that new booklet to the House and I have circulated it to all Departments. In respect of all legislation—primary, secondary, European and Whitehall generated—we should be looking at the cost and the benefit and taking a deep breath and deciding not to proceed when Ministers are not convinced that there is an overwhelming case for proceeding.
  We are looking at statutory instruments ex poste—or after Ministers have approved them. I shall say more about that in a moment. In respect of Europe, I am going to Brussels on Tuesday, to the Internal Market Council, which will consider a resolution that I hope will commend itself to most countries. It instructs the Commission to adopt new policy procedures in respect of the impact of regulations on small firms and to reaffirm the principle of proportionality, and it urges the Commission to draw up directives that are goal based and not prescriptive.
  I am pleased that the Commission has adopted new procedures—before agreeing directives and proposing them to Councils of Ministers—on the principle of consultation, assessing the costs, improving the principle of the fiche d'impact system that has operated for a number of years—I believe, unsatisfactorily—and re-emphasising the need for subsidiarity, that is, not legislating in the first place if it is not necessary.
  I am pleased that, since November, when we began our campaign in Europe, we have reaped some modest fruits of that effort. We have achieved an exemption for unit pricing for small businesses. That is a small but welcome step forward. Following the Internal Market Council meeting on Tuesday, the Commission will set to work on codifying and simplifying blocks of legislation in respect of Intrastat—documents dealing with imports and exports in Europe—and construction products in an attempt to simplify the regulations to enhance Community trade. I hope that next year we shall simplify regulations on machine standards and food hygiene.
  We have published a new checklist for Departments dealing with gold plating. My hon. Friend is absolutely right to focus on that and I have to admit that he is correct. We are now looking to stop gold plating. My Department does not have the staff or resources—even with my 42 excellent civil servants—to go back not just 24 years to accession, but 700 years of statute law.
  I also have good news to report. Yesterday, my right hon. Friend the Minister of State at the Home Office announced the proposed new fire regulations. I am delighted to say that there is no gold plate on those proposed United Kingdom implementing regulations following the European directive. It has been a long, hard-fought battle involving proper discussion between all Departments, but we are not imposing measurable financial burdens on British businesses by implementing those regulations.
  Mr. Steen: I congratulate my right hon. Friend on his achievements with the new fire regulations. I know that he has fought long and hard and he has managed to put out most of the fires. If his Department does not have sufficient staff, could he not ask other Government Departments that have tens of thousands of officials to help? Each of his Cabinet colleagues could be responsible for looking at the past three years gold plating in the directives relating to their Departments.
  Mr. Freeman: Yes, I shall, but not necessarily in that precise way to that or time scale. It is important that we review what has happened in the past.
  Sir Donald Thompson: I admire the way in which my right hon. Friend has stuck to his task of deregulation, which often resembles wading through treacle. Perhaps one of his civil servants could make a list of our successes—telephones, airways and even lifts come to mind—to be circulated among our partners in Europe to show that deregulation really works.
  Mr. Freeman: I gratefully accept my hon. Friend's excellent suggestion. I had it in mind to produce something during the summer describing exactly what we have done so far and our plans for the future. I might consult my hon. Friend on its exact form and content.
  Mr. Duncan Smith: Will my right hon. Friend give way?
  Mr. Freeman: Perhaps my hon. Friend will allow me briefly to make progress as I would like to outline our plans. We need to review existing directives. I would single out the electromagnetic compatibility directive, which is causing many problems.
  I would like to lay shortly our model appeals order, which will be open to Departments to include in their own primary legislation so that we have a sensible procedure for appealing to tribunals. I take the interesting point made by my hon. Friend that there could be an anomaly in respect of his constituent's oyster farm. We are proposing a new procedure to appeal to tribunals, but not to magistrates courts. I believe that my hon. Friend's constituent has a right of appeal to a magistrates court under the food safety legislation, but only on a point of law and not on the merit of the case. So the debate has raised an important matter that I shall now review.
  Mr. Duncan Smith: As my right hon. Friend the Leader of the House is sitting next to him on the Front Bench, perhaps my right hon. Friend could pass on to him the suggestion that the House should have a better mechanism to slow down the process of debate, which is not good enough. If the statutory instruments procedure allowed for a further stage of consideration, that would help.
  Mr. Freeman: I take that point. I am grateful to my hon. Friend for putting it on record once again. I know that my right hon. Friend the Lord President will read the record of the debate and note that point.
  Let me deal with two final points, both of which are extremely important. The first relates to enforcement and the right of appeal—not necessarily in a legalistic sense— and to the problems of disproportionate enforcement at

  257
  the point of the consumer and how the average citizen is affected by an enforcement order or procedure initiated by a trading standards officer, an environmental health officer or a health and safety executive officer. We have in place, by following the procedures of sections 5 and 6 of the Deregulation and Contracting Out Act 1994, a mechanism by which one can ask the official for a written explanation of the procedures, but we should consider going further. I should like to consider carefully, possibly with the advice of my hon. Friends who take an interest in deregulation, how we can empower the citizen and give the citizen the right to raise quickly and automatically a concern about the method by which a regulation is enforced.
  On the flow of legislation, I am not convinced that we need a single conduit through which all statutory instruments flow in the Cabinet Office. That would be unwieldy, although I shall reflect on it. I would like all Departments to use the compliance cost assessment and risk assessment principles properly, and all Ministers to be satisfied in all instances of statutory instruments affecting business and industry that proper procedures have been followed.
  I should like to reflect further on the general procedures through which we handle statutory instruments. There are 3,000 a year, although probably no more than 1,000 affect businesses and industries. I am grateful to all my hon. Friends who, unlike Labour Members, take an interest in deregulation. I look forward to working with them.

  Motability
  1 pm
  Mr. Alan Simpson: I make just one apology for bringing this matter back before the House—a very sad and belated apology to David Whitton, a remarkable, extremely bright and extremely principled campaigner for disability rights, who suddenly and tragically died quite recently. I apologise to David because, when he first contacted me about Motability—it seems a long time ago—I promised him that I would undertake to get Parliament to take action on what he believed was a quite unprincipled scam being perpetrated by a cartel of high street banks. He believed that the banks were exploiting many disabled people, the allowances made to them through the mobility component of the disability living allowance, and the public, because the scheme is centrally funded. I am very sad that I have not been able to honour the promise in David's lifetime, but it does not deter me in the slightest from continuing to pursue the matter until I am certain that it has been resolved in the terms that he would have wished.
  David's belief about what is wrong with the relationship between Motability the charity and Motability Finance Ltd., the private, for-profit financial arm, is very simple. He believed that up to £100 million which rightly belonged to disabled people had been inappropriately syphoned off by the banks into their private profits. I will explain how that might have come about.
  It is important to distinguish between Motability the charity and MFL the private company. Motability the charity encompasses a wonderful idea. I have no complaints about the way in which it is run. But there are major differences between the two bodies. One is that of scale. The charity has a turnover of £3 million, while MFL, the finance company, has a turnover of £375 million, assets of £1 billion and credit at any given time of up to £1.5 billion. I understand that MFL is the biggest car-leasing business in the world.
  I initially became aware of the matter through another campaigner for disabled rights, my constituent Mick Reynolds, who was in the bizarre position of being pressured by the finance company to accept a vehicle under the scheme which did not meet his needs and would have cost him more than a vehicle which did meet his needs and that he would have preferred. We fought a long battle to reverse that decision, during which he educated me about some of the things going on behind the scenes in MFL and introduced me to David Whitton. It was from there that my real education in the behind-the-scenes activities of Motability Finance Ltd. took off.
  All questions on the matter boil down to four basic questions: who controls whom; whether the arrangements between a charity and a private company offer the best deal for disabled people; whether excess profits and charges are being made; and whether the stranglehold of the banking cartel is corrupt and unaccountable.
  I have made a considerable effort to find out what is going on inside MFL, but its organisational structure makes a masonic lodge look like open government. I suspect that the House could find out more about foreign spy rings than it could about the internal goings-on in the Motability Finance Ltd. empire and how the firm manages public money.

  259
  There have been a series of internal reports on MFL and Motability, all of which have been undisclosed and have criticised the level of profits and the relationship between Motability the charity and MFL the private monopoly. The first report that I came across was one picked up by the accountancy firm KPMG, in which it suggested that the banks were making a 30 per cent. return on capital. That is more than double the rate of return of private car-leasing companies.
  When MFL was challenged, it said that the figures were notional and that the report was an exercise. Yet the exercise was conducted by KPMG on the basis of figures provided by MFL. If a company provides figures from which such a conclusion is drawn, it should accept the validity of the conclusion reached by a reputable firm of accountants.
  The second report I came across was commissioned by an equally principled and wholly praiseworthy civil servant, Simon Willis, who was seconded into the Motability scheme. He had the sense to bring in a company of charity solicitors, Birchams, which conducted a report on the way in which the relationship between the charity and the finance company was working. It made the most profound criticisms of that relationship. It said that
  "the Governors of Motability have no clear picture of the effective rate of return being earned by the banks or the current position on surpluses since MFL's accounts reveal nothing on these lines and the management accounts of the banks relating to the Motability scheme have never been disclosed.
  We consider it imperative that the Governors of Motability now require the banks to disclose the relevant accounts so as to provide a full picture of their trading position, profitability and accumulated reserves and surpluses. Without this information, the Governors are incapable of performing their duty to satisfy themselves that there are no alternative funding sources which could provide better value for money to Motability's customers."
  Birchams had no axe to grind. It is important to note that, having issued the report that it was commissioned to produce, it was immediately decommissioned; the rest of the processing of its report remains a mystery, having been handled internally within Motability Finance Ltd.
  The report commissioned by Simon Willis came on the back of an earlier and in many ways much more damning internal letter written by someone who ought to have known exactly what was going on in Motability—Alan Outten, who was not only a banker and a member of the board of directors of Motability Finance Ltd. for 15 years, but had been deputy chairman of Motability Finance Ltd. He said:
  "Some 2 or 3 years ago the banks reduced their gross margin to 1.5 per cent. gross, made up of 0.5 per cent. over cost of funds plus 1 per cent. profit margin … Somewhere along the line, MFL 'shifted the goal posts' without the agreement of the Charity, so that each bank received a flat management fee of £50,000 each plus an additional funding margin of 0.1 per cent.
  This change effectively increased the 'management charge' from a maximum of £600,000 to £1 million … It is surely an anomaly that the board of MFL should be paid £1 million per annum (and increasing) by the Charity for representing the interests of the banks, which are not consistent with the objects of the Charity."
  I suspect that that letter was one of the factors that prompted Simon Willis to call for the independent report by Birchams.
  Since that time, a further report has been commissioned. Schroeders merchant bank was asked to look at profitability levels within the company. Again,
  260
  I have been unsuccessful in getting a full copy; I have managed to get only an executive summary of the bank's report, but the bottom line is simple. Schroeders bank says:
  "The current margins, which were agreed in the autumn of 1993. appear now to be out of line with the market. The margins charged by the Partners should therefore be revised in the light of this benchmarking exercise."
  In practical terms, that comment amounts to a statement by Schroeders that the margins to which the banks have been working are probably twice as high as could legitimately be justified.
  There have been changes in the charging regime only as a result of public pressure from disabled people, from organisations representing disabled people and from campaigners in this House and in the other place who have sought to raise the matter in both Houses. Since the matter was raised, MFL has made a series of reductions, but all have!been designed simply to forestall further criticism.
  The whole structure of MFL is based on obsessive secrecy and obsessive control. The company has seen not only the Birchams report and the Alan Outten letter, but a letter sent by Simon Willis to the chairman of Motability pointing out his concerns about the extent to which a public charity was effectively owned by a private, for-profit company and about the fact that that company had no accountability to the charity or, ultimately, to the Government who fund it. In his letter to the chairman. Simon Willis said:
  "All suppliers to the scheme are subject to continual or periodic competition except the banks … Not only are they exempt from market pressures; the governors of the charity have repeatedly beer denied access to the partnership accounts which underpin the scheme's financing.
  The charity commissioners run an annual profitability study to determine the appropriateness of the profit margins … The 1992 study was shown briefly to the governors but all copies were then recalled. Among several recommendations which have not been pursued, it concluded that 'higher than envisaged returns appear to be being made by the Banks.' For some reason the 1993 study was not shown to the executive governors. I only saw it in draft and 1 seem to recall a surplus approaching £100 million and a return or capital of over 20 per cent. to the funding banks."
  That is not a picture of a charity being able responsibly to oversee its stewardship of the allocation of public moneys and to fulfil the goals of a laudable scheme which gives disabled people the mobility to which they are entitled.
  We are currently waiting for the report by the National Audit Office. I believe that the delay in issuing that report is probably a result of its having been nobbled. I am led to believe that there are aspects of the relationship between MFL—with its beneath-the-surface partnership accounts—and Motability that will not be allowed to be properly explored.
  Throughout this time, as the contingency funding is allowed to remain in the banks' hands and MFL is driver by the banks' priorities, I have had a constituent, Liz Carr. whose physical condition has changed dramatically since she acquired a vehicle. She now finds that she is unable to get a change in her lease to entitle her to a more appropriate and adapted vehicle because, she is told, adaptation funds are not there. The fact that some £100 million is sitting in an account somewhere else suggests that the funds are indeed there, but that moneys belonging to disabled people are not being allowed to be used in the interests of disabled people.

  261
  Although I said that MFL had not been unresponsive, it is worth bearing in mind its first response. The first criticism produced a remarkable change in the company. The chair of the company wrote back to the charity at the end of 1993 saying:
  "I am delighted to inform you that at the meeting on the 7th December there was unanimous support from the banks to make a donation to the charity of fifteen million pounds in March 1994, with a commitment to advance a further ten million pounds in March 1995."
  What a generous offer. Ignoring for the moment the fact that the company was giving back disabled people's money to disabled people, what troubled me most were the strings attached to the offer. The chair went on to say:
  "Given that such a donation will result in an initial insufficiency of reserves, it was also felt necessary that certain assurances should be sought from the charity."
  The most important of those assurances was that
  "the charity will not, without the partners' prior consent, seek to admit any other lessors into the scheme."
  Thus the terms on which money would be handed back was a guarantee that the banks would be offered a perpetual monopoly so that they could continue to milk a no-risk leasing scheme, using public money to provide themselves with comfortable private profits. That is a wonderful and unique example of public money being used to provide a banking cartel with money for nothing and perks for free. There is no way in which the Government—or Motability—can either test the value for money offered by the banks or renegotiate terms on the basis of clear knowledge of the charges being made. The current arrangements are untenable and unprincipled.
  That is not just my view; I believe that the Minister also takes that view. I am grateful to whoever it was who supplied me with a copy of a letter sent by the permanent secretary at the Department of Social Security. On 3 February 1995, he wrote to Gerry Acher, the vice chairman of Motability, saying:
  "My Secretary of State said that a monopoly could not continue unchallenged indefinitely".
  The permanent secretary also said that in terms of the requirements of the charity, it was important that three key issues were addressed. First, the charity must be able
  "to demonstrate that there is sufficient competitive pressure in the scheme to ensure that disabled customers are getting the best deal possible."
  Secondly, there was a
  "need to get a properly documented memorandum of understanding between the Department and Motability, and between Motability and MFL as soon as possible."
  Thirdly, the Comptroller and Auditor General had to be assured that
  "proper control is exercised in disbursement of public monies on both the direct DSS payments to Motability and the DLA money which funds the scheme."
  On this we have made little or no progress. Having raised the matter initially, I have started to get letters from distributors telling me of their embarrassment at knowing that they could offer disabled people better terms through other commercial credit organisations than through the leasing arrangements in which Motability Finance has a monopoly. In some of the examples that I have been given, interest rates of 20 per cent. APR were quoted: twice the rate that other finance organisations could have offered. In his original letter, Simon Willis made precisely
  262
  this point—that an array of banks and credit companies in the market place could be tested to discover whether the MFL banking cartel offers the best deal in the interests of disabled people. That possibility has been consistently thwarted, undermined and rejected.
  In one sense, I cannot blame the banks. They are in a position in which they are fishing for money in a barrel, and one can hardly blame them for wanting to continue fishing. But it is not an acceptable position, and neither disabled people nor the House can be expected to tolerate it.
  I ask the Minister to undertake two clear actions. I do not and will not go along with the line of inquiry that simply asks why this arrangement, which I believe is both crooked and corrupting, should have been allowed to continue for so long. I know that outside the House there is a great deal of speculation about the personal and corporate links between those who appear to have significant influence in the shaping of policy in Motability Finance Ltd. and donations that have been made over the years to the Conservative party, but that is for other people to explore.
  My reason for raising the matter in the House today is to ask for two things. I ask the Minister to instruct Motability to open up its options and to break the banking cartel's sense of ownership of the charity. The charity must be in a position to pursue its own priorities so that its destiny and resources are not at the behest of banks and so that it can, if it so chooses, test out the banks' offer against other possible sources of money. I hope that the Minister will give the House that assurance today.
  I hope that the Minister will also assure me that he will support another action that I have taken today. I have written to the Chairman of the Public Accounts Committee asking for that Committee to investigate this matter. I have been told that, behind the scenes, there is a great fear that Parliament will seek to scrutinise some of the completely unjustifiable terms on which the relationship between the banks and the charity has been allowed to continue. I have written to the Chairman of that Committee to ask it to investigate the matter so that there is a proper parliamentary investigation of what is going on. I ask the Minister to join me in supporting that approach.
  1.22 pm
  The Minister for Social Security and Disabled People (Mr. Alistair Burt): I am grateful to the hon. Member for Nottingham, South (Mr. Simpson) for raising this important subject for debate, which I am more than happy to answer. I am extremely disappointed that he has left me no time to deal with the points that he has raised, so I shall not bother to answer many of the points. If the hon. Gentleman does not give me sufficient time to deal with the issue properly, he cannot expect me to deal with it in a half-hearted fashion. He knows that the National Audit Office is dealing with the matter and that a report is expected soon.
  I am sure that the hon. Member for Nottingham, South used it as a casual phrase, but he should be aware of its seriousness: simply to refer to the delay as being due to the likelihood of the National Audit Office "being nobbled", I think, means that he is accusing a public servant of being corrupt. It is up to him if he is content to leave that comment on the record, but that is what it

  263
  means. He is saying that if the NAO comes out and reports more or less along the lines that he has taken, fair enough, he will look at the report. If it does not, however, it is because a public servant is corrupt. If that is not what he meant, I urge him to take another opportunity, in due course, to make that very clear.
  As most hon. Members know, Motability was set up in 1977 with all-party support. The then Secretary of State invited the late Lord Goodman to consider how disabled people could use their mobility allowance to gain access to a vehicle on terms representing good value for money. Lord Goodman, with Lord Sterling—Motability's present chairman—approached the Committee of Clearing Banks for assistance. They then set up the financing scheme which the hon. Gentleman now regards as crooked and corrupting. I am sure that they would be disappointed, and that the previous Labour Administration would be disappointed, to be associated with the words used by the hon. Gentleman.
  As the hon. Member for Nottingham, South went on to say briefly, Motability has developed to become probably the most successful organisation of its kind in the world. It provides an opportunity for independent transport for hundreds of thousands of people who would otherwise not have such transport. It is a shame that that aspect of the matter is not highlighted more often. Motability is a very large scheme. Funding has grown. The assets owned by the bank, to which the hon. Gentleman referred, are the cars that people drive. As he will be aware, last year Motability achieved a significant milestone with the handing over of the 500,000th car. The Government therefore support the objective of the Motability scheme and acknowledge the very real benefits that the scheme can provide by allowing disabled people to become independently mobile.
  The custodians of the scheme must be the governors of Motability. The governors and trustees have very clear responsibilities in relation to the general administration of Motability's aims and objectives, as set out in its royal charter, and in controlling the various charitable funds at its disposal. It is for Motability to ensure that the suppliers of the scheme offer value for money. Motability is a registered charity and, as such, is required to deposit copies of its annual accounts with the Charity Commission and to comply with company and charity law. As a requirement of Government grant, Motability must also submit its annual accounts to the NAO and is open to scrutiny by the NAO.
  As the hon. Member for Nottingham, South knows, the NAO is currently preparing a value-for-money report concerning the Motability scheme. If Parliament subsequently wants to scrutinise Motability and its work, that would present no problem for Ministers or, I should imagine, for the scheme. If Parliament wishes to do that, it would be perfectly proper. Overall, however, the hon. Member is setting up a conspiracy theory and any evidence that comes to hand which does not back up that theory can be dismissed in one way or another. I find that disappointing.
  The hon. Gentleman raised a number of specific points, of which I shall be able to deal with only one or two. However, I shall deal with some of the basics.
  264
  Who is in charge of the scheme? According to the hon. Member for Nottingham, South, it is the boss banks or something like that. The Motability scheme is a unique partnership between Government, the charitable sector and the private sector. Each partner in the scheme has its part to play. The governors of Motability have clear overall responsibility, as set out in its royal charter and articles of association, to ensure that the scheme operates in the interests of all beneficiaries.
  I should deal with the transparency of the scheme, because that is important. While not directly responsible for the operation of the Motability scheme, I am keenly interested that it continues to achieve the Government's objective for the scheme: the provision of personal transport, for those who qualify, at terms which represent good value for money for the disabled customer. We are united in putting the disabled customer at the heart of our concerns and in wanting to ensure that the scheme works well for them.
  Adverse comment and criticism of the scheme is a matter for serious concern and urgent attention. Having seen Motability's outstanding success, and being confident of the operation's propriety, I have been surprised at the range of criticism levelled at the scheme and at many the guises in which it has appeared. However, I do not take any issue with the hon. Member for Nottingham, South or with any others for seeking to find out information about the scheme and to raise legitimate questions.
  A proportion of what the hon. Member for Nottingham, South said—he knows that we have a good relationship— was perfectly fair and reasonable. It is only when he questions propriety and uses language that I regard as unfortunate that I think he goes too far. But it is right to ask questions: there is no problem about that.
  Given the criticisms that have been made, it is possible to recognise that earlier recognition of the depth of the concerns voiced about transparency and swifter action to provide details on the operation might have helped to avert the current situation, in which lack of knowledge has led to unjustified suspicion. I should also point out that, as a registered charity in receipt of Government funds, Motability deposits its accounts both with the charity commissioners and with the NAO, while MFL— the limited company—deposits accounts at Companies house. They therefore all have to be open to public scrutiny.
  Much has been made of the structure of the scheme and the suggestion that partnerships have been set up to hide the movement of funds through the funding banks. That is not the case. The scheme was set up in a tax efficient and perfectly legal manner to ensure that disabled people gain the maximum benefit. I am anxious that Motability should be able robustly to deal with the criticisms that have been made and to demonstrate fully the propriety of its operation. I believe that the publication of the NAO report will provide the most appropriate opportunity for that. When it is published, I shall be more than happy to talk to the hon. Gentleman about what it reveals. I presume that there will be an opportunity to discuss the matter then.
  I am extremely sorry that I have not had the opportunity to say more. Had I been given more than eight minutes, I probably would have done.

  Mongolia
  1.30 pm
  Mr. William Powell: It is a privilege and a pleasure to introduce a short debate on the United Kingdom's relations with Mongolia. It is a very long time since the House had the opportunity to discuss those relations—it is certainly a long time since they were discussed at such a reasonable hour. My noble Friend Lord Rees told me that there was much speculation about the Mongolian tax system during debates on Finance Bills in the 1970s but, that apart, there has been precious little parliamentary discussion of Mongolia.
  However, that is not to say that there is not a significant number of hon. Members with a real knowledge of and interest in this particular subject. I became interested in Mongolia thanks to our former colleague Sir James Kilfedder, whose untimely death left such a void in those of us who knew and loved him dearly.
  Mongolia is not—to adapt a phrase used by our former Prime Minister, Mr. Neville Chamberlain—a faraway country of which we know little. That is far from the truth. As we speak, at this reasonable hour, darkness is descending in Ulaanbaatar. It would be perfectly possible for someone from this country to reach Mongolia by air in well under 24 hours, so it is not a faraway country, but it is a most interesting one.
  Mongolia is about the size of western Europe, and its population is 2.3 million—about that of Greater Birmingham. In other words, a country the size of half our continent has a population equivalent only to that of our second principal city. It might have a small population, but it has masses of what President Kennedy used to call geography.
  No country in the world has more sunshine than Mongolia. There are few clouds, at least in the physical sense, although I shall refer to some aspects of public policy which could be described as clouds. The sun shines, and the sky is blue. To the north of Mongolia lie the Arctic wastes of Siberia and its 100 million people. To the south lies the Gobi desert and Inner Mongolia, as it used to be called.
  To the east is the great wall of China, Beijing and the plains and riches of China, which have so fascinated people from our continent since the time of Marco Polo. To the west is the romance and mystery of Bukhara, Samarkand and Tashkent. That is an enormous area of north central Asia, with which this country has long had friendly relations.
  I am proud and pleased to be able to say that relations between our two countries are as warm today as they have ever been. The President of Mongolia has just made a successful visit—the first ever such visit—to this country. Along with the hon. Member for Bolton, South-East (Mr. Young), I was privileged to be part of the fifth Round Table delegation, which, under the redoubtable leadership of my noble Friend Baroness Trumpington, visited Mongolia shortly after Easter.
  This is May, and it should be springtime in Mongolia, with the equivalent of alpine flowers all over the plateau, but, for reasons that I shall identify in a moment, since our visit—but, I hope, not because of it—a terrible tragedy has befallen that country. However, I want to use this debate not to dwell on darkness but to identify some of Mongolia's many assets which should be of interest and advantage to us.
  266
  Mongolia's population is highly educated. Probably no other country has achieved such good results, per head of the population, in the school and higher education system. It was a privilege and a pleasure to me to meet people who had learned about the market economy, for example, at the university of Leningrad, and who had been able to learn something of European culture and civilisation in the somewhat unlikely institutions built in the spirit of those awful old reprobates, Walter Ulbrecht and Mr. Honecker of the former East Germany.
  What we would regard as such an unpromising start has nevertheless left the Mongolian population educated, sophisticated, skilled and knowledgeable, which is a massive asset. Mongolia also had an outstanding health system, which, alas, has to some extent fallen into decline as a result of what Mongolia regarded as the immense tragedy of the collapse of the Soviet empire.
  In the Soviet days, Mongolia was not a Soviet slave or captive nation, as some countries in eastern Europe felt themselves to be; rather, it was a friendly and integrated part of the Soviet world, although its economy was very dependent on mutual trade with the old Soviet Union. Therefore, the collapse of the iron curtain and the Soviet system reduced overnight the wealth of the nation by one third. Very few countries could sustain such a blow, but Mongolians, with the good humour that we would expect of them, set about introducing reform.
  The World bank and the International Monetary Fund—two institutions familiar to the House—arrived in Mongolia and gave advice that the people were happy to accept, after proper consultation. Mongolia then proceeded with modernisation, liberalisation and the start of a programme of privatisation.
  Of course, as the old trade links had been destroyed, and as there was no infrastructure of alternative trading routes, the blow suffered by Mongolia in the early 1990s was formidable. That is one reason why I say to the Minister of State, Foreign and Commonwealth Office, whom I welcome to his place, that I hope it may be possible for us to do more to assist Mongolia than has hitherto been possible.
  Mongolia has some outstanding products of its own. The aficionados of vodka say that Mongolian vodka is the best in the world. There is no question but that its cashmere is of the highest quality. I hope that it may be possible to expand trade in those two important items between Mongolia and Great Britain.
  There are other opportunities for us, and the Round Table delegation enabled us to explore some of them. I welcome the fact that the Confederation of British Industry was represented on the delegation. Much hard work was done in acquiring information and intelligence to be spread among companies in this country to enable them to recognise those opportunities.
  I pay tribute to a company in my constituency, Marlec Engineering, which is the only company in this country ever to be awarded the Queen's award for industry for exports to Mongolia. The company has supplied Mongolia with wind-powered machines for generating energy.
  Our relations with Mongolia are the product of hard work. I pay tribute to the Mongolian ambassador to this country, who has been here for more than a year and has worked hard to improve our relations. I also want to pay tribute to his predecessor, who was here for a number of

  267
  years. I knew him well, and I was delighted to see him again in Ulaanbaatar. He is now the deputy Minister for Foreign Affairs.
  On the British side, I pay tribute to the wonderful work done by the non-governmental organisations. These are essentially British in character, and they are doing useful work in Mongolia. For example, the work of Save the Children in Mongolia—led by a scion of the Dukes of St. Albans—is as valuable as its work in any other part of the world. I also pay tribute to the splendid daughter of Canada who led the British team of volunteers from the Volunteer Service Overseas. There are many non-governmental ways in which British people are engaged in important and necessary work in Mongolia.
  I also pay tribute to our ambassador and his excellent staff in Ulaanbaatar. At one stage, it seemed that the British embassy—opened in 1962 and the first western embassy in Ulaanbaatar—might not survive some of the periodic efforts of the Foreign and Commonwealth Office to save money in our posts abroad. Fortunately, Ulaanbaatar was saved from that fate.
  The work of Mr. Sloane, our ambassador—who is shortly to retire—his wife and his excellent staff has been outstanding, in both the public and the private sector. Too often, hon. Members ignore what some of our less important posts abroad do, but sometimes the staff in posts in what may rank as only minor countries do work at least as important as, if not more important than, those in the great posts of Washington, Paris, Bonn and Japan.
  My plea today is that Mongolia deserves British attention, and one area in particular that I wish to stress is the know-how fund for the republics of eastern Europe. Mongolia was excluded from that fund—perhaps for good reason—but it was just as much a part of the Soviet system as Bulgaria, Romania, Czechoslovakia and Poland. It is somewhat strange that it has been excluded from the scope of the funding. But I do not want to be too technical. If for any reason the know-how fund is not an appropriate vehicle to try to assist the Mongolians, I hope that it may be possible to boost our overseas aid funding, so that Mongolia receives a higher priority than at present.
  I pay tribute to the university of Leeds, which. is doing excellent work in educating in our language students from Mongolia. However, there is some suggestion that Cambridge university—the world's most important university—should abandon Mongolian studies. Mongolian may not rank as the most important language in the school of oriental languages at Cambridge, but it is important that a university of the quality of Cambridge should continue to make it available. I hope that my right hon. Friend the Minister of State will draw to the attention of the vice-chancellor the fact that it is the view of many hon. Members that Mongolian should be retained at Cambridge.
  May I also say how important the overseas service of the BBC is? In a curious way, this country has managed to nurture the leading English language authorities in countries such as Mongolia through the work that they do for the BBC overseas service. We were blessed in Mongolia to have as one of our number a man who is undoubtedly regarded worldwide as the leading academic authority on Mongolia in the English language. He was
  268
  able to acquire this skill through the work he did for the BBC overseas service. That is an important way in which we can assist Mongolia.
  Finally, I wish to refer to the events in Mongolia since we left shortly after Easter. Hon. Members may be aware that some 80,000 sq km or 31,000 square miles— equivalent to an area stretching from John O'Groats to Land's End and from Milford Haven to Great Yarmouth—has been on fire. This has had a devastating effect on the country and its infrastructure, which was not the strongest in any event. The UK rapidly moved in to offer £50,000 on a bilateral basis and then through the multilateral funds to assist in the international effort to control the fires in Mongolia. But more is required, and I hope that we can give everything we can to help Mongolia at this time of maximum stress and trial.
  We went in friendship, and we were received in friendship. Britain has built up friendly relations with this most excellent country, and my most fervent wish is that we continue to build upon the progress that has been made in the past decade and that we continue to look to Mongolia as a friendly, attractive and worthwhile partner in international affairs.
  1.45 pm
  The Minister of State, Foreign and Commonwealth Office (Mr. Jeremy Hanley): I am grateful to my hon. Friend the Member for Corby (Mr. Powell) for giving us an opportunity today to discuss our relations with Mongolia. Mongolia is not a country that normally receives much public attention here, inside Parliament or out, and this debate is a welcome opportunity to redress that.
  Before doing so, I would first like to pay tribute to the work of my hon. Friend as chairman of the British-Mongolian parliamentary group. I must also thank both him and my right hon. and noble Friend Lady Trumpington—to whom he referred—who led the delegation, and to the hon. Member for Bolton, South-East (Mr. Young), who also participated, at last month's fifth meeting of the Mongolian-British Round Table in Ulaanbaatar. I gather that it was a resounding success, and my hon. Friend confirmed that. I know that many constructive proposals for expanding our relations emerged from that meeting, and we are studying them carefully.
  Since then, we have also had the pleasure of welcoming President Ochirbat to the United Kingdom on the first ever visit by a Mongolian Head of State to this country. He had an audience with Her Majesty the Queen, and discussions with my right hon. Friend the Prime Minister and other colleagues. I was honoured to have three meetings with him during his visit, and we all exchanged views on the ways in which Britain might best be able to help support and sustain Mongolian development. I also pay tribute to His Excellency the Mongolian ambassador, who keeps in touch with me regularly in the interests of both our countries. He, our excellent ambassador Ian Sloane, and Mr. Sloane's wife helped to make the president's visit such a success.
  It is unfortunate that so little is heard here of Mongolia, because its performance in recent years has been truly remarkable. It was the first satellite of the Soviet Union, and was for 70 years among the most faithful followers of the twists and turns of Soviet politics. Yet it was the

  269
  first Asian country to throw off the yoke of communism and the shackles of central planning, to embrace the principles of democracy and establish an open market economy.
  Mongolia was, under communist rule, one of the most isolated countries in the world. It is landlocked, bordered only by the Soviet Union and China, and its economy was linked only to those of Soviet bloc countries. The economic legacy of the Soviet years was to set back development of Mongolia's traditional pastoral nomadism and create ill-suited industry aimed at supplying only Soviet needs.
  Energy supply in one of the earth's harshest climates was, and remains, inadequate. Communications are poor. Socially, the Soviets provided education, health and social services, which Mongolia, with a GDP per capita of less than $350 per annum, cannot sustain. Its natural resources remain to a large extent untapped. The geography of Mongolia hampers communications with the outside world. Information technology is only just beginning to make an impact, and thus the international community still knows little about the country.
  That means that the courageous and determined Mongolian people have not hitherto received the credit and attention that they merit. Next month, they go to the polls to elect a Parliament freely for the second time since the collapse of communism in their country. It is important that Mongolia should continue successfully along that path, not just for the good of the Mongolian people but because a successful Mongolia, despite numerous obstacles, can be an example to other countries in the region.
  Mongolia deserves our support. We can therefore take some modest pride in the fact that the Mongolian parties are looking to our own political parties for advice and support. I know that, with the backing of the Westminster Foundation for Democracy, some support has already been forthcoming; I also know that Mongolia's Parliament, the State Great Hural, has extended an invitation to the British-Mongolian parliamentary group to visit the country. If such a visit were possible, I am confident that it would be very well received in Mongolia.
  Progress in introducing democracy to Mongolia has been impressive, and the efforts to rebuild the economy following the end of Soviet aid have been even more so. The collapse of the Soviet Union meant a loss to Mongolia of subsidies estimated at some 30 per cent. of gross domestic product.
  This enormous country, with its small population— graphically and accurately described by my hon. Friend— decrepit infrastructure, lack of managerial know-how and meagre financial resources, faces many obstacles, particularly in its bid to achieve self-sustaining economic growth. As a landlocked country, it is entirely dependent on the good will of its two large neighbours for trade and communication links. But, with admirable self-discipline, the Mongolians have followed closely the advice of both the International Monetary Fund and the World bank. As a result, positive economic growth was restored in 1994, and last year growth increased to an impressive 6.3 per cent.
  The prospects for this year were brighter still, but the recent widespread fires—to which my hon. Friend referred at the end of his speech—have caused considerable damage, and have been a bitter setback to
  270
  Mongolia's recovery efforts. It is not yet clear that the worst of the fires are over. They have taken a terrible physical toll: the environment has suffered enormous damage, with perhaps a quarter of the forest cover destroyed, and the long-term damage to Mongolia's recovery will be severe. Britain was one of the first countries to respond to Mongolia's requests for international help in fighting the fires, and our contribution, although small, has been one of the largest to date. We stand ready to consider further requests for assistance.
  President Ochirbat's visit last month demonstrated the warmth of our bilateral relations. They have never been better. We were the first western country to establish diplomatic relations with Mongolia, in 1961, and to open a resident embassy in Ulaanbaatar, in 1963. The Mongolians have not forgotten that, or the signal that it sends of our support for their independence.
  The cultural links established through some of our universities go back at least as far, and were recognised by the President, who visited Leeds university while he was here. Indeed, there is a link between Ulaanbaatar and the city of Leeds, strengthened this year by both the President's visit and that of the Lord Mayor of Leeds to Mongolia.
  We have also made a significant contribution to helping Mongolia in its transition. Through our bilateral aid programme, we have provided about £3 million of assistance since 1992. The European Union provides around 8 million ecu each year, of which we contribute almost one fifth.
  British support does not come just from the Government. Despite the problems of distance and difficulty of supply, some British companies have entered into joint ventures, and others have won contracts under multilateral aid arrangements. Investment by OECD countries is still very modest, but Britain is among the leaders. British aid agencies, such as the Save the Children Fund and Voluntary Service Overseas, are performing heroic work in Mongolia in helping to tackle poverty.
  One effect of the Soviet era was to create a climate of aid dependency in Mongolia. One of the aims of British aid, whether bilateral, through the European Union or through the multilateral aid donors, is to encourage Mongolia into a can-do attitude. Our efforts are therefore aimed at giving the Mongolians the skills and knowledge need to use their own resources, manage their economy and enhance their position on the international stage.
  Mongolia's needs are great, and Britain's contribution is targeted on the areas where the Mongolians have themselves told us it is most valuable. They recognise that a key to success in the modern world is the English language, and that is one area in which they are especially keen to have help from us. It is natural that we should give such help, and it is a particular focus of attention in our bilateral aid programme.
  We have already provided English language teachers and BBC English programmes for Mongolian television, and we will continue to provide support for specialist English language teaching, while Foreign Office and Overseas Development Administration scholarships enable some of the brightest Mongolians to come to Britain for further study.

  271
  We help in many other ways. In view of the importance of livestock to Mongolia's economy, we have donated remote sensing equipment to enable herds and grazing patterns to be more effectively monitored. The Ministry of Agriculture is now arranging extra training in the use of that equipment, as well as considering ways of helping to develop horticulture. Mongolia has a young population and cannot meet all its educational needs, but, in co-operation with the Save the Children Fund and within the framework of the Mongolian Government's own plans, we are helping to strengthen its pre-school system.
  My hon. Friend raised the question of extending the know-how fund to Mongolia. Indeed, he recently wrote to my right hon. and learned Friend the Foreign Secretary about the issue. Unlike the countries of central and eastern Europe and the former Soviet Union, which receive technical assistance from us through the know-how fund, Mongolia has its own bilateral aid programme. That reflects the particular pressing needs it faced at the time when the aid programme was established.
  Mongolia was badly hit by the break-up of the Soviet Union. In particular, the need to pay for imports in hard currency rather than transferable roubles soon exhausted its foreign exchange reserves. Whereas all our aid to the other former Soviet bloc countries has been in the form of technical assistance, the bulk of our recent aid to Mongolia has therefore been in the direct provision of badly needed lubricants for Mongolia's industries, the purchase of which would otherwise have been a severe drain on its very limited foreign exchange.
  However, as Mongolia's economy has turned round, so its needs are changing. Our bilateral programme will seek to provide assistance in areas where it is most needed. While the financial constraints on our aid programme limit our ability to increase our assistance, our technical co-operation programme will continue.
  The Mongolians have also asked us to resume export credit guarantee cover. We are at present reviewing our position on that, although our decision will have to take account of Mongolia's arrangements with the IMF. Following the latest meeting of the Round Table and President Ochirbat's visit, we are also considering other ways in which we can help.
  The President kindly invited me to visit Ulaanbaatar, and I intend to do so before too long. That will enable me to see for myself the challenges that Mongolia faces, and to discuss with its leaders ways in which we may help. I know that concern has been expressed about the future of
  272
  Mongolian studies at British universities. We are conscious of the long and proud tradition of those studies, and are investigating, as a matter of priority, ways in which to ensure that they can be maintained.
  Mongolia deserves our support and encouragement for the democratic and economic reforms that it is pursuing. We have helped, and will continue to help, Mongolia in the widest possible way within the available resources. We hope that other countries will join us in doing that, and in encouraging Mongolia to play a full role in the international community. We look forward in the near future to welcoming it to membership of the World Trade Organisation.
  We are pleased that our support is being reflected by an upsurge in Mongolian interest in Britain. The number of Mongolians wishing to visit Britain to study, make contact with our institutions, learn our way of doing things or just look around continues to grow. The Mongolians see their country as small and somewhat vulnerable, and therefore value the presence of our embassy in Ulaanbaatar.
  To cope with the growing interest, we are extending our embassy there. Given the extreme harshness of the Mongolian winter—which prevents any outdoor building work for about two thirds of the year—and the absence of suitable equipment and materials locally, even such a seemingly modest activity becomes a major task; and the fact that we are performing that task should be seen as a sign of our strong commitment to Mongolia. My hon. Friend will understand why do-it-yourself is one of the talents required of our ambassador in Ulaanbaatar.
  It is in the interests of the world at large for Mongolia to remain an independent, democratic state with its unique culture and contribution. Our diplomatic presence, our continuing aid—both bilateral and through the international financial institutions—and our modest but growing trade and investment, as well as the realisation by some British travellers that Mongolia is really worth visiting, are all symptoms of a healthy and developing relationship.
  It being Two o' clock, the motion for the Adjournment of the House lapsed, without Question put.
  Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o' clock.

PRIVATE BUSINESS
  KING'S COLLEGE LONDON BILL [Lords]
  To be read a Second time upon Thursday 6 June.
Oral Answers to Questions
  EDUCATION AND EMPLOYMENT

    Training Opportunities
    Mrs. Bridget Prentice: To ask the Secretary of State for Education and Employment what proposals she has to extend training opportunities for unemployed 18 to 25-year-olds. [29089]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. James Paice): TheDepartment will continue to offer and support a wide range of opportunities for unemployed 18 to 25-year-olds, including specialist provision for those requiring basic skills training.
    Mrs. Prentice: Is the Minister aware that that is the one group for whom unemployment has risen in the past few years? What does he have to say to young people in my constituency, where long-term unemployment has risen by a staggering 64 per cent? Is it not the case that they really are the lost generation, whose hopes and aspirations will never be achieved under this Government because, for them, it is still hurting and they are still not working?
    Mr. Paice: I congratulate the hon. Lady on being able to read—obviously education does work for some. We are used to the Opposition twisting statistics, but it is relatively unusual to present statistics that are downright untrue. That age group has enjoyed a 10 per cent. fall in unemployment in the past 12 months, and a drop of 36 per cent. since the peak. It is an important group. That is why the Government give it special priority and access to our training programmes. Incidentally, the hon. Lady might like to take the matter up with the hon. Member for Makerfield (Mr. McCartney), who criticised the Government only this February for giving that group priority.
    Mr. John Marshall: Does my hon. Friend agree that unemployment among 18 to 25-year-olds would be adversely affected by the introduction of the national minimum wage? Does he also agree that the problems of that group have been exacerbated by the failure of our education system, sometimes, to send them from school with the basics of reading, writing and arithmetic and that that problem was created by the late and unlamented Inner London education authority?
    Mr. Paice: My hon. Friend is right to point out that, where it exists—we must never ignore the fact that young people are still looking for work, and we are trying to help them—much of that unemployment stems from a lack of adequate education. That is why the Government have carried out many reforms, which my hon. Friend has rightly supported, and it is why we are carrying out further reforms as a result of the Dealing report to ensure that all those young people have access to the right education, through compulsory schooling and beyond, to equip them for the workplace.
    Mr. Byers: The Minister speaks of figures. Is he aware that one in four of 18 to 24-year-olds in his constituency is out of work? Does he agree that special measures are needed to help that age group because the training needs of 20-year-olds differ from those of 40-year-olds? When will action replace neglect? Is not it time that the Government brought hope to the lost generation of young people by providing them with the training opportunities that they need to improve their prospects of finding employment?
    Mr. Paice: The hon. Gentleman represents the lost generation of Labour Members who will never be Ministers. The training for work programme is flexible enough to respond to the needs of individuals. It is not a question of laying something down for 40-year-olds or for 20-year-olds; it is a flexible programme that can be adapted by the training provider to meet an individual's needs. If the hon. Gentleman cares about this age group, how can he support policies such as the minimum wage, the social chapter and the withdrawal of child benefit, all of which would destroy opportunities for advancement?
    Dr. Spink: Will my hon. Friend confirm that more than 100 18 to 24-year-olds in my constituency would lose their jobs if the Government were to adopt a national minimum wage and we were to suffer the same level of youth unemployment as France—28 per cent? Even more young people would lose their jobs if we suffered the same level of youth unemployment—38 per cent.—as Spain, which also has a minimum wage. How many training for work, youth training and modern apprenticeship places have been provided by the Government for the coming year?
    Mr. Paice: About 250,000 youth training places will be provided in the coming year and 60,000-odd modern apprenticeships will be available. My hon. Friend is right; we need to consider the impact of the minimum wage not only in our constituencies but in those countries where one is practised. That is what is so staggering about Labour's policy. It knows what is happening in other European countries, and wants to copy their policies despite the fact that they would lead to far worse unemployment.

    Nursery Voucher Scheme
    Ms Quin: To ask the Secretary of State for Education and Employment what recent representations she has received about the nursery voucher scheme. [29092]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. Robin Squire): There have been a number of representations on all aspects of the nursery education voucher scheme.
    Ms Quin: Has the Minister had time to study the debate in the other place earlier this week in which, apart from the Minister, there was universal condemnation of the nursery voucher scheme? Is he aware that, in the Secretary of State's county, the scheme is described as "excessively bureaucratic"? Given the universal hostility to it, is it not time for a major Government rethink of nursery education provision?
    Mr. Squire: I look forward to reading the account of the debate in the other place. I always listen with care to what their Lordships say. When the hon. Lady refers to Norfolk, the county of my right hon. Friend the Secretary of State, she must recognise that the take-up of vouchers is now 96 per cent. which suggests that her allegations about bureaucracy are overstated. We are witnessing in phase 1, and in due course will see with the second phase across the country, an increase in the number of quality places. That should be good news for everyone.
    Mr. Pawsey: Does my hon. Friend accept that much misinformation is circulating about nursery vouchers? No doubt we shall hear some of it in later questions. Will he confirm that nursery vouchers will not damage existing local education authority provision, nursery education provision for three-year-olds or existing admission arrangements?
    Mr. Squire: I am grateful to my hon. Friend, who will remember that I have sought, in my modest way, to make public some of the myths and misconceptions that have been spread, especially by the Labour party. To take up two of his points, there is no reason why the education of three-year-olds should be affected. They are not covered by a deduction of local authority funding. Secondly, local authorities remain free to continue to spend, as most of them do, above the level of the voucher value because that money also is not affected.
    Mrs. Mahon: Whatever happened to choice? Has the Minister received representations from head teachers, teachers, parents, school governors and just about everyone involved in education, including Conservative councillors, in Halifax who want the right to keep their own, excellent, nursery education? Why do not they have the right to choose?
    Mr. Squire: It is surprising that the hon. Lady delivered her question without a trace of a smile, because it is quintessentially the existence of the voucher, which she and her hon. Friends object to, that is creating choice. Any parent, whether in her local authority area or others, who is satisfied with present local authority provision has simply to ensure that they take up that provision when the child is four. The voucher ensures that there will be greater choice throughout the country, and that, as I said a moment ago, should be good news. If the hon. Lady and her hon. Friends would listen to what is happening, they would be better informed.

    General Certificate of Secondary Education Examinations
    Mr. Booth: To ask the Secretary of State for Education and Employment what assessment she has made of the benefits of GCSE examinations and of their future. [29094]
    Mr. Paice: Since its introduction in 1988, the GCSE has been successful in raising the levels of performance and attainment of pupils of all abilities. The Government are committed to the GCSE as the principal means of assessing pupils at the age of 16.
    Mr. Booth: May I inform my hon. Friend that the question on the Order Paper was drafted by the customers of the education system—some children in one of the most excellent schools in north London?
    276
    As a result of the main question, and what I am about to ask, will my hon. Friend accept that Conservative policy for the GCSE is soundly based on an excellent curriculum and on a desire to train children and prepare them for life, whereas the policies of the Labour party are divided and dither over the curriculum and the GCSE? Neither attitude would prepare children for anything.
    Mr. Paice: My hon. Friend is right to identify the question as coming from the most important group of people—the customers, the young people who are undergoing our education system—and to demonstrate the Labour party's U-turns on education policy during the past few years. Labour Members have opposed every reform that we have introduced but, ultimately, they begin to welcome some. Labour Members criticise us for the poor results in tables. If they had had their way, we would not even have had those tables, from which we can work out the improvement that needs to be made.
    Mr. Barry Jones: Why are there no jobs for our school leavers?
    Mr. Paice: How dreary. The reality, as I said a few minutes ago, is that unemployment among young people has fallen substantially—by 10 per cent. in the past year and by 36 per cent. since the peak. There are more and more jobs for young people. What really matters is what Labour would put in the way of those jobs. The hon. Gentleman has been a Member of the House for a long while, and still he espouses policies that would destroy jobs for young people.

    Grammar Schools
    Mr. Dunn: To ask the Secretary of State for Education and Employment how many pupils are currently being educated in grammar schools. [29095]
    The Secretary of State for Education and Employment (Mrs. Gillian Shephard): Approximately 125,000 pupils are being taught in maintained grammar schools in England.
    Mr. Dunn: Is my right hon. Friend aware that many Conservative Members wish that the figure were 10 times that number? Many of us cannot forget that, in terms of educational provision, the inner city has become a nightmare for many of our young people because of the control and ideology of the Labour party. Labour has denied many young people a chance to have a real education in the inner city; that is why it is not fit to govern.
    Mrs. Shephard: As my hon. Friend knows, I intend to publish a White Paper in June which, among other things, will propose increased selection for those schools where parents, governors and heads wish it. In that way, we shall enable schools to build on their strengths, to establish distinctive identities and to increase choice and diversity. The hon. Member for Halifax (Mrs. Mahon) said it all: whatever happened to choice? We know what would happen to choice if the Labour party ever formed a Government: it would be abolished.
    Mr. Hardy: Will the Minister confirm the Government's support for comprehensive schools? Is she aware that, over the years, many thousands of youngsters from comprehensive schools have gone on to considerable achievement? Those students would have been unable to pursue such opportunities had selection continued. Is she aware that the Government appear to be moving backwards, and against the comprehensive principle, in support of the selection principle, which has served this country badly?
    Mrs. Shephard: The Government believe in a broad spectrum of schools in the maintained sector, and that is what our policies have achieved. We have grant-maintained schools, LEA schools, grammar schools, non-selective schools, specialist schools and colleges, city technology colleges and Church schools. Labour Members seem to be opposed to such diversity. It seems that they would seek to march forward to the 1960s and impose only one kind of school on everyone—but for a few of their Front-Bench team.
    Sir Patrick Cormack: How many pupils are currently being taught English grammar? Would not the level of spoken and written English in this country go up appreciably if the old grammar school standards applied throughout the country?
    Mrs. Shephard: All pupils in our schools are currently being taught English grammar. Their achievement is regularly inspected and examined. They are tested at the ages of seven, 11 and 14. I know that my hon. Friend has high standards in these matters. He always expresses himself admirably. It will take a little time before all our pupils reach his standard, but we intend to get there.

    Nursery Voucher Scheme
    Mr. Win Griffiths: To ask the Secretary of State for Education and Employment what proportion of providers participating in the pilot phase of the nursery voucher scheme have not previously accepted four-year-olds. [29096]
    Mr. Robin Squire: Forty private and voluntary sector providers did not have four-year-olds on roll at the time of applying to join the nursery voucher scheme but had the capacity to provide for them.
    Mr. Griffiths: The Minister has not told me what proportion of providers that is—I will assume that it is minute. Does it not show that the nursery voucher scheme is a vast waste of money on administration and bureaucracy? In relation to the pilot schemes, more than 25 per cent. more places could have been provided if the money had been given to local authorities.
    Mr. Squire: I cannot give the hon. Gentleman the exact proportion that he seeks because I do not have that information. There are new providers in the private and voluntary sector, and I should have thought that he would welcome that, particularly as he knows—he is a member of the relevant Standing Committee—that checks are being built in to ensure high standards. As for his comment about money being wasted on bureaucracy, he should also know from his Standing Committee
    278
    membership that, of the £20 million that is estimated to cover the operation, administration and inspection of the scheme next year, the vast proportion will be spent on inspection. I should have thought that he would join me in welcoming the fact that all providers will be inspected.
    Mr. Congdon: Does my hon. Friend agree that the nursery voucher scheme is the only means of ensuring a diversity of choice for parents in nursery provision? Does he agree that without the scheme, the only choice parents would have would be between LEA provision and nothing?
    Mr. Squire: My hon. Friend is absolutely right. He will know that we are awaiting precise details of any Opposition proposals. Despite the passage of legislation through the House, we still await that information. There is no doubt that the voucher gives parents a greater say than does the present system, and it should be welcomed on that ground alone.

    Teacher Training (Science Graduates)
    Mr. Gunnell: To ask the Secretary of State for Education and Employment what plans she has to increase the number of applications from science graduates for training for teaching; and if she will make a statement. [29097]
    The Minister of State, Department for Education and Employment (Mr. Eric Forth): We have introduced a priority subject recruitment scheme, being run by the Teacher Training Agency, which should attract more good students to train as teachers in key subjects such as science. The TTA's other promotional activities also place particular emphasis on science.
    Mr. Gunnell: Does the Minister believe that the Teacher Training Agency will reach its target of training 3,700 science graduates as teachers this year? Does he believe that there will be more science teachers in the classroom next year, taking into account those who will be promoted out of the classroom, retire, change careers or leave the profession because of disillusionment? Are we not facing a crisis in science teaching in schools, which is due in part to disillusionment with the Government as a result of their lowering teachers' status over the years?
    Mr. Forth: That hysterical outburst—[Laughter.]—is uncharacteristic of the hon. Gentleman. I am told that there are 46 vacancies nationwide for physics, chemistry, biology and other science teachers, which does not suggest a crisis of the proportions implied by the hon. Gentleman. However, the Department and I share his concern to do everything that we can to guarantee the future supply of science teachers and to strengthen the teaching of science in schools. The Teacher Training Agency is doing several different things in that area. For example, it is considering how it might develop the licensed teacher scheme to attract mature applicants to science teaching. I hope that the hon. Gentleman agrees that that is an imaginative approach that could bear fruit. The School Teachers Review Body will also examine the question of the supply of science teachers when undertaking its annual consideration of pay skills. Those

    279
    and the other measures that have been implemented will ensure that there is no worsening of the current position of only 46 vacancies nationwide.
    Mr. Butcher: The problem is that most of the time that graduates spend in teacher training college is a complete waste. Although we have introduced measures to test pupils and the level of output in schools, should we not also consider introducing a core curriculum for teachers, particularly for junior and infant trainee teachers, in numeracy and literacy? Graduates should be taught not simply what to teach, but how to teach it. Recent studies have highlighted tragic levels of illiteracy among young people in our inner cities which are caused by poor teachers who do not know how to teach—and who have not been trained to teach—reading.
    Mr. Forth: My hon. Friend, characteristically, puts his finger on a very important point. An important part of the remit of the Teacher Training Agency, working with the Office for Standards in Education—which is helping us increasingly to understand some of the problems that my hon. Friend has highlighted—is to provide the information that we need to quantify the nature of the problem and to go ahead and deal with it.
    My hon. Friend is absolutely right; we must ensure that teachers and those who are in teacher training have the tools that they need to do the job properly. As well as helping us to identify problems in schools and with pupils in the classroom, Ofsted is working to identify the needs of teachers. The Teacher Training Agency can then bring about the necessary improvements in that area.
    Mr. Bryan Davies: I ask the Minister, calmly and without hysteria, whether he agrees that, to safeguard the number of teachers of science in the future, we must take seriously the Dearing proposals to broaden the post-16 curriculum. We must ensure that more students continue to study science beyond the age of 16 and are well prepared to enter higher education to study that subject.
    Mr. Forth: I agree completely with the hon. Gentleman's constructive point. The whole thrust for some years—starting with the national curriculum—has been to ensure that all pupils not only gain a grasp of science, but develop an enthusiasm for it from an early age. We hope and expect that more children will want to continue their science studies in secondary school and beyond. The basic curriculum, Sir Ron Dearing's work to develop it post-16 and developments beyond that are designed to achieve that objective, among others. I am happy to share the objectives that the hon. Gentleman sketched.

    Deregulation
    Mr. Steen: To ask the Secretary of State for Education and Employment what measures she is taking to promote deregulation in respect of education and employment. [29098]
    Mr. Forth: We will continue to resist the imposition of unnecessary burdens on employers, such as the social chapter and a national minimum wage, which have contributed to unemployment averaging 11 per cent. throughout the European Union.
    Mr. Steen: Although the Secretary of State gets high marks in her end-of-term report for effort and achievement, I hope that she agrees that her performance on deregulation requires a little more attention. Only six paragraphs in a 250-page report on education and employment covered deregulation. Will my right hon. Friend have a word with all her Ministers and find new initiatives to help to support the Prime Minister's excellent initiative to deregulate faster, quicker and better?
    Mr. Forth: I pay tribute to my right hon. Friend's unremitting efforts to ensure that the Government's stated objective of deregulation is adhered to and thoroughly prosecuted in every Department. My right hon. Friend the Secretary of State watches tirelessly over her team of Ministers to ensure that they share in that objective. I hope that my hon. Friend accepts that we have done rather well over the years in creating a deregulated labour market— which is reflected in our performance in employment and unemployment compared with our European partners in particular.
    As to education, I suspect that we are bound in many ways to be a regulating Department—precisely because we are responsible for the well-being of so many young people in achieving a successful education. I could read out examples of some of the regulations that have been produced by my Department over the past year, but I shall not—I shall share them with my hon. Friend later. We make every reasonable effort to reduce regulation in education, but that must be balanced against our duty to protect standards and the well-being of pupils.
    Mr. Corbett: I presume that the Minister and the Secretary of State are seeking to expand selective and divisive grammar school education under the dogmatic banner of deregulation. Is not it the case that if every town is to have a grammar school, there will be many more secondary modern schools? Is not it also the case that picking winners
    "means plenty of losers as well"?
    Will the Minister confirm that those words came from Mr. Demitri Coryton, who chaired the Conservative Education Association?
    Mr. Forth: Only the hon. Gentleman's twisted logic would have led him in the direction that he seeks to take the House. I suspect that he raised the matter in that way because he has hit upon one of the few areas— education—in which the Labour party seems to have any policy, and that is to do away with selection and choice. That is one of the few things of which we can be certain in respect of Labour's education policy—no selection and no choice. Everything else is either a pale shadow of Government policies or under review.
    Mr. Sykes: When the Minister next goes to the Council of Ministers—if he does—will he try to have a Europewide ban imposed on the 48-hour week, which has been scientifically proven to destroy jobs in Europe?
    Mr. Forth: My hon. Friend has hit on a truth that has been obvious to us for some time but which we have as yet been unable to persuade our EU partners to see. It is that if we arbitrarily interfere in the working of the labour

    281
    market in the way my hon. Friend describes, the almost certain result will be a loss of jobs and competitiveness in the EU market as compared with our global competitors. We understand that; it is why we are enjoying a period of success in the creation of jobs and a reduction of unemployment. I fear that if our partners cannot and will not see that truth, they will drag themselves down competitively, and ultimately they will drag us down too.
    Mr. Meacher: If the Minister thinks that deregulation has been so successful why, since 1980, for every job created in Britain 17 have been created in France and 52 in Germany, yet neither France nor Germany has a deregulated labour market and both have a national minimum wage? If deregulation has been such a success, why were more jobs created in Britain in the regulated 1970s than have been in the deregulated 1990s? Why are there now 1 million fewer jobs in Britain than there were the day the Prime Minister took office? Is it not obvious that deregulation is simply a passport to short-term, hire-and-fire job insecurity, whereas what is really needed is long-term investment and commitment?
    Mr. Forth: Something that has puzzled me for the past few days has suddenly become clear. This is the same hon. Gentleman who was recently quoted as demanding the restoration of the old trade union powers of the 1970s—a period to which he now looks back with such nostalgia. He, one of the Labour party's prominent speakers on the subject, wants us to go back to the 1970s and all that they meant. Whereas I used to think that the Labour party had very few policies, I can now see that this is one area on which its policies are developing under the hon. Gentleman's influence.

    Teaching Standards
    Sir Fergus Montgomery: To ask the Secretary of State for Education and Employment what measures she proposes to improve teaching standards in schools. [29099]
    Mrs. Gillian Shephard: We have introduced a wide range of measures, from professional qualifications for head teachers to in-depth reform of initial and in-service teacher training.
    Sir Fergus Montgomery: Will my right hon. Friend confirm that the recent Ofsted report on reading showed that it is not funding or class size that determines educational success, but the quality of teaching in our schools? Does she welcome the new teacher training rules, which will concentrate far more on classroom experience?
    Mrs. Shephard: Yes, the recent Ofsted report on standards of reading in Islington, Tower Hamlets and Southwark raised serious doubts about the quality of the teaching methods used, about in-service training and about the role of head teachers. It is sad that the initial reaction of those responsible was to accuse the report of political bias, instead of expressing concern for the education of the children in their care. Obviously, in-service training of teachers is important; but just as
    282
    important is initial teacher training—my hon. Friend is right about that—and inspections of initial teacher training by Ofsted are revealing some interesting results.
    Mr. Don Foster: Does the Secretary of State accept that there is little point in raising teaching standards if children are encouraged to miss school? If so, does she share my concern about the material sent out by the School Curriculum and Assessment Authority for this year's key stage 2 standard assessment tasks reading test? In it, children are encouraged to follow the wrong example in a passage in which Uncle Jim persuades mum to allow the children to miss school so as to go for a ride in his shiny new motor car.
    Mrs. Shephard: That sounds like a description of Liberal education policy.
    Mr. Key: Does my right hon. Friend agree that we could make a good start to raising teaching standards by saying thank you to the tens of thousands of teachers who, with professionalism and dedication, do so well in our schools? While we are at it, why not say thank you to them for teaching the hundreds of thousands of children who are about to sit their public examinations—including my daughter Sophie?
    Mrs. Shephard: I am delighted to hear that news from my hon. Friend. Of course we owe a debt—as does society—to successful, committed teachers. It is indeed a shame that occasionally they are let down by local education authorities that seek to make excuses for them instead of helping them to achieve more.
    Mr. Blunkett: Perhaps the Secretary of State will agree that one advantage of Uncle Jim's car is that, by taking a child out of the classroom, it improves the pupil:teacher ratio? Is it not a scandal that yesterday's figures revealed a further worsening of the pupil:teacher ratio and that, in an enlightened moment, the chief inspector of schools said in his annual report that small class sizes are of benefit in the early years of primary education? Will she therefore apologise to teachers and parents throughout the country for what has just been revealed—that, for the first time, more than 40 per cent. of our primary schools have classes of over 30, that classes of over 40 have risen by almost 50 per cent. since the Government took office and that we now have 1.6 million children in those excessively large classes, making it difficult to teach the basics that are the essential tools of raising standards?
    Mrs. Shephard: Provisional figures on teacher numbers show that the position is largely unchanged. I remind the hon. Gentleman and his hon. Friends that there is no clear connection between class size and achievement in the classroom, as has been confirmed repeatedly by the chief inspector of schools. I further remind the hon. Gentleman that in Labour-controlled Hackney there was one teacher for every eight pupils, yet the education provided was so deplorable that the school had to be closed. We heard not a word of condemnation from Opposition Members of that disgraceful state of affairs.
    Mr. Hawkins: Does my right hon. Friend agree that parents recognise that the Government have ensured that teaching standards in schools have improved? Would she

    283
    be surprised to hear that Labour's education policy has been condemned by a former teacher, who recently became the chair of the new Blackpool Labour local government committee, as a "Conservative copycat document" and said that most left-wing teachers agreed with her. Is that not another example of splits within the Labour party on education?
    Mrs. Shephard: That is indeed interesting news from Blackpool. Of course parents are well aware that Opposition Members have spent much of the past decade or so automatically opposing every measure that the Government have introduced to improve standards and, sadly, for many parents that legacy lives on in Labour town halls up and down the country. Examples include Islington, where GCSE results are the worst in the country, Tower Hamlets, which has the worst truancy, and Labour-controlled Nottinghamshire, where 11-year-olds were the only ones in the country who were not allowed to take national tests last year.

    Access Initiative
    Mr. Steinberg: To ask the Secretary of State for Education and Employment what assessment she has made of the success of the access initiative; and what provisions have been made for its continued funding. [29100]
    The Parliamentary Under-Secretary of State for Education and Employment (Mrs. Cheryl Gillan):Some 800 mainstream schools will benefit from schools access initiative projects in 1996–97 to improve access to the curriculum for disabled pupils. We shall consider shortly the position for 1997–98.
    Mr. Steinberg: I thank the Minister and congratulate the Government on introducing the access initiative with the National Union of Teachers and Scope, which initiated it. Has the Minister analysed the scheme in depth? Does she know in which schools the money was spent? Does she know how the money was spent and whether the projects were successful? If she has not carried out a careful analysis of the scheme, will she undertake to arrange for the Department to do so? Will she give the House a guarantee that the scheme will continue and that money will be put into local education authorities so that more schools can benefit from the access initiative?
    Mrs. Gillan: I thank the hon. Gentleman for his kind congratulations, which I accept on behalf of the Government. We have put almost £10 million into the schools access initiative, which will help to provide better access for disabled pupils. Under the Education Act 1993, schools must report every two years on their access arrangements. In 1995, an audit showed that disabled access varies widely from area to area. That is why we have put money into the initiative. We shall carry out another audit in 1997, which we expect to show increased accessibility.

    Nursery Voucher Scheme
    Mr. Chris Davies: To ask the Secretary of State for Education and Employment what provisions have been made to restrict the profits that can be made by Capita for administration of the nursery voucher scheme. [29101]
    Mrs. Gillan: Capita Managed Services Ltd. was awarded the contract to administer phase 1 of the nursery education voucher scheme through a competitive tender. That process ensures that the successful contactor offers the best value for money.
    Mr. Davies: Does the Minister accept that head teachers in my constituency are concerned that public funds will go to private profits, while nursery provision in their schools faces the threat of disruption as a result of the introduction of vouchers next year? Does she accept that it is important that every three and four-year-old in this country has the opportunity of nursery provision? That will cost a great deal of money. Instead of gimmicks such as the scheme, would it not be better to ensure that proper provision is made through education authorities, funded, if necessary, by general taxation?
    Mrs. Gillan: I am ashamed that Opposition Members have still not grasped the fact that the nursery voucher scheme is proving a great success. At every stage, the Opposition have tried to cast doubt on the scheme because they have nothing better to put in its place. Capita has successfully implemented phase 1 of the scheme. In fact, a report produced by the National Childrens Bureau, which was published in March, said:
    "All four authorities felt their relationship with Capita was good. When problems had arisen, they had been solved. When mistakes were made, they had been put right quickly."
    There is certainly no need to impose a restriction on profits, since the competitive tendering process ensures that profits are not excessive.
    Mr. Harry Greenway: Are not all parents and children aware of what is value for money and sound education? All concerned will be watching. Should we not remember that children are as diverse between the ages of three to five as they are at any later age? The diverse provision that the nursery education voucher scheme will inspire will therefore be valuable. If primary schools continue to attract children to their nurseries as they do now, they will lose nothing.
    Mrs. Gillan: My hon. Friend is absolutely right. The voucher scheme pursues our policy of choice and diversity in all areas of education. The contractor for phase 1 was chosen specifically on the value for money and quality of services offered. The quality of Capita's proposals exceeded those of the other shortlisted candidates.
    Mr. Stevenson: Capita continues to cream off its profits, but is the Minister aware that my constituents are concerned about the madcap scheme? If the Minister is serious in her projection that more nursery places will be available as a result of the scheme, will she give my constituents some assessment of how many extra places will be provided in Stoke-on-Trent and Staffordshire? Is not the scheme another bureaucratic, expensive and Government-inspired education red herring?
    Mrs. Gillan: The hon. Gentleman must do his homework before he comes into this classroom. There are already 300 extra places in the phase 1 areas. I am really rather tired, as I am sure is the House, of the Opposition continually trying to cast slurs on Capita. The Capita

    285
    group is the largest provider of managed services to the public sector. It is used to working with local education authorities and is responsible particularly for the SIMS software package, which is used by more than half the LEAs. The Opposition just cannot stand the scheme proving to be a great success.

    Education Services (Inspection)
    Mrs. Lait: To ask the Secretary of State for Education and Employment what plans she has to set up a system of inspection of local education authorities in respect of their delivery of education services. [29102]
    Mr. Robin Squire: On 7 May, my right hon. Friend the Secretary of State announced that she would examine whether to extend Ofsted's powers to inspect local education authorities' monitoring and support services for schools. A voluntary LEA-Ofsted exercise is under way.
    Mrs. Lait: Will my hon. Friend try hard to pass on the message to my right hon. Friend that her visit to Hastings and Rye last Friday was much appreciated? She opened Filsham Valley school and saw the effectiveness of East Sussex education authority. Will he ensure that East Sussex is invited to participate in Ofsted's voluntary monitoring exercise so that we can see the increase in standards required to ensure that we improve our position in the tables from 80th for A-levels back to the top?
    Mr. Squire: I am delighted to hear that I can add Hastings to the parts of the country that have benefited from and welcomed a visit by my right hon. Friend on her travels around the country. On the substance of my hon. Friend's question, she is clearly right to recognise that local education authorities can play a significant role in helping schools to raise standards, not least through the quality of their advice and by, for example, encouraging schools to set challenging performance targets. I will certainly look at my hon. Friend's authority although, as she said, she referred to a voluntary activity. A couple of authorities are already involved and I hope that others will get involved in the near future.
    Mr. Madden: Who is responsible for inspecting Ofsted? Will the Minister confirm that it would be prudent for Ofsted to secure the services of inspectors before announcing inspections of schools? Does he remember that that was not done for the mass inspection of nine schools in my constituency? The inspections have been delayed by months, causing considerable anxiety and difficulty for the teaching staff and casting considerable doubt on the inspection reports, whenever they are received.
    Mr. Squire: I am sorry that the hon. Gentleman added the last part of his question; I would otherwise have some sympathy with the position that he described. It is, of course, regrettable when planned inspections do not take place. Although that applies to a relatively small proportion of all inspections, I join the hon. Gentleman in regretting it when it happens. I hope that he will join me in welcoming the fact that with well over 7,000 inspections completed since Ofsted was created, the net effect has been to drive up standards in our primary and secondary schools, to get heads and governing bodies to
    286
    look more than ever before at the standard of education that is delivered in their schools and, in places, to get them to make a significant improvement.

    School Standards
    Mr. Forman: To ask the Secretary of State for Education and Employment when she last met representatives of the Office for Standards in Education to discuss standards in schools. [29104]
    Mrs. Gillian Shephard: Ministers and officials regularly meet Her Majesty's chief inspector and Ofsted officials to discuss issues related to education standards in schools.
    Mr. Forman: When my right hon. Friend last had a chance to meet Mr. Christopher Woodhead, the chief inspector, was she made aware of the fact that he is a distinguished alumnus of Wallington county grammar school for boys in my constituency? He recently visited that school to open an excellent new science block containing four laboratories, which will be invaluable in raising standards of science and will thus set an example to all the good schools in my constituency.
    Mrs. Shephard: I was not aware that the chief inspector is a former pupil of Wallington county grammar school. He is certainly a very distinguished ex-pupil and I am delighted that the school is doing so well.
    Ms Estelle Morris: Is not the real problem in educational standards that the gap between the children who achieve and those who do not is growing wider and wider? Will the Secretary of State confirm that last year the number of young people leaving our schools with no qualifications at all rose to one in 12? Will she accept that that is a result of Government policies? The Government are prepared to give opportunities and resources to the few, but ignore the needs of the rest of the students.
    Mrs. Shephard: Of course there is always more to do on standards. I advise the hon. Lady to read carefully about Ofsted's work in the various reports that we have had this year. They make it absolutely clear that there is no simple correlation between resources and pupil achievement. I remind her—though not necessarily blame her, because she is a fairly new Member of Parliament— that we would not know anything about the performance of the education system had it been left to Labour Members, who opposed every measure that we put in place to measure it.
    Mr. Mans: Does my right hon. Friend agree that one sure way of reducing education standards in schools is by encouraging students to leave at the age of 16? Is not that exactly what would happen if new Labour's teenage tax was introduced—that every family with children would lose at least £560 every year?
    Mrs. Shephard: It is indeed extraordinary that the contribution of Labour Members to encouraging young people to stay on at school is to tax their parents.

    Schools (Writing Materials)
    Mr. Skinner: To ask the Secretary of State for Education and Employment what assessment she has made of the overall provision of writing materials in schools in the United Kingdom. [29105]
    Mr. Forth: We have provided an extra £774 million for education this year. The provision of writing materials, as for all resources in schools, is a matter for individual local authorities and for schools.
    Mr. Skinner: Have we reached the sorry state of affairs in our schools when literally thousands of schools are having to run jumble sales and all the rest of it to provide books and other materials? Is the Minister aware that in Tideswell in Derbyshire, for example, local firms now have to sponsor the supply of toilet paper for the school lavatory? Is he aware that some toddlers in Jamaica have clubbed together their pocket money to send pencils to kids in another school in Derbyshire? After 17 years of Tory rule, a third-world country is bailing out school kids in Britain.
    Mr. Forth: I am grateful to the hon. Gentleman for his typically reflective and considered question. Surely that is a classic example of the utter failure of Derbyshire local education authority to order its priorities so as to provide the most basic materials to its schools. I hope that the hon. Gentleman will go back to his constituency and stir up his constituents to demand that the local education authority reorders its priorities, stops spending money on such things as nuclear-free zones and gets some pencils into the classroom.
    Mr. Nicholas Winterton: Does my right hon. Friend accept that schools that have been given grant-maintained status are finding it extremely effective to manage their own affairs, and that in very few, if any, cases are there examples such as that quoted by the hon. Member for Bolsover (Mr. Skinner)? Has not grant-maintained status, in giving schools the opportunity to run themselves and manage their own budgets, been a great bonus? The examples of Kettleshulme St. James school and the Mottram St. Andrew junior school in my constituency— which have had to have extensions since they were granted grant-maintained status—prove what I have said.
    Mr. Forth: I readily pay tribute to the schools in my hon. Friend's constituency, which prove beyond peradventure his point about grant-maintained schools. When we allow schools to order their priorities, rarely if ever do they get into the type of difficulties alleged by the hon. Member for Bolsover (Mr. Skinner)—which must be laid squarely at the door of the local education authority for failing to provide enough money to its schools. By contrast, if we direct funds at grant-maintained schools and allow them to order their priorities, they have all the materials that they need in their classrooms.

    Secondary School League Tables
    Mr. Llwyd: To ask the Secretary of State for Education and Employment how many representations she has received in favour of the publication of secondary school league tables in the past 12 months; and if she will make a statement. [29106]
    Mrs. Gillan: We receive many representations on school performance tables. Research shows that more than three quarters of parents choosing a secondary school for their children support the publication of such information.
    Mr. Llwyd: I thank the Minister for that answer. Does not the Government's near obsession with league tables create a great deal of difficulty for those who are socially and perhaps also educationally deprived? Is this not a very divisive policy? Is the Minister aware of the recent concerns of the national association of therapeutic education, which stated that an ever increasing number of children have been marginalised from the mainstream system? Is not this truly a divisive policy that has no place in a civilised society?
    Mrs. Gillan: I do not agree with the hon. Gentleman. I am afraid that he will just have to get used to the idea that performance tables are here to stay. There are clear expectations among parents, students and the public that such information will continue to be provided. I cannot understand why some people wish to deny parents valuable information about their children's progress. Secondary performance tables inform choice, strengthen accountability and raise standards for 16 to 18-year-olds.
    Mr. Stephen: I welcome performance tables, but is it not remarkable that although the Government now provide more money per pupil than ever before in the nation's history, education results in so many parts of the country have been so poor? Could it be something to do with the fact that although central Government have to take the responsibility, education is delivered mainly by left-wing education authorities, which are more interested in social engineering than in education?
    Mrs. Gillan: My hon. Friend makes a valuable point. The purpose of performance tables is that they enable us to study the progress made in schools so that we can ascertain where performance needs to be improved. Indeed, we recently consulted on the 1996 tables, and decisions on the new basis of the tables with probably very minor changes will be made in June.
    Mr. O'Hara: Is not it a fact that crude league tables such as those supported by the Government are not only useless but possibly misleading if they ignore value added? They certainly do not help parents to make informed choices; indeed, they mislead parents into making uninformed choices. Does not the Minister recognise that, useful though league tables are, we must ensure that full information if provided to parents, as the Labour party has always advocated? Does she accept that if they do not provide full information, the tables proposed by the Government will be as useful as those that would put the Minister in the same league as Sally Gunnell for running a 440 yd hurdle race?
    Mrs. Gillan: As usual, the hon. Gentleman is way behind the debate. He should appreciate that, as I said, league tables are here to stay. The debate is not about whether tables should be published but about what information should be published and how. Independent research on league tables carried out by audience selection showed that more than half of parents of five to 16-year-olds thought it important to have

    289
    performance information. More than three quarters of parents choosing a secondary school, including some Opposition Front Benchers, support the publication of information in performance tables and find the tables helpful when making their choices. Opposition Front Benchers prove that with their choice of schools for their own children.

    School Leaving Age
    Mr. Michael Brown: To ask the Secretary of State for Education and Employment what plans she has to alter the school leaving age. [29108]
    Mr. Paice: None.
    Mr. Brown: Does my hon. Friend agree that the interests of children in my constituency of Cleethorpes who stay on at school after 16 will be severely harmed if the parental right to child benefit is removed?
    Mr. Paice: My hon. Friend follows other colleagues in pointing out the absurdity of the Labour party's recent proposal. Under this Government, if a young person of 16 decides to stay on at school to do a two-year A-level course, the parents continue to receive child benefit, which means about £1,000 going into the family household budget. Labour proposes to confiscate about £1,000 from every A-level student's family. How does Labour equate that with improving opportunities for young people?
    Mr. Ian McCartney: The Government are trying to reduce through the back door the school leaving age for tens of thousands of young children to as young as 13. Will the Minister confirm that his Department and the Department of Health have written to every employers' organisation in Britain, asking them to agree to a change in the law that would allow employers to employ children as young as 13 in place of adults for up to 20 hours per week during term time? That is despite the fact that, only four weeks ago, a company in the Prime Minister's constituency was fined £12,500 for employing children under the age of 14 in a factory. Will the Minister give a commitment to withdraw this slave labour proposal and ensure that children as young as 13 remain in school and are not employed by unscrupulous employers for £1 an hour or less?
    Mr. Paice: There is no proposal whatsoever that children should be taken out of school as slave labour, or for any of the other ridiculous assumptions that the hon. Gentleman made. The Government propose in a consultation document to float the idea that young children aged from 14 could spend up to one day a week either in the workplace or a further education college. [Interruption.] I am surprised that Opposition Members are barracking me, because there is very little difference between our proposal and what appears in Labour's own policy document, "Aiming Higher", which states:
    "Those who are significantly disaffected with the school system should be offered the opportunity to follow part of their studies in FE colleges".
    That is precisely along the lines that we are proposing.

Royal Assent
Madam Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

Non-Domestic Rating (Information) Act 1996

Reserve Forces Act 1996

National Health Service (Residual Liabilities) Act 1996

Police Act 1996

Industrial Tribunals Act 1996

Employment Rights Act 1996

Points of Order
3.31 pm
Mr. David Lidington: On a point of order, Madam Speaker. Is it in order for the House to summon to the Bar a British citizen who is also a European Commissioner, so that we can hold Commissioner Kinnock to account for the way in which he is seeking to undermine our efforts to lift the export ban on British beef?
Madam Speaker: There is no way in which the action that the hon. Gentleman suggests can take place.
Mr. Keith Mans: On a point of order, Madam Speaker. I seek your guidance on an event that took place during Question Time this afternoon. When the hon. Member for Oldham, West (Mr. Meacher) asked a question, I clearly saw the hon. Member for Hartlepool (Mr. Mandelson) standing next to your Chair to check on what the hon. Gentleman said. When, for once, the hon. Member for Oldham, West seemed to be in tune with new Labour, the hon. Member for Hartlepool slipped out without having the courtesy to listen to the Minister's reply. Is that in order?
Madam Speaker: I can see that it is time that the House went into recess and we all went home.
Mr. Barry Sheerman: On a point of order, Madam Speaker. Has any advance been made on the balance of education and employment questions? I know that the matter has been raised on previous occasions, but the imbalance between education and employment—and even within education—is apparent. For example, we had no opportunity today to talk about higher education, a vital part of the future of this country, which has suffered massive cuts in its budget which are affecting universities.
Madam Speaker: The hon. Gentleman and the House know that Question Time is operated on a ballot system. I noticed today that only two questions were related to employment matters—Questions 1 and 17. I hoped to reach the latter, but we were very slow today in getting through the Order Paper. I hope that hon. Members do better in future, and we may then be able to have a wide variety of questions that suit all hon. Members and all interests in the House.

Civil Service
[Relevant documents: The Fifth Report of the Treasury and Civil Service Committee of Session 1993–94 (House of Commons Paper No. 27–1) on the Role of the Civil Service, the Government's response, incorporated in The Civil Service: Taking forward Continuity and Change (Cm 2748), and Minutes of Evidence taken before the Public Service Committee on 16th January, 7th February and 28th February 1996 (House of Commons Papers Nos. 147, 213 and 265 of Session 1995–96).]
Madam Speaker: I have selected the amendment standing in the name of the Leader of the Opposition.
3.33 pm
The Chancellor of the Duchy of Lancaster (Mr. Roger Freeman): I beg to move,
That this House welcomes the Government's policies on the Civil Service, as set out in the White Papers 'Continuity and Change' and 'Taking Forward Continuity and Change', including the promulgation of the Civil Service Code from 1st January 1996, the establishment of the Senior Civil Service from 1st April 1996 and the strengthening of the role of the Civil Service Commissioners in maintaining the principles of fair and open competition and selection on merit in recruitment; also welcomes the Government's policy with regard to the privatisation of Recruitment and Assessment Services, with the proposed safeguards to protect the quality of Civil Service recruitment; and looks forward to the intended publication in July of a White Paper on training and development in the Civil Service, associated with the further development by the Civil Service College of a number of partnerships with the private sector which will enhance its status in the provision of courses for those working in the public and private sector.
The motion has been tabled to enable the House to consider the main elements of the Government's proposals for the civil service and to clarify some of our plans for its future development.
The motion is in three parts. The first concerns the latest developments following the White Papers "Continuity and Change" and "Taking Forward Continuity and Change", that is, the promulgation of the civil service code, the establishment of the senior civil service and the enhanced role of the civil service commissioners. The second part covers our intentions regarding the privatisation of Recruitment and Assessment Services, and the arrangements that are proposed to protect the quality of civil service recruitment. The agency is more commonly known by its acronym RAS. The third part relates to our forthcoming White Paper on training and development in the civil service, and the further development by the Civil Service College of partnerships with the private sector.
Mr. Alan Howarth: The Chancellor has identified the first two themes as "Continuity and Change" and privatisation. There is intense dismay about proposals relating to Horticulture Research International, a magnificent scientific research establishment in my constituency. Although it has been subjected to endless processes of reform and restructuring, especially during the 1980s, it has been allowed to stabilise since 1990, and has performed every task required of it to the highest standard. For reasons of empty ideology, however—this is really scraping the bottom of the barrel—its privatisation is now being proposed. Will the right hon. Gentleman use his influence to ensure that no such destructive act proceeds?
Mr. Freeman: I give the hon. Gentleman an undertaking that I shall look into the proposals in greater detail, and draw his comments to the attention of my right hon. Friends who are responsible for such matters.
Let me begin with the civil service code that came into force on 1 January this year. It sets out in a few paragraphs the constitutional framework of the civil service, and the values that every civil servant is expected to uphold. It forms part of the terms and conditions of employment of every civil servant, and considerable efforts have been made to publicise it, including steps intended to ensure that every civil servant has his or her own copy.
There are several reasons why the House should welcome the code's promulgation. Above all, its introduction has served powerfully to reaffirm the values that underpin the civil service, to which the Government remain committed. They are integrity, political impartiality, selection and promotion on merit and accountability to Parliament through Ministers.
Mrs. Gwyneth Dunwoody: I was pleased to hear the Chancellor enumerate those qualities. Can he tell us why—according to a book by David Butler—when it came to deciding the position relating to the poll tax, the permanent secretary involved was simply told, "This is in our political interest"? If that is the Government's attitude to the civil service, is it not surprising that we do not come up with more bizarre answers than we do now?
Mr. Freeman: It is very important for the civil service not only to act in the best interests of an independent service with full integrity, loyal to its political masters of the day, but to be seen to be able to serve Administrations of different political colours. That is the test: whether civil servants in any particular Department can continue through a change in Administration, and serve the new policies of an incoming Administration of whatever political colour.
The code does not assert any new values—it is not intended to—but the fact of its introduction has sent a clear signal about the importance that the traditional civil service values continue to have. Those values derive much of their day-to-day force from the fact that they command near-universal support. Thus general support for the code is clearly important, because the civil service is not the exclusive property of the Government of the day; it is a permanent and impartial service on which the Government of the day have, so to speak, the lease rather than the freehold. In other words, the civil service must command the confidence not only of the Government, but of potential future Administrations.
The code contains an important innovation. In addition to internal appeals procedures run by Departments, there is now a right of appeal to the independent civil service commissioners. Civil servants can now appeal when they believe that they are being required to act in a way which is illegal, improper or unethical, which breaches constitutional convention or a professional code, which may involve maladministration or which otherwise breaches the code or raises a fundamental issue of conscience.
Mr. John Garrett: Such an appeal, however, can be routed only through the head of the Department in which the civil servant works. The civil

295
servant must first make the point to that person. Therefore, there is a chance of retaliation against someone who protests about the illegal or improper activities of a senior civil servant or Minister, which is likely to be recorded on his or her personnel record.
Mr. Freeman: That is a gloomy and negative assessment. It is perfectly right and proper that, in the first place, the civil servant should have the responsibility of reporting his or her concern through the chain of command to the permanent secretary of the Department, but then there is an automatic and unamendable right of appeal to the civil service commissioners. That right can be exercised as quickly as the individual complaining deems appropriate. It is entirely appropriate that the permanent secretary of the Department should be aware of the concerns—concerns that are in some cases, perhaps, justifiably held by the individual—and should know of them first.
It is essential that the arrangements should be credible, and it is clear from our consultation last year that we have a provision that commands widespread confidence. As a succinct and widely available statement of the standards asked of civil servants, the code enables the public to know what they should expect of the civil service.
The creation of the senior civil service is another reform that has commanded widespread support. As the name implies, the senior civil service covers the senior staff—that is, former grades 1 to 5.
The White Papers, "Continuity and Change" and "Taking Forward Continuity and Change", set out the Government's broad objectives for the senior civil service, which came into being on 1 April.
The new senior civil servants have an important role to play in providing leadership, fostering a sense of unity and shared purpose and sustaining key civil service values at a time when most responsibilities are devolved to individual Departments and agencies.
Senior civil service staff will be managed by Departments within a broad common framework. That framework has a number of important new features. First, there are more flexible performance-related pay structures than existed before. That gives Departments more scope to pay people according to their individual circumstances, including the difficulty of their jobs, and to reward according to their individual contribution.
Secondly, we have cut out unnecessary jobs and hierarchies and abolished the old inflexible senior grading structure, which restricted Departments unnecessarily in settling the way in which they organised themselves. The resulting streamlining will lead to an overall reduction of well over 20 per cent. in the number of senior posts.
Thirdly, senior civil servants, like other senior managers, are moving on to personal, formal written contracts. Those set out more clearly than before, in writing, the terms and conditions of employment for senior civil servants, ensuring that people understand properly their rights and obligations.
Fourthly, we have developed a new senior appraisal system. It ensures that our senior performance management systems match best practice elsewhere in the public and private sectors.
296
Fifthly, we have increased the use of open competition for filling senior vacancies, both across Departments and more widely. So, in recent years, around 30 per cent. of vacancies at the top three levels of the civil service have been openly advertised outside the service, including, in the past year, six posts at permanent secretary level.
Mr. Robert Sheldon: Two factors concern me. The first is the performance-related pay of senior civil servants, who after all are closely allied to the thinking of the Government of the day. The performance-related pay might be related not just to their ability but to how far they satisfy certain political considerations, which is a serious matter. Secondly, on the fixed-term contracts, if we proceed along those lines, senior civil servants will be under even greater pressure. Those are matters that concern the House and anyone else who is concerned with good administration, and I wonder whether the right hon. Gentleman would care to reflect on them.
Mr. Freeman: It is important that performance pay— it is modest in relation to basic salary, and certainly in relation to what is paid in the private sector—is determined on merit and performance, not on political loyalty. Civil servants should have loyalty to their Ministers, but should not portray their political affiliations, nor should performance pay be in any way related to political favours that may or may not be deemed to have been performed. That is an extremely important principle. Performance pay is essentially determined by civil servants themselves—ultimately by the permanent secretary—and not by the Minister. It would not be appropriate if it were seen as a Minister giving rewards for political favours. That would be widely unpopular in the civil service and it would be wrong.
Mr. Bernard Jenkin: I apologise to my right hon. Friend for arriving a little late for his speech. On performance-related pay, how many senior civil servants leave the service early for the private sector? If we are losing a steady number, is that not an argument for more PRP—for making it more flexible and a bigger element of basic pay, so that we can appropriately reward civil servants who make the sacrifice of staying in public life and avoid losing the best talent to the private sector?
Mr. Freeman: My hon. Friend will agree that there has been a remarkable change in the level of civil service pay so that it is much more commensurate with private sector pay. There is no great desire, as there was a decade ago, to leave the service because of pay. Of course, there are civil servants whom we would like to retain who leave for substantially better-paid work, but I would not describe that as a main feature of the movement of civil servants out of the public sector.
We have lost, or will lose, up to 20 per cent. of the senior civil service in most Departments through restructuring and opening up and making more flexible the previously monolithic structure of some Departments. Some civil servants have taken well-earned early retirement, where some may pursue other jobs. Some have gone to the private sector. I do not have detailed figures. The introduction of PRP is appropriate in modern life, whether in the public or private sector, to reward not political loyalty but effort, achievement, leadership and efficiency.
Mr. Jenkin: Will my right hon. Friend give way?
Mr. Freeman: If my hon. Friend will allow it, I should like to make some progress. I have a fair amount to say, but I shall try to compress it in the interests of the debate.
We have committed ourselves to a renewed emphasis on developing talent. We want to equip our senior people and their potential successors so that they contribute effectively to their jobs and develop satisfying and well-planned careers to meet the Government's and the individual's aspirations. We have already announced our plans to publish a White Paper on that during the summer.
The senior civil service is now well suited to play a vital role both in maintaining traditional civil service values and in driving through necessary change. It will continue to provide clear-sighted and impartial policy advice to Government. It will continue to manage the delivery of a wide range of services to the private sector and the general public. However, it will do so in a way that leads to still greater efficiency and in accordance with the principles of the citizens charter, which will continue to raise standards of service to the customer across the whole of public service. We are confident that the senior civil service, like the wider civil service, will continue to be recognised as being among the world's best as we enter the next millennium. I was going to give way to my hon. Friend the Member for Colchester, North (Mr. Jenkin), but I see that he is talking to a higher authority.
I shall now deal with the enhanced role of the civil service commissioners, brought into effect by the continuity and change White Papers. The commissioners' primary role is to maintain the key principles of fair and open competition and of selection on merit in relation to recruitment to the civil service. The Government have made clear their commitment to those key principles, but we have gone further than lip service: we have strengthened the commissioners' independence and powers in relation to the regulatory framework for civil service recruitment, to ensure that the key principles are upheld in practice.
The main enhancements to the role of the commissioners were summarised in the White Paper "Taking Forward Continuity and Change". The civil service commissioners became responsible for the interpretation of the principle of fair and open competition on merit for all civil service recruitment, not only for the most senior recruitment. They have issued a simple but binding recruitment code for Departments and agencies, to replace the former Minister's rules. They audit Departments' and agencies' recruitment systems against the requirements of the recruitment code. They publish an annual report. Their report for 1995–96, the first to cover their enhanced responsibilities, will be published shortly.
The commissioners continue to approve each appointment from outside the civil service to the new senior civil service and to take a direct part in senior competitions.
Dr. Robert Spink: Will the Government consider further extending the role of the civil service commissioners beyond examining recruitment across the range of civil service employees?
Mr. Freeman: That is a novel idea, on which I should like to reflect. I suspect that my hon. Friend is suggesting an extension of the commissioners' role in relation to those who are not technically civil servants but who serve in the public sector. Perhaps my hon. Friend will be able to develop that argument during the debate. It is an interesting idea, but the commissioners' role is, as their name implies, currently restricted to the civil service.
Mr. A. J. Beith: I hope that the Minister responds sympathetically to the hon. Member for Castle Point (Dr. Spink), because there is a wide area of the public service to which the experience of the Office of the Civil Service Commissioners could be extended if it had wider public service responsibilities—quangos, and the inspectorate of education, whose staff are Crown servants but not civil servants, to name only two examples.
Mr. Freeman: I understand that one of our main daily newspapers describes contributions to debates by the right hon. Member for Bishop Auckland (Mr. Foster) and myself as sleep-inducing and boring. [HON. MEMBERS: "Never."] The right hon. Gentleman and I are perhaps in a minority of two in believing that not to be the case.
The suggestion by my hon. Friend the Member for Castle Point (Dr. Spink) and the right hon. Member for Berwick-upon-Tweed (Mr. Beith) is a constructive idea, which I would not want to dismiss. We should return to that. I look forward to the right hon. Gentleman's contribution to the debate. Certainly, in relation to quangos and non-departmental public bodies—that is, bodies without a Minister in charge—there is a very strong case for looking afresh at some of the principles that we apply, especially on recruitment and promotion, so I take the idea seriously.
In addition, the First Commissioner now has a role in relation to senior internal appointments, and attends the senior appointments selection committee. He is able to comment on the choice between open competition and internal appointment in relation to selection on merit, and on the development of senior selection processes.
The new regime introduced in 1995 clarified the roles of Departments and agencies and of Recruitment and Assessment Services. It has now been made clear that it is for the head of each Department or agency to ensure that the key recruitment principles are followed in practice. Departments and agencies are required to publish information about their recruitment systems.
RAS has had no formal role in regulating civil service recruitment, although of course it adheres to the commissioners' requirements in the services that it provides. RAS now focuses entirely on its role as a provider of high-quality recruitment and related services. That is in line with the principle recommended by the 1994 review, that the roles of service provider, that is, RAS, and the regulator, that is, the Departments and the civil service commissioners, should be separate.
Mr. Garrett: What is the justification for the retention of the administrative fast-stream entry in an organisation that is now supposed to be increasingly technocratic and managerial?
Mr. Freeman: The fast stream is designed primarily to recruit graduates into the civil service. It does not guarantee—
Mr. Garrett: They are not all graduates.
Mr. Freeman: No. I said "primarily". They are primarily graduates. It is a very competitive market. There is not a fast track to promotion, to permanent secretary level. At the early stages of the introduction of individuals—indeed, I suspect that my hon. Friend the Parliamentary Secretary, Office of Public Service, would be able to answer in a far more personal capacity because he was probably a product of that system—
Mr. Garrett: Without justification.
Mr. Freeman: I was not seeking to dodge the question. I am merely pointing out that we have some personal experience on the Treasury Bench. I believe that there is justification for the fast stream, simply because it attracts, from memory, about 7,000 to 8,000 applications a year for perhaps 200 jobs, in a very competitive graduate pool. It does so because it provides a tailor-made system of recruitment and pays special attention to those highly qualified individuals.
Mr. Garrett indicated dissent.
Mr. Freeman: Of course they are. They are for the most part graduates, who, if they did not join the civil service, would be competed for in the private sector.
I now refer to the privatisation of Recruitment and Assessment Services. RAS was established as a next steps agency to provide services to Departments and agencies on a repayment basis. It is widely regarded for its recruitment and assessment capabilities, and is perhaps best known for its role in the recruitment of high-calibre graduates to the civil service fast stream, the future "high fliers" in the civil service, but without any guarantee of promotion.
The agency has done well. With no tied business, it has to compete in a dynamic marketplace against Departments' in-house teams as well as against private sector recruitment companies. With the continuing development of a range of services designed to meet the changing needs of customers, it has established a reputation as a centre of excellence and it has been able to increase its overall market share of civil service recruitment, from 7 per cent. at the start to 12 per cent. in 1995–96—RAS accounts for only 12 per cent. of recruitment into the civil service.
The opportunity for RAS to compete in wider public and private sector markets will come at a time when companies are beginning to place their graduate recruitment in the hands of outside specialist recruitment firms. RAS will be especially well placed to exploit that trend. Freedom to develop fully the potential of the business will enhance the range of services and the value for money that it can offer to customers, including existing customers and Departments. Therefore, we are confident that privatisation will also give best value for money for the taxpayer.
Mr. John Gunnell: The Minister is well aware that that proposal was heavily defeated in the House of Lords—I think by 120 votes to 64. In response to the defeat, the Lord Privy Seal said that
300
the Government would bring forward proposals taking that into account. What changes have been made since the debate in the House of Lords?
Mr. Freeman: I had planned to deal with that issue later in my speech, but I shall deal with it now. I have been called to appear before the relevant Committee of another place, which is looking at the public sector and its services, including Recruitment and Assessment Services. I look forward to doing that after the Whitsun recess. The hon. Gentleman must concede that neither this House nor the other place has had as comprehensive an opportunity as today to consider the reasons for our suggestion of transferring ownership of RAS to the private sector. We are now doing that. When I attend the Committee of another place, I shall expand on that in even greater detail.
I look forward to seeing the conclusions of the report of that Committee, which I understand will be available before the summer recess—and before we complete any arrangements for the transfer of ownership of RAS. I give my assurance to this place and to the other place that the observations of the Committee will be taken into account and carefully considered. If the hon. Gentleman listened to the Lords debate, or read the report of it, he will have come to the conclusion that the arguments in it did not bear a tremendous relationship to the realities of the new situation, post-1995, when the principles governing recruitment into the civil service and the regulation of that process have been removed from RAS.
Mr. Giles Radice: Is the Minister saying that the noble Lord who led for the Government— who made two lengthy speeches—was incompetent and did not put forward the proper arguments? As I understand it, he put forward the arguments and a distinguished collection of Lords—if I may so boldly call them that—comprehensively undermined them and, as a result, the Government were defeated by a vast majority. If the Committee comes forward with proposals, the Government ought to take them very seriously and delay their project.
Mr. Freeman: I am the Minister responsible, and this is the first opportunity that I have had to account to the House—this is ministerial accountability. I am explaining the policy and the reasons for it in detail. I look forward to giving evidence to the Committee and to its deliberations. Any conclusions of the Committee that are relevant to the privatisation of RAS will be carefully considered. I give the House and the Committee an assurance that I shall treat the deliberations seriously. I cannot believe that the hon. Gentleman is suggesting that a Committee of this place or another place should control the policies of Government. It is this House and the other place that must pass specific conclusions on specific legislative proposals.
Mr. Derek Foster: Would it not be sensible to defer any progress on the privatisation until the Select Committee has given the Chancellor the benefit of its full deliberations?
Mr. Freeman: It depends what the right hon. Gentleman means by "progress". I assume that the relevant Select Committee will report before the summer

301
recess and that I shall have the opportunity to study its recommendations and perhaps even discuss the matter again. Therefore, we shall not conclude the process until that has occurred. [Interruption.] The right hon. Gentleman places particular stress on the word "conclude". He will know that it takes many months of careful planning—I shall comment on the timetable in a moment—to conclude a complicated privatisation. That process should, and will, continue and it will not be concluded until the Select Committee has reported—so long as that occurs before the summer recess.
Mr. Gunnell: Will we debate the matter again in the House before the process is concluded? The privatisation announcement was made in an answer to a written question, and this is the first opportunity that hon. Members have had to discuss it. It is a highly controversial matter, and it is not good to debate it immediately before a recess, when few hon. Members are able to participate in the debate. I believe that we should debate the matter in full in the House.
Mr. Freeman: I understand the hon. Gentleman's concerns: he has expressed them very clearly. The matter does not require legislation, as Opposition Front Benchers know and understand. We are debating the matter properly today. If the Opposition call another proper debate on the subject—as occurred with Her Majesty's Stationery Office—I shall be happy to respond. We have debated the issue three times and we shall debate it properly now. 1 am trying to explain the reasons for our decision. I believe that we should clear away some of the less rational comments regarding the process, look at the issues in an unemotional manner—perhaps in a boring fashion—and come to a considered conclusion.
Mr. Bernard Jenkin: I apologise again to my right hon. Friend for my absence earlier. We look forward to seeing the Opposition Front Bench, as represented by the archetype of new Labour, participate constructively in the debate. I am sure that Opposition Front Benchers will not opt for the reflex anti-privatisation reaction that we expect from Labour Back Benchers.
Mr. Freeman: I am grateful to my hon. Friend and I look forward to his contribution during the debate, which I am sure, as always, will be based on a wealth of experience.
RAS has already had some success in its exploration of wider public sector markets. The Government believe that freedom from public sector operating constraints will allow it to exploit and develop fully its considerable expertise with new customers, including private sector customers. That is why we announced last November that RAS should be privatised. Since that announcement, we have advertised the potential sale of the business and received completed questionnaires from interested bidders. Those expressions of interest have undergone an initial sift and I intend to send a detailed information memorandum describing the business to bidders who have pre-qualified, inviting them to submit indicative bids for the business.
The information memorandum will be issued shortly. I intend to place a copy of the letter inviting bids and the information memorandum—omitting commercially sensitive and personal information—in the Libraries of
302
each House. I shall write to the right hon. Member for Bishop Auckland about the matter as soon as I can. If the memorandum is issued during the recess, I shall send him a letter detailing the steps that I have taken.
The important civil service reforms that have been carried through in recent years have given rise to concerns in another place that key public service values may be under threat. Those concerns were voiced in the debate on the civil service last year, which considered the report on the role of the civil service by the former Treasury and Civil Service Committee as well as the Government's Command Paper "Taking Forward Continuity and Change", which accepted most of the Committee's conclusions. On that occasion, we made clear our continuing commitment to the principles laid down in the Northcote-Trevelyan reforms of the 19th century, which underpin the integrity and the quality of our civil service. I have already restated that commitment today.
Nevertheless, the opinion recently expressed in the other place on our proposals for the future of RAS was clearly based on that same concern. It was suggested that privatisation would remove a key safeguard of public service standards and risk a decline in the quality of recruitment procedures, and so of recruits themselves. I shall be appearing before their Lordships' Public Service Select Committee shortly after the recess, and I look forward to receiving the Committee's report—which I understand is expected before the summer recess—on its findings regarding the privatisation of RAS. When that Committee reports, I shall consider its recommendations with care and respond in due course. Meanwhile, we are adhering to the privatisation timetable, which is aimed at a successful completion later in the summer.
I want to explain why the concerns are misplaced, not least because of the safeguards that we are introducing to guarantee the integrity and quality of civil service recruitment undertaken by RAS after privatisation.
Mr. Michael Connarty: Does the Minister agree that there is already a great problem, in that 1,706 maladministration complaints have been filed with the Parliamentary Commissioner for Administration in the past year? Is there not an increasing correlation between departmental maladministration and the loss of 32,000 civil servants since 1993? How can quality be achieved when staff are put under amazing pressure through job cuts?
Mr. Freeman: I do not accept that there is any correlation between examples of maladministration and civil service staff numbers. I accept that there is great pressure on the civil service, as there is on just about every private sector company. We live in a much more competitive world, and the House and the taxpayer demand proper value for money and control of public expenditure.
Mrs. Dunwoody: Is not that nonsense? The specific terms laid down for the creation of the Child Support Agency specified that civil servants should not normally be recruited, but outside people with no experience should be recruited—many of whom are on shift work of no more than four and a half hours and are badly paid. If the Minister seriously believes that that produces quality work, I suggest that he reads carefully not only criticisms

303
of the CSA but the continuing complaints that every Member of Parliament has about the agency's ability to deal with the problems that confront it every day.
Mr. Freeman: I submit that those problems are to do with procedures, not the number of civil servants employed.
Mr. Derek Foster: I am totally surprised that the Minister dismisses the parliamentary ombudsman's criticism, to which my hon. Friend the Member for Falkirk, East (Mr. Connarty) referred. When I tackled the Parliamentary Secretary in a debate only a short time ago, he dismissed the argument in the same way. He felt that nothing in the report underpinned what had been said in the press release. I took the opportunity to write to the ombudsman, and he reaffirmed his comments in the press release and said that he had all the evidence required to underpin his criticism.
Mr. Freeman: No one disagrees that the duties of a particular Department must be discharged with the appropriate number of civil servants, but I do not accept the contention that the reduction in their total number correlates to the number of complaints of maladministration, for which there are many reasons.
Mr. Connarty: As a member of the Parliamentary Commissioner for Administration Select Committee, I can tell the Minister that many permanent secretaries have appeared before it—and when we ask about maladministration, it comes down to pressure on staff. When staff make a mistake, they do not have time to find out how it was made, who made it and how it can be corrected. Pressure is created by lack of numbers, and even changes to the system have not relieved that pressure. Will the Minister accept that point, before he rushes headlong down the road of further cuts and maladministration?
Mr. Freeman: One of the factors relating to the responsibilities of a specific Department and the way in which it discharges its duties is staff numbers. Many other factors, however, are involved: the procedures, the training and whether the right balance between public sector and contracted-out functions has been struck, to name but three. The general contention that there is a correlation of some kind between the number of cases of maladministration—1,706 was the figure cited—and the decline in the number of civil servants is not sustainable.
The concerns expressed in another place tend to imply that our proposals—to privatise RAS—will change the rales governing civil service recruitment and the responsibilities for ensuring that they are followed. They will not. The rules, based on the principles of fair and open competition and selection on merit, are rightly regarded as cornerstones of civil service integrity. Those rules are embodied in the civil service Order in Council and set out in the recruitment code of the independent civil service commissioners. Departments and agencies are responsible for ensuring that the requirements of the code are met.
The commissioners audit their recruitment policies against those requirements. RAS has only an operational role as a provider of recruitment, assessment and
304
consultancy services to civil service customers who choose to use it. It retains no links with the regulatory functions of the commissioners. Those arrangements are in no way affected by the privatisation of RAS.
It has also been suggested that our proposals may affect the quality of recruitment, in particular recruitment to the civil service fast stream. In their response to the review of the fast stream, published in July 1994, the Government announced their intention to retain a servicewide fast stream scheme aimed at recruiting the very best graduates. The privatisation of RAS will not change that. We propose to convey to the new private sector owner of RAS the exclusive contracts to provide fast stream customers with the recruitment services that they require.
It might be helpful to the House if I describe the safeguards designed to guarantee the integrity and quality of the fast stream selection process after the sale.
Most importantly, there will continue to be close civil service involvement at all stages. We have stipulated that actual selection of candidates must remain in the hands of civil servants. The civil service will continue to provide assessors at the civil service selection boards—the main assessment stage of the process—and panel members for final selection boards. They, not RAS, will decide the success or failure of candidates.
The main fast stream contract is being drawn up in consultation with the customer consortium of fast stream employing Departments and is designed to ensure that they retain at least the same control over the process and tests used in their competitions after the sale as they currently enjoy. The Office of Public Service will work with customer departments and RAS to ensure that obligations are met and that the day-to-day operation of the contract runs smoothly. Those running specialist fast stream schemes are also involved in the work to create separate contracts that will meet their particular requirements. Customers—Government Departments—will also be closely consulted in the selection of the new owner.
The detail of all stages of the selection processes will be set out in the contract schedules. In his recent independent audit of the fast stream, Professor Bartram commended RAS's approach of treating those processes as dynamic rather than fixed, and it will be important for the processes to continue to change and evolve in response to customer needs. However, all changes will need approval from those customers. It will not be possible for the new owner to seek to take short cuts, therefore, in an effort to reduce costs. Nor would the new owner want to do so. We shall select a new owner with a clear commitment to making a success of those prestigious contracts and to maintaining the reputation that RAS has established for its leading-edge public sector recruitment and assessment work. The new owner can be expected to put greater effort into maintaining positive and productive relationships with civil service customers.
The Government will retain ownership of the tests and exercises used in the fast stream selection process, including those developed by the new owner for fast stream use. The tests for use in each competition will continue to be approved by customers. Civil servants will still be responsible for preparing background exercises based on civil service work. Under the terms of the intellectual property licence to be granted to the new owner, the tests will be strictly protected while current. Use of old tests elsewhere will be subject to provisions

305
designed to ensure that the integrity and efficacy of the fast stream schemes is in no way compromised. Again, customers are closely involved in the work on the licence, as well as the contractual terms relating to that area.
The staff of RAS have shown great commitment in maintaining the highest standards of service, while also working to prepare for privatisation. We of course attach the utmost importance to ensuring that they are treated fairly and that their rights are fully respected in the process. Arrangements have been made to keep staff as closely involved and informed as possible. We intend to publish the short-list of bidders in due course, so that staff representatives can have the opportunity to meet prospective purchasers and discuss their plans with them. As has been the case with other transfers to the private sector, the Transfer of Undertakings (Protection of Employment) Regulations 1981 will apply at the point of sale to preserve all terms and conditions.
I can also state that we would not wish to take forward proposals from bidders which include the utilisation of offices outside Basingstoke or its immediate vicinity for the head office operations of RAS. That will provide reassurances to staff.
The Government are committed to ensuring that the sale is conducted on a basis that not only maintains and enhances the standing of RAS as a high-quality provider of recruitment and assessment services, but guarantees that the integrity of the recruitment that RAS carries out for civil service customers is maintained. The provisions that I have outlined will meet those objectives.
I shall conclude by dealing with the Civil Service College, which has aroused a good deal of attention and misplaced concern in recent weeks and months.
Mr. Adam Ingram: I do not know whether the Minister has seen the four questions on today's Order Paper, relating to the prior options review and the future of the public sector research establishments. As he is responsible for the civil service, and as thousands of civil servants will be affected by those announcements, which have not yet been made available to the House, does he share my concern that the morale of those civil servants will go into major decline and that the announcements will be seen as an attack on the science base in the United Kingdom? Why are those announcements being made by way of written answers and not by way of debate in the Chamber?
Mr. Freeman: As the hon. Gentleman knows, the prior options process has now been in operation for a good number of years. It is a routine method of examining whether a certain function should remain in the public sector and, having decided that it should remain in the public sector, whether any particular aspect of that service needs to be market-tested. I shall certainly look into the specific points that the hon. Gentleman has raised, and I am grateful to him for reminding me of them. I was not personally aware of them or briefed—
Mr. Ingram: Why?
Mr. Freeman: As the motion in the name of the Prime Minister makes clear, I am dealing with certain specific issues. If the hon. Gentleman would like an answer, my hon. Friend the Parliamentary Secretary will seek to address that point when he replies to the debate.
306
I conclude by dealing with the Civil Service College. For more than 25 years, the Civil Service College has provided training and development for civil servants, particularly those at senior levels. As well as training more than 30,000 students a year on more than 500 different courses, the college makes an important contribution to the articulation and preservation of the values enshrined in the civil service code. In addition, the college is highly regarded around the world and receives a steady stream of eminent foreign visitors.
The college is an executive agency within the Office of Public Service, and as such, its strategy and operation have recently been reviewed. The review of the Civil Service College has been designed to ensure that the college achieves its full potential for developing the best traditions and the international reputation of the civil service. A wide range of options has been considered, including continuing as now in the public sector and partial or full transfer of ownership to the private sector. The Government concluded that the college should proceed within the public sector to develop new activities in partnership with the private sector.
The Government will ensure that the essential link between the civil service and the Civil Service College is preserved. The college will build on and extend already established and successful partnerships, which include the delivery of a public sector MBA in partnership with Cranfield university and Manchester business school, the delivery of courses on the private finance initiative with Price Waterhouse and a project in the Czech Republic together with a Dutch private sector partner.
New partnerships currently under negotiation cover a variety of training courses, seminars, conferences and consultancy assignments. With them, the Civil Service College will have the means and resources to extend and enhance the quality of the services that it provides. What the Government are seeking to achieve with those further developments is the continued development of training for civil servants, particularly those with professional and senior management responsibilities, and that the college should become a centre of excellence in public sector management and reform, recognised in Britain and worldwide.
Later this summer—before the recess—I hope to publish a White Paper on training and development in the civil service, dealing not only generally with enhancements and improvement to those processes, but specifically with Investors in People, and commitments that the public sector should be making to support that initiative.
In conclusion, the motion covers the Government's intentions for the future of the civil service. It represents a package of important measures: the promulgation of the civil service code, the strengthening of the role of the civil service commissioners, the development of the senior civil service, the privatisation of RAS, with the necessary safeguards to protect the quality and principles of civil service recruitment, and the forthcoming White Paper on training and development in the civil service, associated with the further development by the Civil Service College of a number of partnerships with the private sector. I commend those proposals to the House.
4.19 pm
Mr. Derek Foster: I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof:

307
'welcomes the statement in the White Paper "Continuity and Change" that "the Government recognises that the Civil Service is not the property of any single administration", and commends the Government for constructing consensus around the Civil Service code; regrets the Government's refusal to manage other Civil Service reform by seeking consensus or properly consulting staff; recognises the widespread feeling of job insecurity and "initiative fatigue" throughout the Civil Service; urges the Government not to proceed so late in the Parliament with the privatisation of HMSO, RAS and OHSA and to join opposition parties in seeking consensus by requesting the Public Service Committee to conduct a thorough independent review of all recent Civil Service reforms.'.
As I listened to the Chancellor of the Duchy of Lancaster, I realised why he has his job. I am sure that he could present the slaughter of the innocents as the most acceptable and humane of happenings.
Mr. Robert G. Hughes: Did you not use that line last time?
Mr. Foster: No, I did not. The hon. Gentleman is a veteran of such debates, and should remember what goes on.
We are witnessing a sea change in British politics. The Conservative party once had the reputation of being the most formidable vote-winning machine throughout Europe. Now, it is so riven by ideological division that it cannot address the concerns of the British electorate, and certainly cannot address the concerns of the civil service.
Even with the Deputy Prime Minister, the Chancellor of the Exchequer and the Foreign Secretary at the heart of the Government, each one a pro-European, one-nation Tory—the Chancellor of the Duchy of Lancaster confesses to be of the same persuasion—the Conservative party cannot drive to the middle ground of British politics, which is now commanded by the Leader of the Opposition and new Labour. Stung by the charges of inadequate leadership, incompetence and rift, wherever the Tory high command tries to create an impression of momentum, the inner dynamic of the party drives to the right.
Since the Deputy Prime Minister took charge less than 12 months ago, he has driven to the right on civil service issues with frenetic glee. Frustrated in his plan to sell off the Post Office, he is privatising every tiddler that moves or is stationary in the civil service. The civil service has been so privatised, market-tested and contracted out that job insecurity is widespread.
Although the President of the Board of Trade thinks that job insecurity is only a state of mind, it strikes me that Ministers and Tory Back Benchers take their own job insecurity seriously enough. Even if we grant that the President of the Board of Trade might conceivably be correct and that job insecurity is a state of mind, I remind Conservative Members that being a Tory voter is also a state of mind.
The Deputy Prime Minister dispatches his messenger the Chancellor of the Duchy of Lancaster to the House to persuade us to approve the motion; yet the only reason why we are having this debate is that the Government suffered a humiliating defeat in another place. The privatisation of the Recruitment and Assessment Services agency needs, as the Chancellor of the Duchy of Lancaster said, no primary or secondary legislation. The proposal was smuggled out in a written answer one Friday
308
afternoon. There would have been no debate in either House without Lord Bancroft, who initiated a debate in the other place on Friday 8 March.
Of the 20 people who spoke in that debate, only one supported the Government. Those taking part included a former Prime Minister, a former Chancellor of the Exchequer and Home Secretary, a former Conservative Minister of Transport, a former Conservative Secretary of State for the Environment, and a former Secretary of State for Education. Others included many who have reached the most senior positions in the civil and diplomatic service or in academic life. The result was that the Government lost the vote by 124 votes to 64. When I heard that news, I immediately wrote to the Chancellor asking him to initiate a debate in the Commons. Two months later, he has responded with this debate just before the recess.
In the debate in another place, Lord Bancroft referred to
"the flippant destruction of an essential pillar."
He was referring to the civil service. Lord Callaghan reminded the House that the civil service was
"not the private property of temporary, fleeting Ministers to trifle with as they please. It is the property of us all to guarantee its neutrality, independence and integrity".
He went on to suggest that Ministers
"have been so long in power that they are insensitive to the limits of their responsibilities."
He called for a royal commission or a Select Committee to review the matter, as has happened on many occasions since the great Northcote-Trevelyan reforms of the mid-1850s.
Lord Jenkins doubted that it was constitutionally proper for a Government who were clinging on to power
"to force through a totally unnecessary change on a subject which goes to the heart of the delicate balance between party government and wider national interest".—[Official Report, House of Lords, 8 March 1996; Vol. 570, c. 545–48.]
Lord Hunt of Tanworth said that the process would deserve the most careful consideration at the best of times, but that these were post-Scott times, when the whole question of the public service ethos was under serious discussion.
I do not intend to address all the arguments for and against the privatisation of RAS. I leave that to my hon. Friend the Member for Hartlepool (Mr. Mandelson), whom I might describe as my comrade in arms, who will wind up the debate. I just caution the Government that, with such distinguished opponents, whose long and deep experience should not be ignored, they should consider that they may conceivably be wrong.
Should not the Government take the advice of the former Prime Minister, Lord Callaghan, that they should give the whole matter of civil service reform a proper airing in front of the appropriate Select Committee in this House, or perhaps even a Joint Select Committee of both Houses, so that we can proceed on these matters, which are so crucial to our unwritten British constitution, with some consensus?
Mr. Alan Duncan: On that point, will the right hon. Gentleman confirm categorically that it is Labour party policy not to politicise the civil service any further, either by appointing a political press secretary to No. 10 Downing street, should, by any

309
prospect, Labour occupy these Benches, or by adding more political appointees to the private offices of individual Ministers?
Mr. Foster: If I wanted to be unkind to the hon. Gentleman, I might say that it would be impossible to politicise the civil service any further, but I shall not be so unkind.
I now turn to the White Paper "The Civil Service: Taking Forward Continuity and Change". In that White Paper, the Government seemed, like Lord Callaghan, to be seeking consensus. They said that they recognized
"that the civil service is not the property of a single Administration."
However, in my view, there is little evidence of a bipartisan approach over the past 17 years, as the Government have imposed wave upon wave of change on the civil service, with no consideration for the views of staff or of the civil service trade unions.
If the Government genuinely want consensus, let them now halt the privatisation of HMSO, RAS, the Occupational Health and Safety Agency and the Government computer centre at Chessington. Let them abandon the market testing of the administration of the principal civil service pension scheme. Let them abandon the privatisation of the public sector research establishments, a matter that was recently raised by my hon. Friend the Member for East Kilbride (Mr. Ingram), because that would damage the continuity, independence and integrity of the science base as a provider of research information and advice in the public interest.
Labour believes that the Government have behaved with reckless irresponsibility in bequeathing two huge problems to their successor. First, the trust between the people and Government is badly fractured. For the first time since the great reforms of the mid-19th century, the probity of the British public service is in question.
I was glad that my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), the Chairman of the Public Accounts Committee, intervened earlier. In its eighth report, that Committee spoke of
"a departure from the standards of public conduct which have been established during the past 140 years."
I have an example of that. The Committee discovered, in the very citadel of Government—in the Treasury—that one arm of the Treasury had been defrauded of £250,000 by another of its arms, called Forward Catering. If that type of incompetence and fraud is occurring in the very citadel of Government, what hope have we of discovering it in the "sticks" of Government?
The Public Accounts Committee also claimed that the fragmentation of the civil service makes its job of effective scrutiny far more difficult.
The former Prime Minister, Lord Callaghan, said that he was
"more worried about the Civil Service than I have ever been in the 60-odd years since I first joined."
If Conservative Members do not like the words of a former Labour Prime Minister, let me remind them of the words spoken in the House by the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) in the debate on civil service pensions:
"In pursuing the privatisation path, particularly regarding civil service arrangements, my hon. Friend the Minister is making a grave mistake."—[Official Report, 7 May 1996; Vol. 277, c. 132.]
310
Those are the words of a Conservative former Prime Minister.
The fact that the current Prime Minister was forced to set up the Nolan committee is eloquent enough comment that the public have lost confidence in Government and in Parliament to put their houses in order. Those who have read the 1,800 pages of the Scott report—which took three years to complete, at a cost of £3 million—will have had a disturbing picture of Whitehall's culture of secrecy and of the unhealthy relationship between Ministers and civil servants. Restoring trust between the people and Government is a formidable task, which will not be achieved quickly or easily.
New Labour has a very ambitious programme of constitutional and democratic renewal. It is based on four principles: first, a clearer definition and stronger protection of the public interest; secondly, greater decentralisation of Government; thirdly, greater transparency; and, fourthly, much more accountability. Our programme will, of course, include devolution to Scotland, Wales and the English regions, in time; a limited reform of the House of Lords; and a freedom of information Act to make central Government and their agencies and quangos more open.
Dr. Spink: Will the hon. Gentleman inform me about a personal matter? Has he ever been approached by any of his constituents asking for an, additional, regional layer of government?
Mr. Foster: The hon. Gentleman totally misconceives the Labour party's proposals. We do not propose to impose an additional layer of administration at all.
Mr. James Couchman: If the Labour party does not propose imposing an additional layer of government in forming regional government, which current layer of government would it do away with?
Mr. Foster: I am completely surprised that Conservative Members do not see the virtue—in what is now the most centralised Government in Europe—of pushing power further down to the people. That objective strikes me as eminently sensible and very popular. I am surprised that the hon. Gentleman is not persuaded of its sense.
Several hon. Members rose—
Mr. Foster: No; I shall not give way again for the time being.
I was beginning to describe my party's proposals for dealing with the breakdown of trust between the people and the Government. It is horrifying that the Conservatives are quite unaware that that breakdown is what they have achieved in their 17 years of undistinguished rule. We want to put on a statutory basis the civil service code to which the Chancellor of the Duchy of Lancaster referred; we want an effective register of all quango members and their financial, political and other interests; and we want new arrangements to ensure better accountability of quangos at each level on which they operate.
I deal now with the second problem that will face the new Government—the widespread demoralisation throughout the civil and public services. In an interview

311
with The Observer last November, Sir Robin Butler himself described the revolution sweeping Whitehall Departments as having sapped the morale of civil servants and created a climate of insecurity.
The recently published First Division Association MORI survey revealed that 40 per cent. of senior FDA members expected to leave the service shortly, and that morale was at a low ebb. The much more recent survey of civil servants conducted by The Observer, together with the Public Service, Tax and Commerce Union— known as the PTC—and the Institution of Professionals, Managers and Specialists found that 92 per cent. of those asked believed that civil service morale was quite or very bad, and that 73 per cent. would not advise the next generation to join the civil service.
The House will have seen the ICM poll published in The Observer on Sunday 5 May, which showed that insecurity has risen sharply in the 1990s and has spread to people of all ages, all regions and all social groups. A sense of insecurity pervades the whole of the civil service. Whenever and wherever I meet civil servants, that is uppermost in their minds.
What will Labour do to tackle low morale in the civil service? First, Labour will affirm its commitment to the public service and reassert the classic civil service values. Those values were Once shared by one-nation Conservatives, who have now been elbowed aside by the right-wing ideologues who call the shots.
Mr. Bernard Jenkin: Will the right hon. Gentleman give way?
Mr. Foster: Not for the time being.
Secondly, we shall make it clear that the British civil service is a great national asset which, since the 1870s, has been a permanent and impartial instrument of all Administrations. The new Government will recognise their duty to preserve its efficiency and honesty for their successor.
Thirdly, we shall halt privatisation of the service. Fourthly, we shall place a moratorium on market testing while we institute a thorough independent review, but the drive for efficiency—[Interruption.] It is interesting that a party which has instituted so many reviews finds the notion of this review mildly amusing.
Mr. Radice: Is not the Government's problem the fact that they have done a great deal without any testing, and without thinking through the implications of what they were doing? Is that not the reason why so many of their policies have failed?
Mr. Foster: I am grateful for that intervention from my distinguished and hon. Friend the Member for North Durham (Mr. Radice), the Chairman of the Public Service Select Committee.
The drive for efficiency, value for money and high-quality service will continue under Labour. However, the motivation will not be the dogmatic wish to drive down public expenditure in order to fund tax handouts. Nor will we seek efficiency gains by driving down public servants' wages and conditions of service; nor will we regard downsizing as an end in itself.
312
No one should expect the pace of change to slacken, because change is driven by international competitive forces. Change is inevitable, but it does not have to be threatening. Change does not have to mean more job insecurity. Britain will succeed only by embracing change, and managing it for the benefit of all. The Government will be judged by the success with which they prepare the country, including civil servants, to embrace change.
New Labour will invite the British people to become partners with the Government in managing change, because Labour believes that the British people are the nation's most valuable resource. The country can succeed in an increasingly competitive world only by developing the skills and talents of all our people. In the stakeholder society, every citizen must have an opportunity to make his or her contribution. That contribution must be given proper recognition and rewarded fairly. In this way, we will build one nation and unite the country.
Mr. Bernard Jenkin: I speak as a one-nation Conservative. The right hon. Gentleman talks at length about job insecurity in the civil service, but he has given no analysis of why that insecurity has arisen. Is it not due to the changing nature of the labour market, the introduction of technology, and all the factors that create job insecurity in the private sector? Furthermore, he has given a long list of things that Labour would stop doing. Can he tell us what Labour will do, other than have another review?
Mr. Foster: The Tories cannot wriggle out of the charge that they have created job insecurity by blaming the changing nature of the job market. They have created wave upon wave of changes in the civil service, and they have caused virtually everyone in the service to fear for their jobs and their future. That is the Government's responsibility, and they will suffer for it at the next election.
I believe that a sense of ownership among staff could transform the amount and quality of service throughout the civil service and across the public sector, but that will not occur with demoralised, undervalued and insecure public servants. It will not occur without skilled managers who believe in the quality of the work force and are determined to encourage the development of skills. It will not occur without a great investment in training, and, above all, it will not occur without politicians who believe in the public service and are committed to its success.
My party recognises the wealth of skill, expertise and experience within the civil and public services, and our success in office will largely depend on our ability to galvanise the Whitehall machine. Labour is keen to learn from the best of private sector management, and we see the need to reconcile the clash of cultures that has occurred in recent years. A new genre of public sector managers is required, who are eager to adapt the best of private sector practice and keen to enhance all that is best in the public sector.
Labour and the country are deeply indebted to the former Treasury and Civil Service Select Committee and to the Nolan committee for the proposals that have been accepted by the Government. These are remarkable examples of independent committees building consensus where the Government were unable to rise to the task.

313
The consensus on the new civil service code would not have been possible without the seminal draft proposed by the Select Committee.
Although the code does not go far enough, it is an important step. It provides a unifying set of values to a dangerously fragmented service, and an independent appeal system. It requires Ministers to take cognisance of the code and to refrain from inducing civil servants to act outside the code. Labour will put the code on a statutory basis. Nolan has also made important recommendations.
Mr. Connarty: Is my right hon. Friend aware that the Select Committee on the Parliamentary Commissioner for Administration—which has a Conservative majority— recommended in its recent report on open government that we should have a freedom of information Act to ensure that the partnership between the public and the civil service is clear, by allowing information to be available to all by statute?
Mr. Foster: I am grateful to my hon. Friend. I had intended to refer to that development later in my speech. There now seems to be a consensus emerging that we need a freedom of information Act, but that consensus excludes parts of the Conservative party.
Nolan has made some important recommendations—on Ministers and special advisers taking up business appointments; on amendments to "Questions of Procedure for Ministers"; on quangos, with respect to methods of public appointment; on the rules and procedures assuring probity and proper conduct of business; and, only last week, on local accountability. Those are important advances, which will make the task of the next Labour Government easier, but a wiser Government would have been leading rather than following.
There is, I think, a consensus on next steps agencies. By the end of 1996, 80 per cent. of civil servants may be in such agencies, most of which are working well. Where that is the case, Labour will see no reason to change the structure. Indeed, I have already endorsed the conclusion of the Treasury and Civil Service Select Committee, which has stated:
"We believe that the next steps agencies represent a significant improvement in the organisation of government. And that any future government will want to maintain them".
Let me make one thing clear, however. Under Labour, agency status will not be a step towards privatisation. In the case of bodies such as Her Majesty's Stationery Office and the Recruitment and Assessment Services agency, which may need to borrow in the private sector and sell in wider markets, full commercial freedom in the public sector will be given careful consideration. The Parliamentary Secretary wags his head, but it has been given no consideration whatever by the Government, and that is to their shame.
Mr. Bernard Jenkin: There will be a review.
Mr. Foster: The hon. Gentleman may not be around to see whatever reviews take place in the future.
There is an important issue relating to ministerial responsibilities. According to "Questions of Procedure for Ministers",
"Ministers are accountable to parliament for the policies, decisions and actions of their departments and agencies",
314
but Sir Robin Butler has drawn a distinction between Ministers' accountability and their responsibility for policies and actions.
That doctrine is very convenient for Ministers. Under such a dictum, it seems possible that no Minister ever need resign over anything. I am aware that perhaps that just ratifies current practice, but, as the reaction to the Scott report demonstrates, it has not satisfied the electorate, and has further damaged the credibility of the democratic process. Furthermore, it may put chief executives, not Ministers, in the firing line, as the Derek Lewis affair showed. Ministers are all too ready to claim credit for success and delegate blame for failure.
Mr. Freeman: Let us be clear about the policy for agencies. The right hon. Gentleman just said that "careful consideration" would be given to allowing agencies such as HMSO—if it remained in the public sector—to compete with the private sector, in the private sector. I think that that was the essence of what he said. Will he confirm that, as a result of this careful consideration, there might well be circumstances in which agencies that were already in the public sector could compete fully in the private sector, with the private sector?
Mr. Foster: I see no problem with that, provided that such careful consideration takes place. I understand that it happens elsewhere in Europe.
Let me return to the question of ministerial responsibility. It was Scott's view that, if Ministers were not to be responsible—in the sense of blameworthy—for all the actions and activities of their Departments and agencies, the corollary was that Parliament must be given fuller information, so that Parliament and people could judge where responsibility lay. I agreed with that; that is why a freedom of information Act is so crucial, as my hon. Friend the Member for Falkirk, East (Mr. Connarty) pointed out.
In addition, however, Parliament should strengthen its Select Committees by extra staffing, and challenging the Osmotherley rules under which civil servants give evidence. Clearly, the Government need to improve the flow of interdepartmental information and decision-making. I look forward to the deliberations of the Select Committee on Public Service on all those issues.
In a recent article in The Times on the general theme of the public service, my right hon. Friend the Leader of the Opposition wrote:
"We seek to build sensibly on what is in place. We keep what is good and working. We change what isn't."
That strikes me as a balanced approach. Surely a period of calm reflection is required—an open, independent and thorough review of all the changes imposed in recent years and a proper assessment of effectiveness, efficiency and value for money because we do not believe what the Government tell us about those concepts. It should be a review that builds on the excellent work of the Treasury and Civil Service Select Committee and the Nolan committee.
Mr. Duncan: Another review.
Mr. Foster: No, it is the same review. The challenge is to create a distinctive public service management philosophy, which adopts the best management techniques from the private sector, while enhancing the long-standing public service values of which we are so proud and which are so essential to good government, whoever is in power.
The Government are guilty of too little continuity and too much change—much of it ill-conceived, ill-considered and poorly managed. The Government have been driven by dogma to the point of recklessness in the exercise of their duty of care to the independence, impartiality and integrity of the British civil service. With 500,000 civil servants—many living in marginal seats such as that of my hon. Friend the Member for Norwich—a reasonable person would expect the Government to heed Voltaire's advice as the election approaches. [HON. MEMBERS: "The hon. Member for Norwich, North (Mr. Thompson) has a 6,500 majority."] I am referring to the other seat in Norwich—that of my hon. Friend the Member for Norwich, South (Mr. Garrett)—and I think that the Minister is thinking of that seat, too.
Hon. Members will recall that Voltaire—a noted atheist—was on his deathbed urged by a priest to repent and renounce the devil. Voltaire replied:
"This is no time to make enemies".
Perhaps the Government too are beyond redemption. It would be a kindness for them to be put out of their misery sooner rather than later, and the House can do it by voting for the Opposition amendment.
Mr. Beith: On a point of order, Mr. Deputy Speaker. Earlier in the debate, the hon. Member for East Kilbride (Mr. Ingram) mentioned a number of written answers about the privatisation of some parts of the civil service, which were due to be published at 3.30 pm. I have been seeking the same written answers for much of the day. The hon. Gentleman has gone out of the Chamber again to establish whether they are in the Library. It seems unreasonable that we should be debating significant matters of privatisation when that material, which the Government announced today, is not before us and was not explained by the Minister in his remarks. I hope that you do not mind my drawing Ministers' attention to that matter in a point of order.
Mr. Deputy Speaker (Mr. Michael Morris): I am
sure that the right hon. Gentleman does not expect me to answer that question, but Ministers are present and undoubtedly heard his point of order. They may want to respond.
Dr. Jeremy Bray: Further to that point of order, Mr. Deputy Speaker.
Mr. Deputy Speaker: Order. There can be no further points: the answer was clear.
Dr. Bray: On another point of order, Mr. Deputy Speaker.
Mr. Deputy Speaker: I shall take it if it is a new point of order.
Dr. Bray: The House is debating the civil service and the prior options study has been completed. The answers to the written questions on the Order Paper have been given to the Select Committee on Science and Technology.
Mr. Freeman: Further to that point of order, Mr. Deputy Speaker. I heard what the right hon. Member for Berwick-upon-Tweed (Mr. Beith) said. Those questions are not my Department's responsibility, but during the debate I shall ascertain what the position is and I hope that my hon. Friend the Minister will be able to deal with it in his reply.
4.54 pm
Mr. James Couchman: I wish to discuss the prior options review, about which the points of order were made.
The phrase, "prior options review" is remarkably Stalinist. I do not propose to go down the track taken by the right hon. Member for Bishop Auckland (Mr. Foster), but the idea that devolution in Scotland can be achieved without the most extraordinary upheaval in civil service and government generally is beyond belief.
In a touching ceremony on 30 April, only three weeks ago, my noble Friend Baroness Chalker gave my noble Friend Baroness Young a large golden or gilded key that fitted the buildings in my constituency formerly known as HMS Pembroke, which for the past eight years have housed the natural resources institute of the Overseas Development Administration. The keys were handed over by the ODA to the university of Greenwich in what may be the first of several such handovers from the public to the private sector.
The university of Greenwich will manage the NRI on behalf of a powerful consortium that consists of itself, Imperial college London, Wye agricultural college and the university of Edinburgh. I believe that the handover will be good for the NRI, which relies largely on commercial contracts for its resources. It will certainly be good for the consortium of four powerful universities and it will be especially good for the university of Greenwich because it involves the injection of a centre of scientific excellence that has world renown for its research. That will lift the research component of the university of Greenwich. The site is particularly well located alongside the university's recently arrived school of earth sciences, which shares part of the buildings once known as HMS Pembroke, which were occupied by the Navy in the days of the Royal Navy base at Chatham.
Greenwich is a thrusting and ambitious university. It was a polytechnic for 100 years but it is a young university. It is trying to rationalise its many sites into five campuses. Hon. Members will know of its bid, which is believed to be successful, for the Royal Naval college at Greenwich. The NRI in its former naval buildings is an excellent fit and addition to the university's research capacity, especially as its membership of the consortium forges links with pre-eminent academic institutions. This will be the forerunner of many public sector research establishments moving from the public sector to the sort of private sector that the consortium represents.
The NRI was ready for the change thanks to the excellent work of its director until the handover, who is working closely with my right hon. Friend the Chancellor of the Duchy of Lancaster. Thanks are also due to his staff over the period since it became an agency.

317
Last Friday, my wife and I visited the Horticultural Research International establishment at East Mailing in the constituency of my right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley). Its headquarters is at Wellesbourne and was mentioned in the brief intervention of the hon. Member for Stratford-on-Avon (Mr. Howarth), who I am sorry to see is no longer in his place. I went to discuss the research that is being done at East Mailing with its director of external affairs, Dr. Flegg. He was able to show me some of the important work on hops, apples, pears, strawberries, raspberries and cherries. That work is important for Kent—the garden of England. In Kent, we depend for our horticultural excellence on many small and medium-sized growers, who frequently market through co-operatives and who would certainly not be able to undertake strategic research of the type that is undertaken by HRI.
There is great concern at HRI, and I propose to paraphrase extensively from its chief executive's letter, which may have been sent to other hon. Members. HRI staff are worried that HRI, although it may one day be ready for privatisation—perhaps to the university sector, as has happened to the natural resources institute—is not currently ready for privatisation, mainly because it is not sufficiently robust financially.
I do not hold the view expressed by the Institution of Professionals, Managers and Specialists that privatisation should never take place, and I find its briefing somewhat misleading and at least very selective in the quotes that it gives us from the prior options review guidelines. I agree with certain points that it makes, however, and especially that:
"The scientific activities undertaken by public sector research establishments are often of a long term nature. Security of funding and freedom from constant contractual and organisational upheaval are required to enable them to flourish."
An example is marine studies undertaken in the interests of the environment by scientists for the Natural Environmental Research Council.
IPMS also says that it is very important to maintain the independence and integrity of such research establishments in the advice that they give to farmers on, for example, pollution, which is currently provided by the Ministry of Agriculture, Fisheries and Food.
I am much taken with the arguments of Professor Payne, the chief executive of Horticulture Research International. He has expressed concern that decisions will be taken by Ministers about the future of HRI in the very near future, and the right hon. Member for Berwick-upon-Tweed (Mr. Beith) is worried that those decisions may have been taken, although the information is not available to us in written answers. I hope that my hon. Friend the Minister will be able to clear that up.
The Parliamentary Secretary, Office of Public Service (Mr. David Willetts): Although this subject is not within my Department's responsibility, we are checking the position at the moment. We understand that the written answers are being tabled and are on their way to hon. Members; I apologise for any delay that hon. Members have experienced in receiving them. My right hon. Friend the Chancellor of the Duchy is pursuing the matter.
Mr. Couchman: I am very grateful to my hon. Friend. He will understand that my remarks are obviously made in ignorance of what may be in those written answers, which are not yet available to us.
It is very important to continue to provide strong research and development for the United Kingdom's horticultural industry. The rapid changes in ownership of HRI might compromise that strength, and I hope that when Ministers take these decisions they will be conscious of the need to maintain HRI as a centre of excellence for horticultural research and development. It currently operates in the public sector for the public good, and it is already the product of several earlier rationalisations.
There are, I believe, six sites, including the headquarters at Wellesbourne, the site at East Mailing, three outposts and a small presence at Wye college. If HRI moves towards the private sector, it may move to a university situation rather than to full-blown privatisation. It is extremely unlikely that that especially important research establishment could be supported by its industry, which, as I have said, is made up primarily of unsubsidised small and medium-sized businesses, none of which could support a research programme of the nature that is available.
I hope that the example of the movement of the natural resources institute from the public sector to the private sector—from the Overseas Development Administration to the university of Greenwich—will be a forerunner for many other institutes in the public sector. Those establishments are important, they are centres of excellence, and the university sector is probably the most appropriate place for them to be transferred to.
Mr. Ingram: Is there not a danger that, if the university sector takes over some of these research institutes, it will cherry-pick some of the best aspects of the work and other activities will be cut because they do not fit comfortably into the university sector? Does the hon. Gentleman agree that it is therefore not necessarily the best solution in every case, regardless of the circumstances?
Mr. Couchman: I understand what the hon. Gentleman says. Fragmentation of the HRI establishments would be a detriment to the integrity of the whole, and I hope that, if a consortium such as the one that took over the natural resources institute takes over the HRI, it will take it over completely and continue with the excellence of its work.
I hope that the consortium that took over NRI might pick up the HRI establishments, for that would be a very comfortable and excellent fit, especially as one of the major campuses that has been developed by the university of Greenwich is situated a very few miles away from the East Mailing research establishment.
The final thing that worries me slightly about that proposal is that the East Mailing establishment is on land that is not in the public sector. It is owned not by the Crown but by a trust, and there is no great security of tenure for the establishment at East Malling.
In the interests of the horticultural industry in Kent—a very important industry in the garden of England—I hope that Ministers will hear what I have said today about the need to ensure that HRI is maintained as an integrated entity, whether in the public sector or ultimately in the private sector, and that its strength is protected through whatever change is proposed.
5.6 pm
Mr. Giles Radice: I am a strong, unrepentant supporter of the idea of a permanent, politically impartial, honest, accountable civil service with selection and promotion on merit, and I believe that such a civil service is one of the hallmarks of an advanced democratic society. As the Treasury and Civil Service Select Committee said, the British civil service is a great national asset, whose commitment to the highest standards of performance and conduct is a guarantee of constitutional and financial propriety as well as of good government.
Throughout the 20th century, especially in two world wars, the British civil service, as reformed by Northcote-Trevelyan, has served the nation extremely well. It has been used as a model by many other countries and, as Ministers know well, very often people come to see how we run our civil service because they think that its example is worth following.
It is true that any civil service needs to adapt to changing conditions, and from the 1960s onwards, with the Fulton committee, to which my hon. Friend the Member for Norwich, South (Mr. Garrett) was a consultant, there has been a series of changes. In the 1980s there were the next steps agency changes, and two thirds of the civil service is now covered by those agencies. From 1992 onwards, there were the market testing, contracting out and privatisation reforms.
In my short contribution, I shall make three points. First, I believe that there is a danger of an excess of ideology. I strongly support efficiency changes; I oppose permanent revolution. I strongly supported the broad principle of agency status; I saw it as a natural conclusion, or extension, of the reforms suggested by Fulton and by my hon. Friend the Member for Norwich, South. The purpose of the agency change was to improve service to the customer and citizen, to ensure devolved decision making and to improve accountability. These are excellent aims.
We on the Treasury and Civil Service Select Committee gave the reforms our bipartisan support throughout the late 1980s. The 1992 changes have not been carried out based on a consensus. On the contrary, it seems to me that market testing and contracting out have been used in a doctrinaire way—and they should not be. It also seems to me that the principle of cutting the number of people in the civil service is the wrong way to approach matters. Therefore, it is not surprising that there is a morale crisis in the civil service.
It is not just me saying that—it is reflected in the survey of members of the First Division Association and in a recent poll in The Observer. Any Government have to take this issue seriously—and I would have thought that the Government would take it much more seriously than they are. When we in the Treasury Select Committee asked for a survey of the members, the Government refused—and we drew our own conclusions from that.
Things have gone too far and the Deputy Prime Minister's Department has moved too quickly. It would be unkind to say that it is an old man in a hurry. There have been four privatisations in a short time and we have only just managed to save the Civil Service College. This is overdoing it. Recruitment and Assessment Services is a privatisation too far.
320
No one says that Recruitment and Assessment Services is not efficient. In fact, the Minister said—as far as I could understand his argument—that it is so efficient it should be allowed to expand in the private sector. No one has said that it has any impact on the public sector borrowing requirement. Indeed, I understand that when Lord Bancroft asked that question in the House of Lords he was told that the impact would be negligible.
This seems to strike at the heart of one of the key principles of the civil service: fair and open competition. In principle, it is inherently dangerous and unstable not to have recruitment to the civil service run by the civil service. It is not surprising that that was rejected by the House of Lords. I believe that this reform has no consensus behind it at all. It should be delayed until after the general election.
I refer to politicisation. It is not a question of political appointees in the civil service or Ministers appointing Tories to posts. When a Government have been in power for so long—as Lord Callaghan put it to the Treasury Select Committee—civil servants pick up the scent and begin to present Ministers with what they want to hear rather than with impartial evidence. That is unprofessional, and it is against the civil service code. Of course, a change in Government would help and it is not surprising that many civil servants would like to see another Government in power—not necessarily because they support the Labour party. They believe that a new Government would be good for our democracy.
Mr. Robert G. Hughes: This is a serious point and I recognise that the hon. Gentleman is characteristically putting it in a serious and logical way. However, is there not an inconsistency? With great respect to Lord Callaghan and to Labour Members, the Labour party has not been in a position to have received that advice. It is making it up—it does not know whether it is true. From personal experience and from the experience of my colleagues who have served in government, it is not true.
Mr. Radice: I am quoting—
Dr. Spink: Guessing.
Mr. Radice: No, I am quoting the First Division Association, the trade union of the civil service. It presented evidence to the Select Committee—it is not a question of hearsay; it is serious evidence. It is not good enough just to have a change of Government and to rely on that. Therefore, we should have a civil service code. I am glad to know that the Labour party believes that it should be put on a statutory basis. We need to protect civil servants by asserting the values of the civil service and by giving them an appeals system with an independent basis.
In the run-up to the election, I would like to hear the head of the civil service make it absolutely clear that it will not be used by the party in power in an unprofessional partisan way. I have heard of some incidents of this taking place, and I hope that it does not continue. I say this in all seriousness, as someone who wants to see the civil service remain impartial. I hope that Conservative Members take that point seriously, not in a partisan way—I do not mean to make it partisan.
The important issue of parliamentary accountability is raised by the managerial changes and we have not faced up to it. If we devolve powers, how do we ensure that the

321
agency heads and the agencies are responsible to Parliament? We are trying to grapple with that. As the Minister knows, the Treasury Select Committee suggested that agency chiefs should be able to account to Select Committees in their own right. This is already happening—although I accept that they consult their Ministers first.
As my right hon. Friend the Member for Bishop Auckland (Mr. Foster) pointed out, Scott has raised disturbing issues about accountability and civil servants not taking their duties and responsibilities seriously, particularly in the Foreign and Commonwealth Office, in the Ministry of Defence and in the Department of Trade and Industry. They are not seeing it as their duty to inform Parliament about what is going on and they are conniving with Ministers to keep Parliament and the Select Committees in the dark. That is not good enough. We need to assert our position in Parliament.
I am glad that the Select Committee is looking at the issue of ministerial and civil service accountability. I hope that we will be able to report before the end of the summer on these issues and that we will come up with something that may be of use to the Government and to the Opposition. If the Conservative party is in opposition after the election, it will want a proper code of accountability— it will be useful to it, too. I hope that we get bipartisan support for some changes.
The civil service is extremely important to this country and to our democracy. It is the duty of the Government and the Opposition to support the civil service and the values on which it is based. It is the duty of civil servants to assert those principles. If they do not, it will not be surprising if others start to ride roughshod over them.
In conclusion, the civil service is a great national asset and it is absolutely essential that we preserve it and develop it in the years ahead.
5.19 pm
Mr. Alan Duncan: I apologise to you, Mr. Deputy Speaker, and to the House for arriving after my right hon. Friend the Chancellor of the Duchy of Lancaster had begun his speech. Unfortunately, I was caught in traffic. However, I heard most of his comments and I followed closely his remarks about the Government's proposals regarding recruitment and career development in the civil service. I shall add very little to his comments except to respond to the observations of the hon. Member for North Durham (Mr. Radice).
The hon. Gentleman described the civil service as being in a state of permanent revolution. I do not see it that way. We are beyond the extensive and far-reaching reforms that were made to the civil service some 100 years ago. As the nature of the Government changes in order to perform different tasks, it is inevitable that the nature of the civil service should change also. I believe that most of those changes have been for the better and that they take into account the needs, desires, qualities and career prospects of civil servants.
We are extremely fortunate that people of the highest calibre seek careers in the civil service. The civil service is not bereft of talent: the selection boards can choose from a wide range of candidates. Many civil servants serve for decades with great distinction. We are also enormously fortunate—if only we knew all the facts—that our civil service is not tainted by corruption. Civil
322
servants all over the world are in it on the sly for money. That is not the case in Britain: over the years, few civil servants have been caught taking bribes or engaging in other illegal activities. Our civil service is of the highest standard and I think that civil servants should be more widely appreciated. Their good instincts should be nurtured—we must not take high standards for granted.
I wish to make several observations that have become more pertinent over the four years of this Parliament. My first concern is leaks. When I was a boy and a student of the workings of Government and of the civil service, leaks were a rare event and they were big news when they occurred. It is in the nature of politics that it sometimes serves politicians' interests to slip information into the public domain in some way. They do so in order to advance their cause or to gain some advantage in an argument.
We can usually tell when information is leaked for party political purposes. However, in the past few years, there has been an increase in the number of leaks that can originate only from within the civil service. They are easy to recognise because they do not advantage a politician from the Government party who is in dispute with another. Such leaks are becoming too prevalent. Civil servants—it may be only a few who are at fault—should adhere to the code of conduct which states that they must respect the secrecy of the information with which they are entrusted.
The media have an insatiable appetite for leaked information. As soon as the word "leak" is attached to a story, it becomes sensational. It adds an exciting ingredient to otherwise ordinary and mundane information. As the spin doctors would say, it gives a story legs.
Mr. Couchman: Does my hon. Friend agree that it is remarkable how often Labour Front-Bench spokesmen purport to quote from internal memorandums between Departments and between Ministers?
Mr. Duncan: My hon. Friend makes a valid point. Two parties are involved in leaking information: the giver of the information and its recipient. We often find that documents or information are not leaked directly to the BBC: they are usually leaked to the Opposition, who then give that information to the BBC. I think that the Labour party should examine its conduct and the way in which it uses the information that comes into its hands in that manner.
If there are leaks and if there is no measure of secrecy and confidentiality in Government, policy making becomes impossible. The Opposition have charged some of their Front-Bench spokesmen with the task of thinking the unthinkable. The Opposition do that already to a certain extent—although not very well—and the Government must do that as well. The thinking does not stop when a party gains office: policy making must continue. One cannot think the unthinkable, discuss, debate and throw ideas around to be digested and honed into policy if the discussion process takes place in public.
The argument for open government has become simplistic. We cannot have open government when it comes to policy formulation if we also want good, effective and decisive presentation of that policy. One cannot arrive at a coherent decision from a mess of

323
argument. The increasing habit of leaking documents mid-stream in the policy-making process is making the conduct of Government and the presentation of policy almost impossible. As the Opposition approve of whistleblowing—that is a popular new term—perhaps from time to time Labour Members will blow the whistle on those who leak documents to them which they then use for underhand purposes. We must be able to discuss policy, to argue and to differ about policy, and then to decide when policy will be made public. That is impossible if information may be leaked to a newspaper or to the BBC halfway through the process.
My second concern relates to the question of how some Government policies and legislation are implemented. The legislation that is passed in the House and becomes law is written in language that we consider to be appropriate to the circumstances. If we are honest, we must admit that our law-making process is not perfect. The process of examining legislation line by line in Committee is far from perfect. Many ill-thought-out turns of phrase remain in Bills which become Acts and are then implemented—quite properly in many respects—to the letter.
We have an exact culture of law making and implementation of that law. We do not express wishes in legislation: we detail the rules that should be followed. However, we cannot foresee all the circumstances in which the rules may be applied. For example, European Community directives are the product of a law-making culture that is very different from our own. The literal interpretation of the tiny details of law is becoming increasingly intolerable for many who must bear the consequences. There is growing exasperation about the overly literal implementation of regulation at all levels.
The courts may now assess legislation according to Parliament's express intention when it passed that law. In other words, judges may take account of the words used by Ministers at the Dispatch Box or in Committee. I believe that that is a pretty iffy process because it is liable to reduce the inclination to make legislation exact and black and white. We would be pegging our hopes on judges realising that remarks made in this Chamber might be taken into account. It is absurd to imagine that judges would read through Hansard and implement what was said.
The application of rules at an administrative level is becoming too rigid, particularly with EC directives, business regulations and the Health and Safety Executive. The man from the Ministry is not required to suspend all initiative when applying rules defined by the House. Initiative can still be deployed, so that the official can pass back up the line the express concerns of the people affected by the rules and regulations in question. The same applies to Ministers. An autobiography by a Minister whose name I have forgotten is entitled "Ministers Decide". Ministers decide less and less because more and more they are bound by rules, many of them from the European Union, and they no longer have the discretion to decide.
One example of the petty detail that is applied when implementing rules is export licences. Setting aside post-Scott paranoia, constituents of mine have produced examples of export licences that have taken six months to authorise. How can anyone export when a civil servant
324
takes six months to process a licence? That is a self-created brake on our export potential. I hope that my hon. Friend the Minister will consider whether the citizens charter standards cannot be applied to that function of the Department of Trade and Industry, to ensure that export licences can—for the benefit of productive British companies that want to sell overseas—be processed more efficiently. Many companies feel that they do not have an effective right of appeal against that inordinate delay.
Dr. Spink: Will my hon. Friend contrast the way in which we apply rules with French practice? Does he agree with the axiom that rules are for the blind obedience of fools and for the careful guidance of managers and officials?
Mr. Duncan: My hon. Friend is right, because in many cases the French ignore or avoid the rules altogether.
My final point concerns politicisation. The right hon. Member for Bishop Auckland (Mr. Foster) did not answer the question that I put in my intervention. If Labour entered office, it would immediately make a political appointment to the job of press secretary at 10 Downing street. Labour would—it has never said this in public, but in private briefings that could be denied—make ministerial offices have far more political appointees to them. The statutory registering of the political affiliation of persons appointed to public bodies is a step towards McCarthyite censorship, which is a dangerous path to tread.
There have been comments about Ministers moving from ministerial jobs to private sector appointments. The reverse, in terms of influence, could happen. The hon. Member for Hartlepool (Mr. Mandelson) must consider whether what is sauce for the goose is also sauce for the gander. Is it not wrong, at least in his terms, for the hon. Gentleman to have represented in the House the interests of the First Division Association of civil servants, then— hot on the heels of that responsibility—take the post of Front-Bench spokesman for the Office of Population and Census? If moving from a Government post to the private sector is the peddling of influence, why is not that which the hon. Member for Hartlepool has done?
5.33 pm
Mr. A. J. Beith: The debate is hindered by the fact that we did not have access to a series of parliamentary answers that affect the privatisation of scientific parts of the civil service in particular. That matter was raised by the hon. Member for East Kilbride (Mr. Ingram) and by me, in points of order. I must say at the outset that the Parliamentary Secretary, Office of Public Service could not have been more helpful in personally ascertaining why those answers were not available and delivering copies of such answers as were available to me because I could not leave the Chamber at the time. The Department of Trade and Industry must have known the subject of this afternoon's debate, so the long delay in making answers available is not at all satisfactory. Some of us were aware that the answers were to be given, but still they were late, while others are not yet to hand.
One of those parliamentary answers reveals that the Institute of Arable Crops Research, the Institute of Grassland and Environmental Research, the John Innes

325
Centre and the Silsoe Research Institute have all been identified as leaving the public sector, while a number of other institutes are identified as more appropriate for executive agencies within the public sector. Those matters are relevant to the debate, in which a number of privatisation candidates have been identified—even in the Government motion.
The hon. Member for Gillingham (Mr. Couchman) referred to the East Mailing research institute. I hope that Ministers will note that the hon. Gentleman had a number of reservations about what might happen, even though he does not oppose in principle a change in that institute's status. I remember that institute particularly well because my wife worked there as a student. It is one of a number of scientific centres that play an important part in ensuring long-term scientific research of relevance to industry, governed by long-term considerations rather than near-market, short-term decisions—which can more readily be financed on a short-term basis.
As to Recruitment and Assessment Services, the Government must be chastened not just by the defeat that they sustained in the other place but by the weight of informed opinion forcefully expressed in that debate. It must be significant that so many people with long experience of government felt that the RAS is crucial to maintaining the impartiality, integrity and reputation of the civil service. In the Minister's discussions with the Public Service Select Committee, I hope that he will constantly keep in mind what was said in the debate in the other place. I have no continuing interest in the Civil Service College, but I taught there many years ago— particularly at its then centre in Edinburgh. The Government have at least been forced to recognise how powerful would be the opposition to that activity being outside the public sector.
The prospect of privatisation is causing concern in many other organisations. My hon. Friend the Member for Newbury (Mr. Rendel) drew my attention to the Institute for Animal Health. With all the current international arguments about animal health, it is of great concern that that institute is a possible candidate for privatisation. Many such institutions are involved in international committees in which their counterparts are public service scientific bodies. We must be careful that our ability to make our case effectively in international scientific bodies is not impaired because it can be argued that we are represented by scientists from privatised institutions—perhaps commercially sponsored—rather than from organisations performing a regulatory role on behalf of the Government.
The constitutional issues are the other main focus of the debate. Gladstone said that the British constitution
"presumes more boldly than any other the good faith of those who work it."
Anxieties about the state of that good faith have been manifest. One party has been in office a long time, and it was led for a considerable period by a Prime Minister more noted for her determination to get things done than for paying attention to the processes by which they were done or the condition in which the system of government would be left when she finished. The attitudes cultivated during that period, which are summed up by phrases such as, "He's not one of us," were of potentially long-term damage to the public service. The present Prime Minister entered office with a desire to correct some of those
326
trends, but I am not sure that he has been entirely successful. We must therefore consider impartiality, codes of practice, and the accountability of Ministers to Parliament.
The Government were driven into a civil service code. I sat on the Treasury Select Committee with the hon. Member for North Durham (Mr. Radice) and argued strongly for such a code, but a series of other events eventually forced Ministers to recognise the need for one. Many doubts and anxieties about the code's effectiveness remain, particularly when civil servants have to go through the permanent secretary of their own Department before they can get to the first civil service commissioner.
When people fear that they may be impairing any future chance of promotion by drawing attention to what they feel is improper pressure on them to act in a particular way, they are loth to take such a step. There are people in many walks of life who are prepared to take their case to the limit and perform a public service by so doing, but not many of them benefit their careers in the process. We are often indebted to those who put their careers on the line, in the public service or in private industry, by being prepared to take their case to the limit; but they often suffer for so doing.
The FDA states that one of the main issues about which civil servants have complained to the association under the code has been requests for political briefings— briefings for Ministers to use at party conferences or for answering parliamentary questions. It requires some courage on the part of civil servants to take such complaints right to the top.
The Scott report gives us every reason to fear that the code by itself does not offer sufficient protection. The FDA quotes one cynical civil servant's suggestion that three drafts for answering parliamentary questions will be put before Ministers in future: a draft that accords with "Questions of Procedure for Ministers"; a draft that deliberately withholds information but does not knowingly mislead; and a draft that designedly leads Parliament to believe that one policy is in place when the overwhelming evidence is to the contrary—but does so unintentionally. We wait to see which draft the Minister will choose.
I find it difficult to understand how those who produced the summary of the Scott report issued by the Cabinet Office to the press could possibly have imagined that they were operating within the terms of the code. That summary was tendentious and grossly misleading; it deliberately excluded all items that might raise questions about what Ministers or civil servants had done or about what should happen in future. In no way did it uphold the political impartiality of the civil service.
It was one of the most damaging features of the whole publication of the Scott report that the Cabinet Office should have taken responsibility for a document that was so clearly party political in its purpose and that did not inform recipients of the burden of the report or of the conclusions that might be drawn from it.
The ethical questions that confront civil servants extend more widely than what we know as the civil service. We can no longer talk about a civil service ethic; we have to talk about a wider public service ethic that might apply to the agencies and non-departmental organisations which have taken over so many of the responsibilities of the traditional civil service. It could be argued that the same

327
is equally relevant to local government, which has developed its own way of tackling those issues, in the form of rules and codes, over a century of facing similar challenges. The public draw no distinction between those various public bodies when they demand fairness, competence, integrity, impartiality and the right to challenge decisions through the democratic process or via an appeals mechanism.
As Government functions have been contracted out to private agencies, the question has arisen: should not public service ethics be imported to those agencies for the carrying out of their functions? Defence contractors have long been subject to the Official Secrets Act 1911 in respect of the Government work that they do. How could any Government contemplate entrusting people's tax records to a private agency if its staff are not subject to civil service rules?
That dispersal of public service functions to a variety of institutions means that it no longer makes sense to talk of a code of ethics peculiar to the traditional civil service. The objective must surely be to encompass all the organisations in a code of ethics and to develop a mechanism to that end. That is why I expressed sympathy with the idea of a public services commission wider than the present civil service commission. We would propose a public services commission with a wider remit, responsible for the operation of the rules governing appointments and terms of service in national, regional and local government. It would be required to ensure that the principles of a politically neutral civil service, appointed on merit, were observed. We would want to insulate the commission from ministerial interference by having its membership determined by the new Public Service Select Committee of the House, to which it would report.
The commission could help the whistleblower's role, by investigating claims from members of the public service of breaches of the regulations governing its operation, and of improper conduct towards officials by Ministers. Such a role would be rather wider in our proposed format than one played by a civil service commission alone. Next steps agencies should be on a clear statutory footing, and the framework documents setting out how they work should also be statutory and considered by Select Committees.
I want also to refer to the wider question of ministerial responsibility, which has come up several times in the debate already. When we debated the matter on a Liberal Democrat motion on 12 February, the public service Minister said:
"While a Minister has full constitutional accountability to Parliament for everything that the Department does, it is manifestly impossible for him to take all decisions, or be personally involved in every action of his Department. It cannot, therefore, be sensibly suggested that a Minister is personally responsible for every action of his Department. It is worth stressing that distinction, because the terms 'ministerial accountability' and 'ministerial responsibility' have tended to be used interchangeably."—[Official Report, 12 February 1996; Vol. 271, c. 684.]
In my submission, they can indeed be used interchangeably because there is no proper distinction between the two terms. There is nothing for which a Minister is accountable to the House for which he is not also responsible to the House.
328
That is not to say that the House would hold a Minister personally responsible for a failing of which he had no prior knowledge and which did not result from his actions or failures. The House would hold him constitutionally responsible but might conclude that he could not reasonably be expected to resign. The classic example was Lord Whitelaw, who considered that he was responsible for the fact that someone got into the Queen's bedroom; but no one in the House thought that he should resign as an example to others. We clearly recognised that there was no fault on his part—and no fault in the setting up of the systems and procedures for which he might have been held responsible.
It is for the House to judge whether the extent of a Minister's responsibility is so personal, or whether an issue is so fundamental, that a resignation ought to be demanded. It is also for his colleagues in Government to consider whether his resignation should be exacted from him.
Mr. Couchman: I am fascinated by what the right hon. Gentleman is saying. Why, then, did some hon. Members the other day demand the resignation of the Home Secretary because of dirty equipment in a forensic laboratory?
Mr. Beith: Although I often demand the resignation of the Home Secretary, for reasons that I shall elaborate on in a moment, I did not do so on that occasion—although I thought it reasonable to criticise the Home Office for not ensuring that such tests were carried out with equipment that could be shown to be satisfactory. The Home Secretary, as hon. Members will hear, is crucial to my argument and I shall come to him in a moment.
I want to dispose, first, of the spurious notion—I am sorry to see it put about by a civil servant of the experience and ability of Sir Robin Butler—that there is a distinction between a Minister's responsibility and his accountability. The political process judges whether to exact the resignation of a Minister, but his responsibility remains the same at all times.
It is not just constitutionally repugnant but, in terms of modern management practice, inefficient to give people duties to carry out while leaving an aura of confusion about who is responsible if those duties are not properly carried out. There have been some terrifying examples of this in recent Government actions. From the day of the Westland case, when Lady Thatcher, the then Prime Minister, declined to accept the political consequences of what had happened or to discipline any civil servant for it, there opened up a gaping hole in our constitution. In such a situation, either a civil servant had acted improperly and should have been disciplined, or a Minister had given a civil servant instructions that ought not to have been given. In that case, the Minister should take the political consequences of so doing. That also applies to the Home Secretary. The greatest confusion surrounding the doctrine of ministerial responsibility has been created by Ministers who like an aura of fog and mystery around who is responsible for anything as it enables them to deny ever having been responsible for anything that is to their detriment.
A classic example is the Home Secretary, who interferes extensively in the policies and activities of the Prison Service agency. He defends doing so on powerful

329
grounds. He believes that there is a public interest in his intervening to make sure that a particular governor is removed or to decide what the salary of a particular governor should be. In at least some cases, he can probably sustain his argument. However, he cannot then say that anything that goes wrong in the Prison Service cannot be his responsibility as he is concerned only with broad policy.
Not only do Ministers make specific interventions that may lead to mistakes for which they subsequently disavow responsibility, but agency staff know that they are expected to act in ways of which of the Minister would approve and the Minister's periodic interventions serve to reinforce that belief. The pretence that the Government have created a cocooned series of institutions in which Ministers' interventions are confined to the broadest matters of policy—clearly understood and easily set down on a piece of paper—is unsustainable. The doctrine of ministerial responsibility and Ministers' accountability to the House is being destroyed to protect individual Ministers in particular circumstances.
Under every Government of any party, Ministers will come to Dispatch Box and attempt to explain away a particular action and their responsibility for it. We all know that we have to deal with that and join the political argument. However, it is not acceptable for a Government to destroy the entire doctrine on which Ministers are held responsible to the House to protect individual Ministers in particular circumstances. That is exactly what they are doing when they pretend that agency status allows Ministers to insulate themselves against the day-to-day operations of Departments. That is not the case. As long as Ministers engage in such intervention, they preserve a culture in which it cannot be true. The Minister's explanation of the doctrine of ministerial responsibility in the debate on 12 February maintained that fiction and furthered the damage that has already been done.
We need a whole series of reforms to protect our civil service from being further damaged and undermined. The most obvious requirement is a freedom of information Act so that the public will know when decisions were taken on the wrong basis and we will not need a Scott inquiry, except in those circumstances—which were present in the Scott case—into which a freedom of information act cannot reasonably extend as they involve intelligence and security matters. It is also vital that even now, while the Government are still in power, they do something to rescue a doctrine on which they will want to rely when they occupy the Opposition Benches.
5.52 pm
Mr. Robert G. Hughes: Just when one thought one understood a point that the right hon. Member for Berwick-upon-Tweed (Mr. Beith) was making, he would contradict himself so that his speech became completely opaque. When he studies Hansard tomorrow, at least privately, he will be forced to accept what I say. However, he is a Liberal, and one expects that from Liberal policy formation.
I shall make three points. First, we need an open civil service. People need to know what the civil service is doing, how it is doing it and what the guidelines are. Of course, civil servants need to know what their responsibilities are and what the guidelines are. Therefore, the code that has been discussed is most welcome, particularly in the way that it has been put together— with consensus.
330
Everyone knows what the code is, as it is published. It is characteristic of the Government to publish information that has not been published before and to acknowledge organisations such as Cabinet Committees that past Labour Governments were not prepared to admit existed. However, to put a legally enforced code on the statute book would achieve absolutely nothing. It would be a field day for lawyers—and for barrack-room lawyers as well—but it would achieve nothing constructive, and would damage the institution that it was supposed to serve.
Mr. Derek Foster: Will the hon. Gentleman confirm that the Government were against the code for a long time?
Mr. Hughes: The right hon. Gentleman will accept that the Government said that most of what is now in the code was already in place. That is why, at the time, some far-sighted Ministers accepted that a code should be published.
Secondly, we need a civil service that recruits the best, and fairly promotes them. It is reasonable to say that the civil service has a pretty good record in recruiting and promoting women. However, I am not suggesting that it is perfect.
Mr. Garrett: Except permanent secretaries.
Mr. Hughes: The hon. Gentleman says from a sedentary position, "Except permanent secretaries." I am not sure whether that is true.
Mr. Garrett: How many are there?
Mr. Hughes: There is one specific permanent secretary, others have the rank of permanent secretary, and there are many others in deputy positions. The position is improving. The hon. Gentleman is entitled to his view, but I believe that the systems are open, and the recruitment of good-quality women civil servants is going very well.
I am also pleased that the civil service continues to attract an increasing number of people from our black and Asian communities. It is by no means good enough yet. I hope that, before my hon. Friend replies to the debate, his civil servants will inform him of the points that I am making.
Mr. Garrett: Where is he?
Mr. Hughes: We all have to leave the Chamber sometimes. I hope that my hon. Friend will be able to say something about the further progress that is being made in that regard.
One problem is that people from black and Asian communities do not have role models in the civil service to make them regard it as a place where they would succeed in making a good career. That is a real stumbling block. I recall being told by RAS that one of the reasons why there were not many black or Asian people in the fast stream entry for a particular year was that those who applied were not good enough. So I went through the applications, and RAS was right. We have to find a way to provide role models to attract bright young black and Asian people into the civil service.

331
Thirdly, we should have a civil service that serves the Government loyally, but is able to serve any Government. More nonsense has been spoken about that than about anything else in the debate. Although I recognise that the hon. Member for North Durham (Mr. Radice) was not making a specific party political point, it demonstrates that, because the Labour party has been out of power for so long, it is completely out of touch. Some in the civil service trade unions will also seek to make that point, but I simply do not believe it to be true; nor is it true in my experience.
I had no idea about the politics of the civil servants with whom I came into contact as a Minister, nor did I want to know. However, I knew that some of the civil servants in senior positions had served loyally in the private offices of Ministers in the last Labour Government. I was also quite clear that the people who served me and other Ministers would be able to serve an incoming Labour Government with equal loyalty. That is what counts. I know that the Labour party doubts that, and thinks that the civil service has been politicised. I have heard some disgraceful remarks.
Mr. Peter Mandelson: The hon. Gentleman protests too much.
Mr. Hughes: With respect to the hon. Gentleman, the reason why I protest is that he has made some disgraceful remarks on the Floor of the House in previous debates.
Mr. Mandelson indicated dissent.
Mr. Hughes: Oh, yes. He has suggested that the civil service has been politicised, of which he should be ashamed—but he is not. To suggest that is a calumny not on the Government but on civil servants.
One reason why the Labour party thinks that the civil service has been politicised is evident in local government. The Labour party does not understand the difference between politicians and council officers. That is why there is such switching between Labour councillors and officers and councillors in one authority and officers in another. That is not good enough. It is dangerous nonsense if the Labour party thinks that that is the way in which the civil service should be run.
We have heard much talk about advice given to Ministers and which answers are given to questions. If Labour Members think that things have changed under the Government, they should read the book "How to be a Minister", by the right hon. Member for Manchester, Gorton (Mr. Kaufman), which is as true now as it was when he wrote it after leaving the previous Labour Government.
Let us be clear: Ministers are politicians; they give political answers. Civil servants give the information on which those answers are based. The Minister is responsible for the answer, and if the answer is highly political, it is because the Minister has chosen to give such an answer. That has always been true, and always will be. To suggest that somehow politics will end and answers will be based merely on information provided by the civil service is nonsense.
332
The speech of the right hon. Member for Bishop Auckland (Mr. Foster) proved that the Labour party is the captive of the unions. It can move sideways or backwards, but it has no mechanism for moving forward. It will not dare to be radical about the civil service, for fear that it would further widen Labour rifts.
Of course, Members of another place who were senior civil servants or Ministers years ago think that Recruitment and Assessment Services is essential to preserving the civil service's integrity. Indeed it used to be, but thinking that is a throwback to many years ago, when, if one wanted to recruit a junior secretary or a clerk to any far-flung branch of the civil service, one had to go to the Civil Service Commission.
Mr. Garrett: No, one did not.
Mr. Hughes: It is not like that any more. That is what those in the other place believe. Characteristically, the hon. Gentleman thinks that he knows better. The service is not needed. It has talented staff, and such talent should be more widely available. Of course, those staff will do well in the private sector. Many of the organisation's trumpeted successes have been achieved because it employs private sector headhunters to bring in people they want to recruit.
All large organisations have to tackle the enemies of change. We have heard the speeches of such enemies from the Labour Benches. It is suggested that many dragons have to be slain—traditionalists, xenophobes, devil's advocates and technophobes. I do not think that there are any dragons to slay in this debate. We have heard speeches from the same old Labour carthorse—not a dragon, but one old carthorse. For all its new Labour razzmatazz, the Labour party cannot disguise the fact that that carthorse is out of date, does not think very clearly, moves too slowly to be of any use, and is terrified of change.
This debate goes to the heart of why new Labour is simply a sham. In a fast-changing world, Labour would have us believe that the civil service is the only thing that should not change. Britain has a dynamic and growing economy because our private sector has grasped change, and much of it is thriving on that change. A civil service that does not change will ossify and die. My right hon. and hon. Friends in the Office of Public Service have grasped change, made the changes and preserved the essential integrity of our civil service. They should be congratulated on that, not criticised.
6.4 pm
Mr. John Garrett: It is a gross discourtesy that there is no Minister on the Front Bench to reply to the debate. If that is a trend, it is quite deplorable.
For the past 30 years, since I was a consultant to the Fulton committee on the civil service, I have worked in, worked for, written about and generally shadowed developments in the civil service. In recent years, I have done so with mounting dismay. In addition, I have a constituency interest, since more than 2,000 of my constituents are employed as civil servants in scientific research establishments, Her Majesty's Stationery Office and the CCTA.
I have seen nothing less than the literal disintegration of the civil service. Twenty years ago, there were about 25 mainstream Government Departments in the civil service.

333
Each was responsible for policy and its implementation. From the Minister and permanent secretary and the policy decision, to the delivery of service to the citizen through local and regional offices, there was a fully integrated national civil service.
We are now well on the way to a disintegrated Government, consisting of 25 headquarters Departments, more than 120 agencies, 4,000 quangos and countless private contracts. That conglomerate structure makes for inadequate control, as many policies cross unit boundaries. It will end the concept of a national civil service, and it wrecks parliamentary accountability, because Select Committees cannot keep track of such a large variety of executive and policy organisations. Quangos and contracts encourage too much patronage. The disintegrated structure will massively complicate performance measurement and appraisal, and lead to wide variations in the quality of service.
It is true that the civil service of years ago was too hierarchical, with administrative mandarins lording it over professionally qualified specialists and executive-class managers. There was far too little scope for upward movement for talented people who did not have the right social and educational qualifications. That is still largely true. The civil service maintains the discredited and elitist administrative fast stream, which guarantees a route to the top for Oxbridge arts graduates—white, male, public school Oxbridge arts graduates—while boasting of its progress in the development of management and opportunities for managers.
I cannot see any justification, if there ever was any, for an administrative fast stream. When the Treasury and Civil Service Committee considered the matter, civil service management said that the administrative fast stream in the civil service was no different from graduate entry arrangements anywhere else. The management used arrangements at British Petroleum as a comparator.
I worked for British Petroleum for a number of years, and noticed how it was possible for an accountant or an engineer to get on the company's board. It is far more difficult—in fact, virtually impossible—for an accountant or an engineer to become a permanent secretary in Britain, even in a technical Department such as the Department of Trade and Industry. Top management in the civil service is still recruited as a political secretariat and not as a management cadre, as Fulton pointed out 30 years ago.
I have always been impressed by visits to the Ecole Nationale D'Administration in Paris to examine the formation of the French higher civil service, especially its output of people who combine political, economic and technical skills. That professional civil service has ensured France's success in the past 25 years. It is unbelievable that ENA has half a dozen professional staff, and that most instruction is carried out by serving top civil servants, who consider it an honour.
ENA is criticised in Britain as elitist, but in fact it is much less elitist than our system, because its entry arrangements allow junior civil servants to qualify and progress thereafter. The arrangements also allow for mature entrants who are aged about 40. Its top management cadre is not confined, like ours, to a particular social background.
I have always considered Sunningdale a white elephant. An enormous amount of money has been spent on it. One could call it an Oxbridge college with rhododendrons.
334
It is totally divorced from the way in which the rest of the country is run. It would be far better for civil servants to be trained in Glasgow or Liverpool and to get some acquaintance with de-industrialised Britain. They should be action-trained in finding solutions to the problems faced by our fellow citizens.
The particular scandal of our disintegrated Government service is the quango. However, there is a certain amount of sense in having agencies. They were proposed by Fulton in 1968 as budgetary responsibility centres within Departments, and the idea was further developed by my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) and myself in a Fabian pamphlet of the early 1970s called "Administrative Reform—the Next Steps". That is why, I assume, the agencies are called "next steps" agencies.
However, the information systems required to establish the managerial accountability of those agencies were never put in place, although they were needed to measure not only their operational efficiency but, much more importantly, their effectiveness in meeting public needs. The most obvious example of that lack of effectiveness is the Child Support Agency, where performance in respect of clients is nothing short of a disgrace.
What is needed is a system in which civil servants are originally employed in agencies, and are then promoted on merit to the policy division of the parent Department. That would close the experience gap between operations and policy-making.
Some, perhaps many, agencies are merely stages on the way to privatisation, as HMSO in my constituency has been. We have discussed HMSO several times recently, so I shall not dwell on the issue. However, the fact is that an effective operational arm of Government and Parliament is likely to suffer grievous damage as a result of privatisation, with massive job losses. Speaking as a House of Commons Commissioner, I believe that there is absolutely no guarantee of the long-term maintenance of services to Parliament. That could lead to the greatest embarrassment to Parliament in future. The privatisation will, I believe, be seen to be a mistake.
I am glad to see that the Minister is back in his place. Can he tell us about the future of the CCTA, which is also in my constituency? Will it be privatised, and what will be the likely consequences for computing expertise in Government?
I do not have the time to discuss public sector research establishments, as I wanted to do, partly because the information arrived so late. Here we have a number of scientific research establishments which have made a tremendous contribution to scientific policy-making, to discovery and to innovation. We now read that the presumption is for privatisation. That will lead to the disbandment of some of the finest research establishments in western Europe, with no gain for the public.
The growth of the quango has often been commented on. Essentially, quangos involve a function of Government, funded by Government, being carried out by a corporate body, the board of which is constituted by the patronage of a Minister. Training and enterprise councils are a good example. I cannot see how such organisations can be allowed to continue so free from democratic control in a democratic form of government. I trust that a Labour Government will reintegrate the quangos into

335
central and local government wherever possible, and that they will make their boards and their recruitment practice as open as possible.
It has always seemed wrong to me that the governance of the civil service should be under the royal prerogative, without statutory force. The White Paper contains a remarkable observation on that issue:
"The management of the Civil Service is one of the aspects of the Prerogative which is exercised by Ministers on behalf of the Crown … The Prerogative in this context resembles the power of other employers to employ without special legislative authority."
Employing civil servants is different from other employment; after all, they serve the Crown. The use of the royal prerogative gives them virtually no redress for a series of possibly adverse decisions against them. The most obvious is the ban on unions at GCHQ. We have a so-called code of practice which still does not cover major issues, such as the relationship of the civil service to Ministers, Parliament and the public.
The responsibilities of civil servants are specified in code and memoranda, not in law. The relationship of civil servants to Parliament and its Select Committees is specified in the Osmotherly rules—which, on the whole, say, "Don't say anything"—and not in law. The conduct of Ministers is laid out in a Cabinet paper which has no statutory force.
It is clear that we need a civil service Act which defines a civil servant, sets out the duties and responsibilities of civil servants to the Crown and to Parliament, and provides redress against the abuse of power and deception by Ministers. The penumbra of secrecy which surrounds so much of our policy-making—which Ministers, especially in this Government, so eagerly exploit—should be ended, or greatly reduced, by a freedom of information Act.
When we have debates on the civil service, we concentrate on the higher or senior civil service. But the greatest impact from loss of status, insecurity, loss of terms and benefits and outright redundancy has been on the junior levels of the civil service. They have suffered the most. Many have served on low pay which has been subject to income policies for years, and have been rewarded with redundancies and reduced terms and conditions.
The fact is that this Government despise their employees; that is why they treat their most junior employees so badly. There has been constant insecurity and lack of consultation. In HMSO, CCTA or the soon-to-be-privatised research establishments, the tremendously significant factor has been the lack of consultation that any decent employer would carry out with its employees. We had a civil service of which we could be proud. Now we have a civil service dominated by uncertainty, insecurity and plain disintegration.
6.15 pm
Dr. Robert Spink: It is an unequalled delight for me to follow the hon. Member for Norwich, South (Mr. Garrett), especially when he is talking about Cambridge. I recall that the previous time I followed him in a debate was across the floor of the Cambridge Union. He will remember that the debate concerned the economy, and that that evening, my side won the debate resoundingly, I am delighted to say.
336
I must make it clear that my constituents yearn for smaller government, whereas the Labour party—we have heard this all today—seeks bigger government. My constituents want smaller government in all its forms. They want less interference at all levels, whether regional, central or, particularly, European.
My constituents seek lower public spending as a proportion of our national wealth, because they see that as the way in which to continue to generate real wealth so that we can make the necessary investment in health and education, and so that we can care better for the people who are truly vulnerable. My constituents also see that as a way in which to reduce taxes which, in itself, will enable us to develop the enterprise economy that we all seek and which the Government have now at last delivered.
Lower public spending, lower taxes and smaller government in every way—that is what my constituents want. They also want a smaller civil service, because that comes with the rest. They want a more effective, more responsive and, in particular, a more customer-focused civil service.
Any debate on the civil service must be prefaced by the unequivocal statement that the British civil service is the best in the world. It has the highest level of integrity and the highest ethics; it is the least corrupt in the world. It is completely impartial. I was sorry to hear what the hon. Member for North Durham (Mr. Radice) said, because he was entirely wrong. The civil service is impartial, and he cast aspersions on it by suggesting otherwise. As a Parliamentary Private Secretary at the Home Office, I can assure the hon. Gentleman that I have worked closely with civil servants. I have noted that they are entirely impartial in giving advice to Ministers.
British civil servants have an impeccable record; they have great traditions and great credentials, and we must applaud that. However, having accepted all that, I now turn to the traditions, organisation and culture of the civil service. I want to review, somewhat philosophically, how the civil service operates, and how it delivers service to the public. I do so not to criticise or threaten the civil service, but to explore ways in which it can move forward, adapt and change, and to gently remind it whom it serves.
It could be said with some justification that the civil service management culture is sometimes a little too much based on tradition. In some spheres, it is sometimes a bit staid, although not in all. In some, there is magnificent. forward-looking practice, but risk avoidance is the phrase of the day in others—where one watches one's back, and where managers do not take brave and innovative actions. That type of culture can permeate right the way through those branches of the civil service.
I must say that tremendous strides forward have been made in the past 10 years. That is one reason why I welcome the Government's initiative today, to continue those improvements and to strengthen the civil service through training programmes—particularly the master of business administration programme, the best of which is offered in partnership with Crownfield university, an institution with which I have had more than a passing acquaintance.
I welcome the training review promised by the Minister today and the Government's "investment in people" programme, which is most important. I hope that some real progress will be made with those in future years.

337
I welcome the Government's initiative to impart new and modern disciplines. It includes contracting out, market testing, and, of course, bringing in payment by results when that is appropriate.
In this debate, I should like to focus on communication and on the civil service's management and organisation culture, because those are central to the success of any organisation—certainly to the civil service—in achieving its objectives. Today, hon. Members who belong to the all-party parliamentary group on management were told— at a meeting admirably chaired by my hon. Friend the Member for Taunton (Mr. Nicholson)—by Christopher Roebuck, the director of Cattle Consultancy, how important and central is communication. I should like to follow that theme.
Senior civil servants can very easily lose touch with the daily operations of their offices. They can be under enormous pressure from their political masters—their political customers—the hon. Members of this place. It is possible that those civil servants might take their eye off what is happening to their other—I believe more important—customers: the public. In short, they can easily lose sight of the heart of their business and lose focus on what their objectives should be and on how and whether those objectives are being achieved at the coal face.
My simple proposition is that front-line, support and administration staff do not lose touch. They often know very clearly what is best, what is happening and how to make the organisation more effective.; but, for their knowledge and skills to be useful to the organisation, they must operate in a culture in which their message can be heard and in which they are free and willing to give that message. I am not talking about specific incidents of whistleblowing or anything so specific; I am talking about the organisational culture, and the way in which the daily operations are run.
We must strengthen the link between professionals, senior management staff and the workers who deliver services—direct and face-to-face—to the public. That objective will be achieved by improved communication. It is as simple as that. But communication is, of course, a two-way process, and it is not at all simple.
I believe that downwards communication in the civil service is extremely effective and professional. The issuing of instructions, orders, rules and regulations is the nature of it, and they do it extremely well. Upwards communication—from workers back to management—in some spheres is a little less obviously good, if I may put it so gently. Upwards communication needs to have a very conducive and well-developed culture and climate to work well.
Cranfield university and Manchester business school are now carefully developing communication methods for those who will become top management and professional leaders. But perhaps we should think of ways of developing strategies, techniques and cultures in the established middle and senior management levels in the civil service.
Those managers must listen carefully to junior civil servants, who deal with the public, and they must encourage good communication. That does not mean a drink at the annual Christmas party or the grand walk-through and a back-slap once a month, as the top brass goes wandering through the office, saying that that is how they keep in touch with the workers. That is not the way to do it.
338
Communication means real listening. Listening is a difficult skill to acquire, but it is one of the key ingredients in inspired leadership. One must listen. Improved upwards communication can lead to improvement in the civil service's efficiency, particularly in the way in which it is perceived by the public, who rely so much on it.
I am not advocating employee empowerment or total quality management. Those concepts are not my game in this debate, although I do not dismiss them. My experience is that giving increased responsibility to those who do the work most often works very well, provided that it is done properly. I am not advocating those concepts today.
Leadership is not simply a question of running in front and hoping and expecting that everything will follow behind in an orderly and efficient manner. Leadership, good or bad, is given effect by communication in both directions, up and down—motivating and listening.
The civil service must continue its move into the modern era of management—which this Government are promoting with greater success than any previous Government of whom I have experience. The civil service must be prepared to change and to review and renew its objectives and the methods that it applies to secure those objectives. In short, it must become a more user-friendly organisations for all our constituents.
I am not saying that change for change's sake would be helpful or that the civil service's traditions and culture should be dropped or changed tomorrow. Nothing could be further from the truth. Much in our civil service is excellent and world-beating, and those aspects must be retained, built on and developed. Even some of the civil service's quainter, more charming or even idiosyncratic methods have their place and their great strengths. Change should be embraced only when it is absolutely clear that that change will deliver real and worthwhile benefits— particularly to the public.
I congratulate hon. Members on the very high quality of this debate. I congratulate all those who work in the civil service—those at the coal face and those in the top brass—on the high quality of their work. I have spoken a little about communication. The essence of good communication is, of course, listening—so I will now sit down and listen.
6.27 pm
Mr. Peter Mandelson: The debate has rightly ranged widely across many developments in the civil service, including those in the senior civil service and in relation to the new code, which came into effect earlier this year. I agree with the First Division Association—with which I am proud to have had an association in the past—that it is a useful step in the right direction. Like my right hon. Friend the Member for Bishop Auckland (Mr. Foster), however, I agree that the code would be better if it were placed on a statutory basis. It should have a statutory footing, as should a freedom of information Act, to which we are also—quite rightly— committed.
Not surprisingly, the debate has focused on the latest examples of the Government's privatisation lust, especially on the privatisation of Recruitment and Assessment Services—or RAS—an organisation more appropriately christened in happier times for the civil

339
service. We should judge whether this and similar measures have any merit by reference to three questions: will they make the civil service more efficient, will they do anything to restore the battered morale of the civil service, and will they make Government policy failures any less likely in future? The answer to all those questions is, with the common consent of everyone with any experience of the civil service, a resounding no.
Nowhere is that more obvious than over the proposed privatisation of RAS, which touches on one of the core pillars around which the civil service was created, namely the recruitment of politically neutral and impartial officials in whom the public and Parliament can have complete confidence. I make no apology for focusing on that matter this evening.
Recruitment is basic to the whole standing and performance of the public service, but barely any attempt has been made to justify the privatisation in terms of its usefulness to the civil service or the public. What benefit could there be to the civil service of a big private sector headhunter taking over its recruitment?
The private sector headhunter will have no background, practice or expertise in the work of the civil service and the qualities that one looks for in senior civil servants— indeed, in all civil servants—are different from those in the private sector. That is not an adverse comment on the private sector; it is simply an observation of fact. Of course, management skills are increasingly important in the public service—I readily acknowledge that—but, at senior levels of the public service, the motivation is different from that in the private sector. Great value is attached to intellectual integrity and the ability to weigh both sides of an argument as well as to work in a collective and non-competitive atmosphere. Working in the private sector, on the other hand, is different from what is involved in working with Ministers—and some would say that that is a very good thing, too.
What benefit is there to the civil service in RAS, or any other agencies for that matter, being able to extend their operation to wider commercial markets? There might be something in it for the private sector individuals involved in that it will enable their favourite private sector clients to pick the best public sector talent thanks to their access to RAS records. However, it is a monumental irrelevance to the operation and effectiveness of the civil service. I believe that it is potentially damaging, too, as I shall argue.
Why, then, are the Government proceeding with this privatisation? I offer three reasons: because it is there; because the Deputy Prime Minister feels like it; and because the Government want to notch up further scalps. [Interruption.] That may be good enough for the hon. Member for Harrow, West (Mr. Hughes), but it is not good enough for the civil service or the public.
Let us be clear that this privatisation will not provide any better services to the public. It will not put another policeman on the beat, create another hospital bed or put a one extra qualified teacher into the nation's schools. It is little wonder that the proposal has not a scintilla of public support. By all accounts, even the Chancellor of the Duchy of Lancaster is remarkably unenthusiastic about the measure, despite his attempt at flag waving in
340
support of it this afternoon. We have to understand how the decision to privatise RAS was taken in order to understand his lack of enthusiasm.
I believe that it was the Chancellor of the Duchy who said in December 1995 that he had appointed Coopers and Lybrand merely to "study" the options for the agency. No sooner were the words out of his mouth than his departmental underling at the time, the hon. Member for Orpington (Mr. Horam), announced that it would be privatised as soon as possible in 1996 via a private sale. That was certainly an embarrassing rebuff for the Chancellor.
As hon. Members have remarked, the arguments in favour of the privatisation are at best specious and at worst non-existent. They simply serve to extend the Government's time-honoured, worn-out dogmatic belief that everything public is bad, everything private is good and that public services become good only when they have been privatised.
Dr. Spink: Will the hon. Gentleman favour us with a list of privatisations that a future Labour Government, were we unfortunate enough to have one, would reverse?
Mr. Mandelson: If this was a debate about all privatisations I might do so, but it is a debate about a specific privatisation against which I am arguing.
What of the putative safeguards for the civil service following privatisation, which were advanced rather weakly by the Chancellor this afternoon? We were told that the actual selection of recruits would continue to be in civil service hands. That might be so ultimately and technically, but what about the prior stages of processing and testing? How would the principles of selection by merit and fair and open competition be safeguarded once the agency had passed into private hands? Perhaps the Parliamentary Secretary, Office of Public Service can tell us that.
Apparently, civil servants will continue to have only an indirect involvement in—not control of—the preparation of some but not all exercises to ensure that they are a true "reflection" of civil service work. However, there will be no central co-ordination, no protection of confidentiality, no leak proofing or other security.
What about enforcement of private sector contracts if the measure goes ahead? The answer is that Departments will "monitor" the contracts as they go along. In the background, we gather, is the notion that the performance of the private owner will be subject to—wait for it— periodic audit. Will there be an ultimate sanction if contracts go wrong? Apparently, the simple desire to win future contracts will be a powerful encouragement to perform well. I hardly think so. All in all, the Government's idea of enforcement amounts to little more than a small feather duster to keep the private owners in line unless, of course, the threat to cancel a contract altogether is carried out. No one, however, has a suggestion as to what the civil service and its fast-track recruitment would do then—presumably it would hand out leaflets in the street.
As so many senior and experienced Members of the other place argued in a debate in March, the whole exercise is completely contemptible but, tragically, it is quite in keeping with the present Administration's destructive attitude to the civil service.

341
No one who comes into contact with civil servants could fail to admire their professionalism, tenacity and commitment to the job. I have to tell the hon. Member for Harrow, West that we are not criticising members of the public service when we attack what is happening inside the Government machine—we are criticising members of the Government who are responsible for inflicting such wanton damage on the civil service.
Mr. Robert G. Hughes: That is not good enough. The hon. Gentleman must reread in Hansard the previous speeches that he made from the Front and Back Benches in which he specifically accused civil servants of acting improperly, not by name but in general terms. He is not attacking the Government by doing that, as he seems to believe: he is attacking civil servants who cannot answer back.
Mr. Mandelson: The hon. Gentleman is absolutely wrong. I have never said that civil servants act improperly. I have, however, suggested that Ministers are guilty of enticing and encouraging them to act improperly, which is quite different. Conservative Members may rejoice in their temporary colonisation of the civil service, but it is bad for Government when Ministers seek to reduce the public service to a rump, there only to reflect the Government's political prejudices. When that is allied to asking civil servants to distort or suppress information or statistics that are inconvenient to Ministers or to accept the blame when things go wrong because Ministers will not take responsibility for their failures—one thinks of the prison service, the Scott report or the Child Support Agency—a bleak picture emerges of eroding standards and morale in the civil service.
It is not surprising that many civil servants feel undervalued and undermined. For that reason, we should not be debating changes to the recruitment agency today. We need urgent action to restore a public service whose problem is not recruiting good members, but losing them once they have joined and become thoroughly disillusioned.
If we were to go outside the Chamber and engage a passer-by in conversation, we would find much that would interest him or her about our debate today. People are understandably and properly concerned about the state of our public services and about what is being done in their name. They are concerned about the quality and ethical standards of those employed by their taxes to act in their name and to deliver their services.
The inadequacy of many public services on which our people and their families depend, the lingering mistrust of officialdom, the notion that people have little say over the powers that be, and even perhaps a general awareness that the traditional standards seem to be under threat are all of great concern to the people whom we represent, and we should have focused our debate on those concerns this evening. But the last thing on their minds—in fact, I cannot see that such a thing would ever cross their minds—would be the idea that any of their practical concerns might be addressed by the privatisation of the civil service Recruitment and Assessment Services, the Occupational Health Service Agency or Horticultural Research International, to which my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) and the hon. Member for Gillingham (Mr. Couchman) referred.
342
Those are the obsessions of a Government who can think of doing nothing more for the quality of our public services and for the standards, performance and morale of civil servants than to pursue these tawdry and mean-spirited privatisation measures simply to satisfy their own lust. That is the message that we must take from the debate. The Government, in attempting to prove that they have not run out of steam, are presenting us today with the political equivalent of a campfire kettle, brewing up a thin and tasteless brew that no one wants to drink. That is why their pathetic measures should be rejected and why we should ask the Public Service Select Committee, as our amendment states,
"to conduct a thorough independent review of all recent Civil Service reforms"
so that we can achieve the public service that we deserve and need. I invite the House to vote for that tonight.
6.44 pm
The Parliamentary Secretary, Office of Public Service (Mr. David Willetts): I begin by assuring the hon. Member for Hartlepool (Mr. Mandelson) that our reforms are not motivated by lust. Many arguments are made about the motives for our reforms, but I have never previously been accused of being motivated by lust when it comes to public sector reform.
The debate has focused on an issue—the ethics of the civil service—raised by the right hon. Members for Bishop Auckland (Mr. Foster) and for Berwick-upon-Tweed (Mr. Beith) and by the hon. Member for North Durham (Mr. Radice), the Chairman of the Select Committee who, I understand, cannot be here for the winding-up speeches. If the Government were in any way guilty of politicising the civil service, it would be inconceivable that we would have produced the codes, the guidance and the independent arrangements for the civil service commissioners that we have introduced in the past five years.
When I was serving as a civil servant, we had nothing like the code of conduct that is now issued to every civil servant. The code makes clear the ethical basis on which civil servants are expected to operate and sets out more clearly than ever what a civil servant can do if he is in any way unhappy with his circumstances. We have produced so much guidance and so many codes of conduct, and so much has been brought out into the open that was not available before, that we recently produced guidance on guidance. I cannot understand why the Opposition believe that somehow we need even more published guidance and codes of conduct. That is exactly what the Government have been doing in the past five years. We have brought a new transparency to the monitoring of public services of a quality that did not exist before.
Mr. Garrett: No Opposition Member has argued for more guidance, publications or codes of practice. We asked for an enforceable system, established by statute.
Mr. Willetts: The civil service code states that if a civil servant believes that the response that he has received to a complaint
"does not represent a reasonable response to the grounds of his or her concern, he or she may report the matter in writing to the civil service commissioners."

343
The role of the commissioners, who are now responsible for hearing and determining appeals under the new code, is close to a statutory right.
The hon. Member for Norwich, South (Mr. Garrett) asked about training in the civil service, and delivered a speech that I am sure he has been giving ever since he served as an adviser on the Fulton report all those years ago. The hon. Gentleman has only to wait a couple of months for the training and development White Paper that will set out an ambitious programme of reform of civil service training and will set out how the Government's objectives of achieving investment in people and standards across the civil service will also raise the level of skills, particularly in the areas that he has been calling for all these years, such as science and technology. We will ensure that there is more use of relevant qualifications in the civil service, such as national vocational qualifications, accountancy or personnel qualifications. We will ensure that the civil service is better qualified in those technical areas to which he drew attention. That is an area that the White Paper in July will address.
Mr. Tony Marlow: I apologise for having missed most of the debate, but this is an important issue. When I was in Her Majesty's services, I had to sign the Official Secrets Act. If one had confidential or secret information, it was more than one's life was worth to give that information to people who were not entitled to it. Increasingly these days, there are leaks from the civil service, and these are often politically motivated. Will the Government introduce a proper code of conduct so that any civil servant who rats in this way loses his job and his pension rights and is sent out without any ceremony?
Mr. Willetts: My hon. Friend the Member for Rutland and Melton (Mr. Duncan) also raised that subject in his speech. My hon. Friend is quite right that leaking confidential information has no role in the modern civil service, as the hon. Member for Hartlepool made clear in a recent speech outside this place. He disappointed some of his supporters by making it clear that he thought it important to maintain the confidentiality of the relationship between civil servants and Ministers.
Mr. Derek Foster: If the Minister wants to take action against civil servants who leak, what does he intend to do about Ministers who leak, as they do that all the time? What does he propose to do about Prime Ministers who leak? Reference has been made to the Westland crisis, when the previous Prime Minister tried to pin the blame on one of her colleagues. What will be done about the big boys who leak, rather than the little minnows?
Mr. Willetts: I am not sure that Ministers leak. Indeed, I should have thought that that was almost impossible by definition since Ministers explain what the Government's policies are.
My hon. Friend the Member for Harrow, West (Mr. Hughes) asked about ethnic minority staff. We have a good record in that regard. The proportion in 1989 was 4.2 per cent.; in 1995—the most recent year for which we
344
have reliable figures—it had risen to 5.4 per cent., compared with 4.9 per cent. overall in the economically active population.
Mr. Garrett: What about the top grades?
Mr. Willetts: The hon. Gentleman is right to ask that. We are not doing as well as we would like in relation to the top grades, but even in those grades there has been an improvement. At senior levels, ethnic minority representation has increased from 1.5 per cent. in 1989 to 2.5 per cent. now.
A series of questions were asked about public sector research establishments. On behalf of the Department of Trade and Industry and the Ministry of Agriculture, Fisheries and Food, I apologise again to any hon. Members who did not receive written answers that should have been issued at 3.30 pm. We are conducting prior options reviews of those establishments. On some—such as Horticultural Research International, which was mentioned by my hon. Friend the Member for Gillingham (Mr. Couchman)—no final decisions have yet been reached. As for others, notably the 12 for which the Department of Trade and Industry is responsible, the DTI announced the conclusions of the reviews today.
The policy intentions announced today will now be subject to detailed planning for implementation, and the manpower consequences will form part of that process. No targets have been set for reducing numbers; the reviews are about getting better value for money and more effective research output. A range of options will be examined in the other research establishments that are still being reviewed: anything from privatisation to contractorisation, rationalisation and, indeed, no change. Any potential redundancies will, of course, be taken into account when the options are considered.
In his opening remarks, the right hon. Member for Bishop Auckland said that we should look forward with bated breath to the speech of the hon. Member for Hartlepool, which would constitute a powerful attack on our proposals for Recruitment and Assessment Services. I kept waiting for that powerful attack, but I do not think that it ever came. We were told nothing that we had not heard time and again in relation to every previous privatisation introduced by the Government. We were confronted by a lurid picture of the private sector, a complete inability to understand the power of legal contracts to enforce standards and, I am afraid, a good many irrational and indefensible claims about—in effect—the inability of the civil service commissioners to monitor standards.
It is the civil service commissioners, quite independently of the civil service, who will audit arrangements when RAS is privatised. None of their auditing powers will be in any way weakened by privatisation. In fact, we shall introduce specific arrangements to ensure the integrity and quality of the fast-stream recruitment process. Civil servants' roles as assessors for the civil service selection board and the final selection board will be unchanged. We shall ensure that selection decisions on candidates remain with civil servants. The tests applied by RAS will continue to be owned by Government and licensed to the privatised organisation, and our Department—the Office of Public Service—will have a strengthened role as a customer in monitoring the fast-stream contract on behalf of customer Departments.

345
With those safeguards, the civil service fast-stream development programme will be operated under contract to the new company. The privatised RAS will be able to expand into new markets and capitalise on its expertise. Yet again, we have heard the extraordinary myth that somehow RAS could remain within the public sector and enjoy what is described as full commercial freedom. That is simply impossible. It is unimaginable that private sector recruitment consultants could compete with public sector recruitment organisations, and that public sector bodies would not be obliged to pay tax—that their liabilities would ultimately be protected by the taxpayer. That is not plausible; it is not fair competition. We have repeatedly tried to explain to the Opposition that if there is to be fair competition, and if such bodies are to operate with commercial freedom, there is only one way to achieve that—through genuine privatisation. There is no alternative.
Mr. Gunnell: When will the Minister give the written details that he promised in a written answer on 29 January at column 489? Is he willing to release to us, or place in the Library, the information that was sent to those who expressed an interest in the purchase of RAS when it was advertised in the Financial Times? When will the final details of the privatisation be released?
Mr. Willetts: I hope that that information—apart from some that may be commercially confidential—will be released very shortly. We are working as rapidly as we can.
Let me turn to what may be the Opposition's agenda. According to the amendment, they believe that the civil service is suffering from initiative fatigue. I can only say that, following the Opposition Front Bench speeches, the fatigue from which we are suffering is review fatigue, careful consideration fatigue and calm reflection fatigue, because that is all that the Opposition have to offer.
Mr. Garrett: Will the Minister give way?
Mr. Willetts: I am afraid that I must make some progress in the remaining few minutes.
We produced a White Paper on the civil service, which was then carefully considered by the Treasury and Civil Service Select Committee, as it then was. The Committee produced a very valuable report. We published a further White Paper explaining our proposals in depth and responding to what the Committee had said. On that basis, we are making progress in modernising the civil service. That includes using the opportunities offered by competitive tendering and privatisation whenever they present themselves.
The Labour party does not seem to understand that, in the words of the Select Committee,
"the quest for greater effectiveness and efficiency in the Civil Service should be an unending one".
The Committee wished to
"stress that the requirement to maximise the return from finite resources will not go away."
I detected, buried in the speech of the right hon. Member for Bishop Auckland, another Labour spending pledge. The right hon. Gentleman says that he wants to stop the "Competing for Quality" programme, which generates extra public expenditure savings of £200 million per year. We are subjecting £1 billion worth of public
346
service work to careful study on that programme every year; as a result, we make savings of 20 per cent. on average. If the right hon. Gentleman is not prepared to continue the programme, he must explain to the House how he will finance the higher running costs that will arise from his loss of nerve.
In the absence of any clear statement from Labour today about its possible policies on the civil service, I turned to "The Blair Revolution"—subtitled "Can New Labour Deliver?"—by the hon. Member for Hartlepool. The hon. Gentleman need not blush. In the book, I found quite a good account of the philosophy behind some of the Government's reforms. The hon. Gentleman states:
"There is no reason, in principle, why the operational arms of Whitehall should not continue to be separated from the policy arms, leaving ministers more free to concentrate on politics and strategy."
That is an important distinction which Ministers have frequently made, often being greeted by scepticism from the Opposition parties.
The hon. Gentleman said a little about politicisation. I did not quite recognise his anxieties on that score. He says in his book:
"There is need … for a stronger political presence in No. 10, providing political advice and contacts"—
I wonder who is being described.
Mr. Beith: He means himself.
Mr. Willetts: The right hon. Gentleman may be right. The sentence continues:
"which neither the private office nor the Cabinet Office can do because they are not supposed to get involved … and cannot meet the Prime Minister's central need: to focus on and manage the government's political strategy and programme."
One final quotation may tell us something about the position in which the hon. Member for Hartlepool finds himself. He wrote:
"Sometimes, if you have a difficult and uncompromising job to do … it is difficult to avoid being hated as well as feared by those around you. But seeing things through … that is, getting your own way—requires more than exercising fear or having the last word in the media: it requires taking people on in argument."
To do that, one has to be talking to them. It is very difficult if one is not.
Question put, That the amendment be made:—
The House divided: Ayes 134, Noes 209.

Division No. 131]

[6.59 pm

AYES

Ainsworth, Robert (Cov'try NE)

Byers, Stephen

Allen, Graham

Caborn, Richard

Armstrong, Hilary

Campbell, Mrs Anne (C'bridge)

Ashdown, Rt Hon Paddy

Campbell, Menzies (Fife NE)

Banks, Tony (Newham NW)

Campbell, Ronnie (Blyth V)

Barron, Kevin

Cann, Jamie

Battle, John

Carlile, Alexander (Montgomery)

Bayley, Hugh

Church, Judith

Beckett, Rt Hon Margaret

Clapham, Michael

Beith, Rt Hon A J

Clarke, Tom (Monklands W)

Benn, Rt Hon Tony

Clwyd, Mrs Ann

Benton, Joe

Connarty, Michael

Bermingham, Gerald

Corbett, Robin

Berry, Roger

Cousins, Jim

Betts, Clive

Cummings, John

Blunkett, David

Cunningham, Jim (Covy SE)

Boateng, Paul

Davidson, Ian

347

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

Marek, Dr John

Denham, John

Marshall, Jim (Leicester, S)

Dewar, Donald

Michael, Alun

Dixon, Don

Miller, Andrew

Dowd, Jim

Mitchell, Austin (Gt Grimsby)

Dunwoody, Mrs Gwyneth

Morgan, Rhodri

Eagle, Ms Angela

Mudie, George

Etherington, Bill

Mullin, Chris

Field, Frank (Birkenhead)

O'Brien, Mike (N W'kshire)

Flynn, Paul

Pearson, Ian

Foster, Rt Hon Derek

Pike, Peter L

Foster, Don (Bath)

Prentice, Bridget (Lew'm E)

Garrett, John

Prentice, Gordon (Pendle)

George, Bruce

Primarolo, Dawn

Gerrard, Neil

Quin, Ms Joyce

Godman, Dr Norman A

Raynsford, Nick

Godsiff, Roger

Rendel, David

Grant, Bernie (Tottenham)

Robertson, George (Hamilton)

Griffiths, Win (Bridgend)

Sedgemore, Brian

Gunnell, John

Sheerman, Barry

Hanson, David

Short, Clare

Hardy, Peter

Simpson, Alan

Harman, Ms Harriet

Skinner, Dennis

Harvey, Nick

Smith, Andrew (Oxford E)

Hill, Keith (Streatham)

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

Hinchliffe, David

Smith, Llew (Blaenau Gwent)

Hoey, Kate

Soley, Clive

Hoon, Geoffrey

Spearing, Nigel

Hughes, Kevin (Doncaster N)

Spellar, John

Hughes, Robert (Aberdeen N)

Squire, Rachel (Dunfermline W)

Hutton, John

Stevenson, George

Ingram, Adam

Strang, Dr. Gavin

Jamieson, David

Sutcliffe, Gerry

Jenkins, Brian (SE Staff)

Taylor, Mrs Ann (Dewsbury)

Jones, Barry (Alyn and D'side)

Taylor, Matthew (Truro)

Jones, Lynne (B'ham S O)

Thompson, Jack (Wansbeck)

Jones, Martyn (Clwyd, SW)

Tipping, Paddy

Jones, Nigel (Cheltenham)

Trickett, Jon

Keen, Alan

Tyler, Paul

Kennedy, Charles (Ross,C&S)

Walker, Rt Hon Sir Harold

Kirkwood, Archy

Wardell, Gareth (Gower)

Lestor, Joan (Eccles)

Watson, Mike

Lewis, Terry

Wigley, Dafydd

Livingstone, Ken

Williams, Alan W (Carmarthen)

Lloyd, Tony (Stretford)

Wilson, Brian

Loyden, Eddie

Winnick, David

McCartney, Ian

Wise, Audrey

MacShane, Denis

Worthington, Tony

Madden, Max

Maddock, Diana

Tellers for the Ayes:

Mahon, Alice

Mr. Greg Pope and

Mandelson, Peter

Mr. Malcolm Chisholm.

NOES

Ainsworth, Peter (East Surrey)

Brazier, Julian

Alexander, Richard

Bright, Sir Graham

Alison, Rt Hon Michael (Selby)

Brooke, Rt Hon Peter

Amess, David

Browning, Mrs Angela

Arnold, Jacques (Gravesham)

Bruce, Ian (South Dorset)

Arnold, Sir Thomas (Hazel Grv)

Burns, Simon

Ashby, David

Burt, Alistair

Atkinson, David (Bour'mouth E)

Butterfill, John

Atkinson, Peter (Hexham)

Carlisle, John (Luton North)

Baker, Nicholas (North Dorset)

Carlisle, Sir Kenneth (Lincoln)

Banks, Matthew (Southport)

Carrington, Matthew

Banks, Robert (Harrogate)

Carttiss, Michael

Bates, Michael

Cash, William

Batiste, Spencer

Chapman, Sir Sydney

Biffen, Rt Hon John

Clappison, James

Body, Sir Richard

Clarke, Rt Hon Kenneth (Ru'clif)

Booth, Hartley

Clark, Dr Michael (Rochford)

Boswell, Tim

Clifton-Brown, Geoffrey

Bottomley, Peter (Eltham)

Coe, Sebastian

Bowden, Sir Andrew

Colvin, Michael

Boyson, Rt Hon Sir Rhodes

Conway, Derek

Brandreth, Gyles

Coombs, Anthony (Wyre For'st)

348

Coombs, Simon (Swindon)

Lidington, David

Couchman, James

Lloyd, Rt Hon Sir Peter (Fareham)

Cran, James

Lord, Michael

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

Luff, Peter

Curry, David (Skipton & Ripon)

MacKay, Andrew

Davies, Quentin (Stamford)

Maclean, Rt Hon David

Deva, Nirj Joseph

McLoughlin, Patrick

Dover, Den

Madel, Sir David

Duncan, Alan

Malone, Gerald

Duncan Smith, Iain

Mans, Keith

Dunn, Bob

Marland, Paul

Durant, Sir Anthony

Marlow, Tony

Eggar, Rt Hon Tim

Marshall, John (Hendon S)

Elletson, Harold

Martin, David (Portsmouth S)

Emery, Rt Hon Sir Peter

Mates, Michael

Evans, David (Welwyn Hatfield)

Mills, Iain

Evans, Jonathan (Brecon)

Moate, Sir Roger

Evans, Nigel (Ribble Valley)

Montgomery, Sir Fergus

Faber, David

Neubert, Sir Michael

Field, Barry (Isle of Wight)

Newton, Rt Hon Tony

Fishburn, Dudley

Nicholson, David (Taunton)

Forman, Nigel

Norris, Steve

Forth, Eric

Oppenheim, Phillip

Fox, Rt Hon Sir Marcus (Shipley)

Ottaway, Richard

Freeman, Rt Hon Roger

Paice, James

French, Douglas

Pawsey, James

Gale, Roger

Peacock, Mrs Elizabeth

Gardiner, Sir George

Pickles, Eric

Gillan, Cheryl

Porter, David (Waveney)

Goodlad, Rt Hon Alastair

Powell, William (Corby)

Goodson-Wickes, Dr Charles

Redwood, Rt Hon John

Gorman, Mrs Teresa

Renton, Rt Hon Tim

Gorst, Sir John

Richards, Rod

Grant, Sir A (SW Cambs)

Robathan, Andrew

Greenway, Harry (Ealing N)

Rumbold, Rt Hon Dame Angela

Greenway, John (Ryedale)

Sackville, Tom

Griffiths, Peter (Portsmouth, N)

Sainsbury, Rt Hon Sir Timothy

Gummer, Rt Hon John Selwyn

Scott, Rt Hon Sir Nicholas

Hamilton, Rt Hon Sir Archibald

Shaw, David (Dover)

Hamilton, Neil (Tatton)

Shaw, Sir Giles (Pudsey)

Hargreaves, Andrew

Shephard, Rt Hon Gillian

Haselhurst, Sir Alan

Shepherd, Sir Colin (Hereford)

Hawkins, Nick

Shepherd, Richard (Aldridge)

Hayes, Jerry

Sims, Roger

Heald, Oliver

Smith, Sir Dudley (Warwick)

Heathcoat-Amory, Rt Hon David

Smith, Tim (Beaconsfield)

Hendry, Charles

Soames, Nicholas

Hogg, Rt Hon Douglas (G'tham)

Spencer, Sir Derek

Horam, John

Spicer, Sir James (W Dorset)

Hordern, Rt Hon Sir Peter

Spink, Dr Robert

Howard, Rt Hon Michael

Spring, Richard

Howell, Sir Ralph (N Norfolk)

Sproat, Iain

Hughes, Robert G (Harrow W)

Squire, Robin (Hornchurch)

Hunt, Rt Hon David (Wirral W)

Steen, Anthony

Hunt, Sir John (Ravensbourne)

Stephen, Michael

Hunter, Andrew

Stern, Michael

Hurd, Rt Hon Douglas

Stewart, Allan

Jack, Michael

Sweeney, Walter

Jackson, Robert (Wantage)

Sykes, John

Jenkin, Bernard

Tapsell, Sir Peter

Jessel, Toby

Taylor, John M (Solihull)

Johnson Smith, Sir Geoffrey

Thomason, Roy

Jones, Gwilym (Cardiff N)

Thompson, Sir Donald (C'er V)

Jones, Robert B (W Hertfdshr)

Thompson, Patrick (Norwich N)

Key, Robert

Thomton, Sir Malcolm

Kirkhope, Timothy

Thurnham, Peter

Knapman, Roger

Townsend, Cyril D (Bexl'yh'th)

Knight, Mrs Angela (Erewash)

Tracey, Richard

Knight, Rt Hon Greg (Derby N)

Tredinnick, David

Knox, Sir David

Trend, Michael

Kynoch, George (Kincardine)

Vaughan, Sir Gerard

Lait, Mrs Jacqui

Viggers, Peter

Lang, Rt Hon Ian

Waldegrave, Rt Hon William

Lawrence, Sir Ivan

Walden, George

Legg, Barry

Walker, Bill (N Tayside)

Leigh, Edward

Wardle, Charles (Bexhill)

349

Waterson, Nigel

Winterton, Mrs Ann (Congleton)

Watts, John

Winterton, Nicholas (Macc'fld)

Wells, Bowen

Wolfson, Mark

Whitney, Ray

Wood, Timothy

Young Rt Hon Sir George

Whittingdale, John

Widdecombe, Ann

Tellers for the Noes:

Wilkinson, John

Dr. Liam Fox and

Willetts, David

Mr. Gary Streeter.

Question accordingly negatived.
Main Question put and agreed to.
Resolved,
That this House welcomes the Government's policies on the Civil Service, as set out in the White Papers 'Continuity and Change' and 'Taking Forward Continuity and Change', including the promulgation of the Civil Service Code from 1st January 1996, the establishment of the Senior Civil Service from 1st April 1996 and the strengthening of the role of the Civil Service Commissioners in maintaining the principles of fair and open competition and selection on merit in recruitment; also welcomes the Government's policy with regard to the privatisation of Recruitment and Assessment Services, with the proposed safeguards to protect the quality of Civil Service recruitment; and looks forward to the intended publication in July of a White Paper on training and development in the Civil Service, associated with the further development by the Civil Service College of a number of partnerships with the private sector which will enhance its status in the provision of courses for those working in the public and private sector.
Mr. Anthony Coombs: On a point of order, Madam Deputy Speaker. May we have an urgent statement from a Foreign Office Minister, so that the House can express its revulsion and anger at the pernicious and disloyal way in which Commissioner Kinnock is trying to undermine the policy of the British Government on overturning the beef ban?
Madam Deputy Speaker (Dame Janet Fookes): The hon. Gentleman may ask, but he knows that it is not within the power of the Chair to call for such a statement. Ministers on the Treasury Bench will have heard his request.

DELEGATED LEGISLATION
Madam Deputy Speaker: With permission, I shall put together the motions relating to delegated legislation.
Motion made, and Question put forthwith, pursuant to Standing Order No. 101(6) (Standing Committees on Delegated Legislation),

VALUE ADDED TAX
That the Value Added Tax (Payments on Account) (Amendment) Order 1996 (S.I., 1996, No. 1196), dated 30th April 1996, a copy of which was laid before this House on 1 st May, be approved.
NORTHERN IRELAND
That the draft Food Safety (Amendment) (Northern Ireland) Order 1996, which was laid before this House on 30th April, be approved.

SOCIAL SECURITY
That the draft Jobseeker's Allowance (Amendment) Regulations 1996, which were laid before this House on 28th March, be approved.
That the draft Jobseeker's Allowance and Income Support (General) (Amendment) Regulations 1996, which were laid before this House on 30th April, be approved.
That the draft Social Security (Adjudication) Amendment Regulations 1996, which were laid before this House on 9th May, be approved.—[Mr. Brandreth.]
Question agreed to.

DEREGULATION
Madam Deputy Speaker: With permission, I shall put together the motions relating to deregulation.
Motion made, and Question put forthwith, pursuant to Standing Order No. 14A(1)(a) (Consideration of draft deregulation orders),

INDUSTRIAL AND PROVIDENT SOCIETIES
That the draft Deregulation (Industrial and Provident Societies) Order 1996, which was laid before this House on 22nd April, be approved.
GAMING MACHINES AND BETTING OFFICE FACILITIES
That the draft Deregulation (Gaming Machines and Betting Office Facilities) Order 1996, which was laid before this House on 22nd April, be approved.

PRIVATE COMPANIES
That the draft Deregulation (Resolutions of Private Companies) Order 1996, which was laid before this House on 25th March, be approved.—[Mr. Brandreth.]
Question agreed to.

Council Tax
7.13 pm
The Secretary of State for the Environment (Mr. John Gummer): I beg to move,
That the draft Council Tax Limitation (England) (Maximum Amounts) Order 1996, which was laid before this House on 20th May, be approved.
In reaching my decisions on total standard spending for England and the capping principles, I looked hard both at the pressures on local spending and at the scope for greater efficiency and effectiveness in authorities. Individual authorities must be equally thorough. They should always be seeking ways to deliver better value for money to their local taxpayers. That means taking a rigorous approach to pay and efficiency and making a realistic assessment of their spending priorities.
The House will recall that the total standard spending for England for 1996–97 is £44.93 billion, an increase of 3.3 per cent. over the 1995–96 figure. That was a substantial increase and it reflected the importance that the Government attach to education and the care of the vulnerable and elderly. We provided for a 4.5 per cent. increase in provision for education and 6.9 per cent. for social services, including further transitional community care special grant.
It is, of course, for each local authority to set its budget and decide its spending priorities. My capping principles for 1996–97 were devised to give authorities the flexibility to make use of the additional resources that we provided for education, social services, fire and police in the settlement. We did that by ensuring that an authority's permitted increase under the capping rules was at least as big as the total of the increases in those blocks of the authority's standard spending assessment. We called that passporting. I am therefore more than a little surprised, given the demands last year for additional funding for education, that some local education authorities have chosen not to pass on the 4.5 per cent. increase in education standard spending to schools. I am especially sad that my county council has failed to do that, but has used the money elsewhere and thus denied schools the money that they should have had.
For county councils and shire unitary authorities, the permitted increase was at least 3 per cent.; for metropolitan districts, outer London boroughs and metropolitan fire and civil defence authorities, it was at least 2 per cent.; for inner London boroughs, 1.5 per cent.; and for police authorities, 3.5 per cent. Shire district councils were able to increase budgets by 0.5 per cent. Authorities that budgeted more than 12.5 per cent. above standard spending assessment would be subject to a cash freeze. Capping always allows an authority to spend at the level of its SSA.
Most local authorities have set affordable budgets and council taxes this year within their capping limits. That meant that when I confirmed my capping principles on 3 April, I was able to propose cap limits that required only two authorities—Cambridgeshire county council and Oxfordshire county council—to reduce their budget requirements. By contrast, my initial cap limits last year would have required nine authorities to reduce their budgets.
In a moment I shall set out my final decisions on Cambridgeshire and Oxfordshire, which are the subject of this order. Before I do so, I should deal briefly with the
352
four other authorities that I formally designated under my capping rules on 3 April—Essex county council and Greater Manchester, Tyne and Wear and Merseyside fire and civil defence authorities.
In the cases of Essex county council, Greater Manchester fire and civil defence authority and Tyne and Wear fire and civil defence authority, designation was purely technical. I had agreed in advance with them that they could set budgets above their caps by specified amounts. They are not required to reduce their budgets or to incur any additional costs, and the process is already complete.
Merseyside fire and civil defence authority set a budget requirement for 1996–97 of £52.78 million. The authority argued that a lower budget would lead to its being in breach of statutory minimum standards for the fire service. That view was backed up by Her Majesty's fire service inspectorate. I therefore designated Merseyside fire authority at its original budget. As with the other three authorities, it does not need to make any further budget reductions this year and the capping process for it is now complete.
Oxfordshire and Cambridgeshire were the only local education authorities seriously to exceed the provisional cap indicated by my capping rules. That was in spite of permitted increases of 3.7 per cent. for Cambridgeshire and 3 per cent. for Oxfordshire—both of which were greater than the average LEA permitted increase of 2.9 per cent. I designated both counties for capping on 3 April and set maximum amounts for them at the level indicated by the capping rules. Both counties challenged those caps and have argued that they should be allowed to confirm the higher budgets that they have set.
In reaching a view on the final capping limit for those authorities, I must take account of the specific local circumstances of each authority. I have, therefore, considered each county's case carefully, and my hon. Friend the Minister for Local Government, Housing and Urban Regeneration has met delegations from each authority to hear its case in detail.
Cambridgeshire's problems stem, in its view, from the fact that it used up all its available reserves last year. However, Cambridgeshire would have been aware last year that its reserves could be used only once and should have budgeted accordingly. It would not be right for us to allow authorities to top up their reserves every time they ran out, not least because the local taxpayer would foot the bill.
Mrs. Anne Campbell: Will the Secretary of State give way?
Mr. Gummer: If I may finish the next paragraph, I am sure that the hon. Lady will find it helpful.
In fact, Cambridgeshire's total reserves stand at £53.8 million—about 13 per cent. of its proposed net revenue expenditure. It admits that some of its reserves are available to support revenue spending this year. It also admits that a budget at cap is achievable as it has not yet passed on the additional resources to the relevant services. Against that background, I believe that there should be no relaxation in Cambridgeshire's proposed cap, and that the cap is reasonable, achievable and appropriate in all the circumstances of the authority. If the draft order is agreed

353
by the House, it will result in a reduction of council tax in Cambridgeshire of £25.26 for a two-adult band D household.
Mrs. Campbell: Does the Secretary of State accept that, in the view of the district auditor, Cambridgeshire's reserves are now down to six days' spending, not the amounts that the Secretary of State just announced? Does he accept that Cambridgeshire's reason for spending reserves in such quantities last year was that the Minister for Local Government, Housing and Urban Regeneration promised that the area cost adjustment was being closely scrutinised and said that Cambridgeshire might well expect something from that in this financial year?
Mr. Gummer: That is nonsense; the last point was absolutely untrue. We are considering the area cost adjustments and we have said that an independent inquiry is being held, which will report to allow us to make changes, if we think that right, in future years, but I am quite sure—I need not even ask him—that my hon. Friend the Minister for Local Government, Housing and Urban Regeneration never gave any such indication, because it was impossible for any such indication to be given. One does not know, until the thing is properly examined, what, if any, effect there might be. I also represent part of a county that is affected in a deleterious way. Last time we considered the matter, we found that it was much more difficult than I had expected and there were very good grounds for supporting the present system. We are assessing it again, and we are trying to do it as independently as possible, but I am quite sure that my hon. Friend did not say anything of the sort.
Sir Anthony Grant: No one has been a bigger opponent of the area cost adjustment than I have for at least 10 years. I have mentioned it repeatedly in the House. I have tackled umpteen Ministers—the last one was my hon. Friend the Minister for Local Government, Housing and Urban Regeneration, who was very reasonable in listening to the case put, but certainly never gave any assurance other than that the matter would be very carefully reviewed. There is no delusion about this matter.
Mr. Gummer: I believe that my hon. Friend will agree, first, that the reason for the further investigation into this matter is precisely as he puts it—because he and other of my right hon. and hon. Friends have pressed for it. I am considering the matter independently and as carefully as I possibly can. I think that my hon. Friend will also agree that for a local authority to decide that it will fix its spending arrangements on the basis of a hope that something might turn up in the following year seems to betoken—
Sir Anthony Grant: Micawberism.
Mr. Gummer: I should not like to go as far as that, but the hon. Member for Cambridge (Mrs. Campbell) does the Liberal and Labour parties that run Cambridgeshire county council no favours by suggesting that the reason why they got this wrong was that they hoped that some money might turn up. If we all ran our private finances on that basis, we would suffer from serious problems. I hope that the hon. Member for Cambridge does not run
354
her finances in that way, or she will find herself in difficulties and need counselling, which clearly, in her terms, Cambridgeshire does.
Cambridgeshire had significant extra resources, and those resources could be applied, and have been applied, in such a way as to allow it to keep to a budget below cap. That is what it has done, and I do not think that the authority would criticise the figure that I quoted.
Oxfordshire argues that, since 1991–92, it has reduced total spending by £45 million and that scope for further savings is severely limited. It also argues that, even at its proposed level, the budget represents £5.5 million less than the sum that would be required to keep services running at the same level as in 1995–96.
Nevertheless, on balance, I do not consider Oxfordshire's position to be sufficiently different from other LEAs to justify a relaxation in its capping limit. All the other counties limited to a 3 per cent. permitted increase have managed to set budgets within their provisional cap. The same is true of the inner and outer London LEAs, which were limited to 1.5 per cent. and 2 per cent. increases respectively. Although Oxfordshire's reserves are not large, they are by no means the lowest, as a percentage of budget requirement, among the counties.
I therefore propose that there should be no relaxation in Oxfordshire's original cap, which I consider to be reasonable, appropriate and achievable in all the circumstances of the authority. If the draft order is agreed by the House, it will result in a reduction of council tax in Oxfordshire of £34.90 for a two-adult band D household.
Before I conclude, I remind the House that ordinary people pay these bills. It is all very well talking about this or that standard of service or this and that demand, but ordinary people have to pay the bills, and £34.90 is a sum of importance, not something that must be cast aside.
Mr. Andrew Smith: I had not intended to intervene at this point, but as the Secretary of State has not referred to it, I should like him to confirm for the record that he has written to Oxfordshire, offering an extra borrowing facility in recognition of the county's difficulties. As he appeared to dismiss those difficulties, will he explain why he is offering the borrowing facility and give an idea of how much it might be?
Mr. Gummer: If the hon. Gentleman had waited, I was going to cover that in my next comment. I think it important to point out, however, that there is no basic difficulty.
Oxfordshire could do what we have asked it to do, and other counties in more straitened circumstances, in the sense that they have had only a 1.5 per cent. or 2 per cent. increase, have managed to solve their problems, but there is a specific short-term problem, which might mean that Oxfordshire would have to make teachers redundant this year, only to have to employ them again in a year or two's time. That is a result of specific problems in the Oxfordshire profile.
Precisely because that is likely to be a short-term problem, a relaxation in the cap would not be the right approach, as that would give Oxfordshire a permanent increase in its spending power, which could be done only at the behest of other counties. It would put Oxfordshire out of line with other counties.

355
I am therefore prepared to offer Oxfordshire a supplementary credit approval and a capitalisation direction, which will enable it to capitalise revenue expenditure, to help with its short-term problems. That will, in effect, give the authority another year to get its budget into line with our assessment of an appropriate level of expenditure. I understand that Oxfordshire will make a proposal for an SCA and a capitalisation direction, and I await that proposal.
If the order is approved, we shall serve a statutory notice on both authorities formally setting their cap. They will have 21 days to reduce their budget in line with their cap and set new lower council taxes. In Oxfordshire's case, the reduction can, to some extent, be offset by using the offer of a capitalisation direction and SCA to free up resources. Those resources can then be used to support its existing spending plans. I am sure that hon. Members would expect it to do that to support its education spending plans, for which it has been given the money.
I have considered carefully the points raised by all the authorities involved in the capping process, to ensure that the caps that I have proposed are reasonable, appropriate and achievable. Where there are special circumstances, I have been prepared to make concessions. The final outcome is a reduction of £13 million in this year's council taxes in the affected areas. I commend the order to the House.
7.29 pm
Ms Hilary Armstrong: This is the first time that this debate has been held since I have been a member of the environment team. I read with interest what was said in previous years. I have also reflected on the recent comments of the Secretary of State, on the methodology that he has used and on the ways in which he has approached these issues. Once again, I have found that the words used one year are not followed up in succeeding years—and I shall come back to that.
The Labour party has been consistent in the belief that the formulations of the standard spending assessment retain problems. Every time that this is raised, the Secretary of State tells me that it is nonsense and that I have said that it cannot be adjusted quickly. I have said that: it needs proper investigation. Grave concern has been expressed throughout the country about the unfair way in which standard spending assessments are calculated. I will not go through the figures on Westminster tonight. Ministers will not let me have the calculations that they say show that our protestations are wrong. I want to know how the Government calculated the difference between now and 1979, as no one else has been able to do so.
Given the rigidity of the actions of Ministers and the Government tonight, the unfairness and unhappiness throughout the country—apart from Westminster—about the formula used to calculate the standard spending assessment means that we have to return to it. If the Government were interested in working to the agenda of people outside the House, they would be pushing much harder. Last year, the right hon. Member for North Shropshire (Mr. Biffen) said:
"I hope that hon. Members will reflect upon the fact that we cannot return to this situation year after year because it will worsen year after year. We must now begin to think of a more flexible and acceptable arrangement."—[Official Report, 15 June 1995; Vol. 262, c. 921.]
356
I could not agree more. However, this year the Government have not been flexible, nor have they attempted to address the individual needs of the councils involved. It is significant that today the Secretary of State made a substantially shorter speech than he did last year— although the beginning of his speech was almost the same as his speech last year. He seems to have learnt nothing from last year and he has not defended his actions.
I think that the Secretary of State knows that he is using draconian powers that go far beyond commitments that were made when the system was established and during the passage of the legislation that gave the Government the powers. At that time, the then Secretary of State, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), made commitments and said that this would be used only as a reserve measure. He said:
"It is not a measure to be used as a matter of course.
The people of an area certainly will be able to vote for a relatively high-spending authority if they so choose.
It is important that there should be such a reserve power—rarely, if ever used we hope—to protect the charge payers of an area against extreme cases of extravagant and irresponsible local authorities."— [Official Report, 25 April 1988; Vol. 132, c. 51.]
The Government have wandered far and wide from that commitment and it is not being upheld in the order that we are considering tonight.
It is clear that neither of the authorities that we are debating is charged with extreme cases of extravagant and irresponsible spending—those charges have not been upheld by the external audits of the authorities. This goes way beyond what the Government committed themselves to do when they introduced the power.
Mr. Gummer: Will the hon. Lady comment on why the Labour and Liberal Democrat group leaders on Cambridgeshire county council wrote to their counterparts on other English county councils almost three months before the settlement was announced saying that they could envisage a number of authorities contemplating exceeding capping levels, that they would prefer not to be isolated and that they would feel more secure if more councils exceeded the cap on a common basis. Cambridgeshire was contemplating breaking the cap before the money was shared out. That was its intention, regardless of the amount of money that it received.
Ms Armstrong: That is not a point in relation to what I was saying.
Mr. Simon Burns (Lord Commissioner to the Treasury): Answer it.
Ms Armstrong: I will answer it if I am given the opportunity and the normal courtesies of the House are observed. We have a problematic Whip; he is obviously feeling a little insecure.
The question whether the authorities are irresponsible depends on how they prepared their budget. It would be irresponsible if an authority simply sought to determine its budget and priorities after the Government had pronounced. Councils have a responsibility to their area and to work effectively throughout the year. They have to set the priorities and work out what their electors want them to do.

357
I have discussed this with both councils and I know that they started their process early. They identified the priorities and what their schools and social services provision would require. They discussed this with people in their counties long before the Government set their rate. If they did not start to do that until after the Government had set their rate, they would be failing in their responsibility to their electorate.
The Parliamentary Under-Secretary of State for Education and Employment (Mr. James Paice):
Answer the question.
Ms Armstrong: I am sorry if the hon. Gentleman thinks that this is not an answer. The Secretary of State complained that the council wrote to other authorities before he set the cap. It was not intent on breaking the cap; it was intent on responding to local demands and to local priorities for spending, knowing what the Government were likely to do. I contend that if they were not working responsibly with their local electorate, the Secretary of State would be right to condemn them. However, they were working responsibly with their local electorate—and I might have something to say to the right hon. Gentleman later about some of his contentions about the authority.
Mr. Gummer: Is the hon. Lady saying that she would commend local authorities that decide that they will think seriously about breaking the cap even before they know how much money they will get? Is the Labour party committed to urging authorities to break the cap even before they know how much money they will receive? If so, that is entirely new Labour policy, which we will be pleased to broadcast.
Ms Armstrong: The Secretary of State is being irresponsible once again: that is his problem. He knows that I did not say that. He is trying to make accusations against those authorities because his argument is without substance. He has shown that he is not concerned about the fact that the authorities have met their statutory responsibilities in service delivery. He is not concerned that they spend less than the average amount per head of population compared with other counties. He is not concerned that the district auditor has commended them for their quality of spending control and for the efficiency of their spending. The Secretary of State simply arrived at a global sum and those authorities have become victims of the global picture. He has not paid attention to local needs. It is the right hon. Gentleman, and not the authorities, who is acting irresponsibly.
Sir Anthony Grant: The hon. Lady should note that Cambridgeshire was found wanting in a more recent auditor's report. It is well below average on two counts: care of the elderly and primary education.
Ms Armstrong: I shall refer to performance indicators later. That is a different matter: it is not so much about the efficiency of the authority as the quality of service delivery. [Interruption.] I wish that Conservative Members would take the matter more seriously; it will affect people's lives.
The Secretary of State said that it is important to approve the order because ordinary people are paying the bills. That is true, but they are also receiving the services.
358
Ordinary people in Cambridgeshire and in Oxfordshire have been consulted extensively about the amounts that they want to be spent on schools. The Government are trying to con local people about the available expenditure, but the people have seen through them. The right hon. Member for Witney (Mr. Hurd) wrote a letter to head teachers, one of whom sent a copy to me.
The people of Cambridgeshire know that, if the capping order succeeds, available expenditure will increase by 1.9 per cent. over last year. In Oxfordshire, there will be a 2.7 per cent. real increase in available expenditure for schools over and above last year. The amount that the Government announced that local authorities may spend is a phantom figure. Local people have recognised that fact and they have decided that the order does not meet their needs.
The previous Secretary of State said that people could vote for a high-spending authority. There were no county council elections last year, but there were district council elections. The challenge to the cap was an issue in the election campaigns in both district authority areas. The matter was discussed. I was staggered when Banbury, which is in the district of Cherwell, elected a Labour council. Labour won more seats in that area than we believed possible—let alone targeted and expected to win. That shows how the people of Oxfordshire are voting. Labour also did exceptionally well in Cambridgeshire.
Turning to issues of quality and efficiency, Oxfordshire comes 45th out of 47 counties for total expenditure per head. It spends £560 per head. Cambridgeshire ranks a little higher—it is 37 out of 47—and allocates £580 per head. The county average is £629. Performance indicators identified in the recent Audit Commission report show that both authorities are above average and are doing reasonably well. The performance indicators include education, the collection of charges and so on. The authorities are working hard to meet the Government's objectives, regardless of their political persuasion. Referring to Cambridgeshire, the district auditor said:
"The Council's financial affairs continue to be well controlled. However, the Council now faces significant financial pressures".
The district auditor is concerned that Cambridgeshire's good housekeeping is being threatened by financial pressures. We are told that Oxfordshire is also a good authority that is at the forefront of voluntary competitive tendering initiatives. The district auditor said that its tendering process is operated in the interests of council tax payers and that contracts are awarded to the lowest bidder. Oxfordshire is commended by the district auditor for its low staffing and its high standards, among other things.
We are not debating profligate authorities that have upset local people with their overspending. Both authorities suffer as a result of rapidly growing populations. That is a particular problem in Cambridgeshire, but the order does not take account of that fact. In Oxfordshire, there are more children aged one to four than is the average for that population profile and the number of 60 to 80-year-olds is also above average. That puts pressure on the two areas of service provision that are the most demanding financially.
The Government are so obsessed with ideological dogma that they are breaking their commitments on spending and on capping. They have demonstrated that, far from being in control of local government finance,

359
they have lost sight of reason. The Government are acting against the wishes of the people of Oxfordshire and Cambridgeshire. The people want the opportunity to fund their schools and their social services properly, but they know that the Government will manipulate the figures to ensure that they cannot do that. That is not good enough. We need the flexibility that the right hon. Member for North Shropshire urged on Ministers last year. Once again, the Government have not learnt their lesson and the electorate will ensure that it costs them dearly in the very near future.
7.48 pm
Mr. Douglas Hurd: The arguments heard in Oxfordshire this year are not a bad example of an irresistible force meeting an immovable object. There exists a contradiction that the hon. Member for North-West Durham (Ms Armstrong) has done nothing to explain, and which is difficult to explain—how £5.95 million extra for education in Oxfordshire via the standard spending assessment grant is converted into cuts when it reaches schools. At the heart of the matter is substantially more money from the taxpayer to the county, and less money from the county to the schools.
Mr. David Rendel: Will the right hon. Gentleman give way?
Mr. Hurd: No.
The county council is trying to argue that Oxfordshire is a special case and that the calculations were in some way unfair to the county—and, the hon. Member for North-West Durham added, to Cambridgeshire. It is suggested that the calculations are the result of some mysterious conspiracy against my county, or of an experiment in ideological dogma. I cannot understand why my right hon. Friend the Secretary of State should have chosen those two counties for an experiment in ideological dogma which other counties have been spared. The hon. Lady threw no light on that curious proposition. Obviously her claims cannot be true.
The argument that Oxfordshire is a special case dissolves at the touch. The county has not provided the Members of Parliament that represent it the wherewithal for arguing that Oxfordshire is a special case. The arguments leave out of account something that the Government cannot if their criteria are to be real needs— that is, the lower proportion of Oxfordshire children at state schools. Obviously that affects needs and entitlements. Oxfordshire's claim to be a special case is threadbare—and not improved by the absurd threats such as that to close the county museum at Woodstock.
But it is an undeniable fact that the county is not providing or proposing to provide the money needed to run schools and other services. It has been using up reserves to sustain a high rate of spending on education, and it cannot continue to do so. That is no particular credit to the county but is a fact, and one borne in on me and my right hon. and hon. Friends for two years by headmasters, teachers, governors and parents. We have passed on the facts to the two Ministers concerned. The people who talk to us are not playing the political game that the hon. Lady is playing. They are not concerned at how the situation
360
came about. They do not talk about ideological dogma and all that nonsense. They are simply concerned with the facts with which they have to deal, and with the prospects for children and services on the present figures.
Although Oxfordshire does not have a special case, there is a problem—and I am glad that my right hon. Friend the Secretary of State has recognised its existence. I hope that the ingenious help that he has decided on for Oxfordshire will ease the immediate strains in the way that he proposes. I ask him to keep a close eye on how the extra money that he will allow to be borrowed beyond the normal limits is spent. I gather that my right hon. Friend will be having discussions with the county council on that point. I trust that he will ensure that the money borrowed is used for the purposes for which it is intended.
Finally, please will my right hon. Friend try—I know this is difficult—to do more to explain the matter to the public? Every now and then he admits us—as he did today—to part of the mysteries over which he presides, but that is not of great help to our constituents. Will his Department produce a one-page leaflet to be included in council tax demands, such as councils usually provide, showing the objective assessments of need? As long as there are mysteries, there will be accusations of foul play and people trying to exploit the matter for ideological and dogmatic reasons. I thank my right hon. Friend for his remarks, but may we have a little more light on those dark places?
7.53 pm
Mrs. Anne Campbell: My hon. Friend the Member for North-West Durham (Ms Armstrong) remarked that Cambridgeshire has always been a low-spending authority. It suffered many years of Conservative control, so even Government Members would have difficulty arguing that Cambridgeshire has not been low spending, and that is confirmed by the Audit Commission's report. Of the shire counties, Cambridgeshire is fourth from the bottom in spending on each primary school pupil, 14th from the bottom in spending on secondary school pupils and bottom in spending on the over-16s.
All that is despite the fact that Cambridgeshire has consistently spent 6 per cent. more on education than the Government have allocated in the standard spending assessment. The county's planned budget this year reduces that figure to only 4 per cent. more than the SSA. The people of Cambridgeshire are in no doubt that, if the order is approved, that will result in appalling consequences for the county's education and social services.
The Secretary of State's accusation that Cambridgeshire is not passing on the increase to its schools was perpetrated in a letter of complaint from the right hon. Member for Peterborough (Dr. Mawhinney) to the secretary of the National Union of Teachers in Cambridgeshire. The Government say that the county should spend £237 million on education, but it plans to spend £247 million. It is true that £5 million has been reserved. If that hold-back continues, at least 80 teaching posts already identified by schools throughout the county will be lost—on top of the 100 teaching posts that were lost following last year's disastrous cuts.
The Government say that Cambridgeshire should spend £77 million on central services, but the county is planning to spend £84 million. The Government say that the county

361
should spend £13 million on the fire service, and it is planning to spend more than £14 million. To do so, Cambridgeshire has had to reduce spending on other services by 18 per cent. The county shares the Government's priorities for services and has made sure that money is spent on education, social services and the fire service—not on other services, as it has been accused of doing.
The Government claim that they have given Cambridgeshire £11 million extra this year. In the words of Lord Justice Scott, that is "sophistry". The Government have increased by £11 million not the county's grant, but the standing spending assessment. As the House knows, that is a different matter.
Cambridgeshire was already spending more than the SSA on education, to cope with what the Secretary of State for Education described as a tough settlement last year. The county followed the Government's advice and took £10 million out of its reserves, to lessen the pain of the £17 million cuts imposed. The district auditor has described Cambridgeshire's reserves, which represent only six days' spending, as extremely low. That situation could be repeated this year.
I am glad to see the hon. Member for South-East Cambridgeshire (Mr. Paice) in his place on the Government Front Bench because he has tried to be helpful. When asked on Radio Cambridgeshire today about the county council's problems, he claimed that it was a profligate authority losing £4 million a year on its school meals service. The £4 million excess of expenditure over income is due to the cost of providing free school meals.
Mr. Paice: It is still too much.
Mrs. Campbell: I suppose that the hon. Gentleman realises that the county council has a statutory duty to supply free school meals to children in need. Is the hon. Gentleman suggesting that Cambridgeshire should break the law?
The hon. Gentleman has also complained about the high cost of school meals, but that is because Cambridgeshire not only recoups the cost from children who can pay but provides an element of the overheads. That is why the county cannot cut its school meals service without losing money.
Why is Cambridgeshire struggling to pay for services that everyone else expects of right? In April 1995, the hon. Member for South-West Cambridgeshire (Sir A. Grant) and I went to see the Minister to ask for a fairer deal for funding for Cambridgeshire. The area cost adjustment, which the county does not receive, would have given Cambridgeshire an additional £15 million last year. I know that the hon. Member for South-West Cambridgeshire was quite optimistic after that meeting. He remarked to the Cambridge Evening News that he could see light at the end of the tunnel. The Cambridge Evening News is not a paper to sound a note of false optimism, and the editor remarked that it was too early to start celebrating the fact that the Government were finally beginning to see sense.
I am afraid that the news in October dashed our hopes. The Department of the Environment announced an independent review into the area cost adjustment
362
system—a review that would not report until June this year. Promises that Cambridgeshire's situation could be improved were broken, too late for this financial year.
The Minister for Local Government, Housing and Urban Regeneration (Mr. David Curry): I am sorry to interrupt the hon. Lady as I know that her time is limited, but I want to set the record straight.
I said last year that we were looking to see whether there was an approach to labour costs that was more robust than the area cost adjustment. We were looking particularly at travel-to-work areas. I made it clear, as I have always done, that if that turned out to be a better formula, it would be adopted, but that if it did not, it would not be.
I said the same about the present review. At no stage did I say that we would change the system irrespective of whether the methodology was improved. As the hon. Lady will know, the attempt to make the travel-to-work area methodology work was not successful; I was not prepared to adopt a system that I thought was intellectually flawed. That is why we moved to examining a different formulation. I should be grateful if she reported the facts accurately and did not interpret them in a way that is not true.
Mrs. Campbell: I am grateful for that explanation. The hon. Member for South-West Cambridgeshire and I came away last April with an optimistic view. We certainly understood that something better would be implemented by this time this year—and that was the county's impression too.
When the settlement was announced this year, Ministers and Conservative Members wrote to schools saying that education spending had been increased. That showed a blatant disregard for the truth. I wrote to the right hon. Member for Peterborough to complain about the inaccuracies in the letter that he had sent to schools. He did not bother to answer my allegations; he simply accused me of having an unsavoury reputation for interfering in other people's constituencies. If interfering in other people's constituencies is necessary to bring the truth home to the people of Cambridgeshire, I am prepared to do it any time.
Whom are the Government trying to punish? Are they trying to punish the county council because it is the wrong political colour; or have they decided to punish the people of Cambridgeshire for voting the Conservatives out of office in 1993? Are they so worried about their chances in Cambridge, Peterborough and Fenland in the general election that they decided to cut Cambridgeshire's budget so as to blame the county council? It is not councillors who will suffer: it is the people of Cambridgeshire. Old people in need of care will be subjected to soaring charges, children with special needs will be unable to receive the help that they should have, and children will study in overcrowded classes. There will be fewer curriculum choices, teachers will be overstressed and school governors will face impossible decisions.
Even Peterborough city council recognised this when, at its meeting in January, it noted with concern the county's SSA and capping limit, which limits its discretionary scope. The city council said:
"This council fully supports Cambridgeshire county council in its bid to seek a higher spending limit and to protect as far as possible service standards for priority services, in particular schools, social and fire services."

363
That was not said by a left-wing council. At the time, the city council was a hung body. That statement, moreover, had the full support of Conservative councillors. Peterborough city council also expressed its heartfelt support for the councillors on Cambridgeshire county council, which was not a Labour council in January. It is now, and one can see why.
The schools have identified 80 redundancies. That has produced outbursts of protest from schools all over the county. I have with me letters from almost all of them protesting about the cuts that they are being forced to make. A head teacher of a school in Huntingdon, the Prime Minister's constituency, was quoted in the Cambridge Evening News as saying:
"We are not very far from meltdown. We are getting to the point where there is extreme anxiety whether we can actually keep children in school full time."
Schools are beginning to realise what a disastrous effect the £5.3 million that has been kept back from the schools budget will have on service provision in Cambridgeshire.
I implore the Minister tonight—indeed, I implore Conservative Members—to take pity on the people of Cambridgeshire, to answer their pleas, and to vote with us in the Lobby this evening.
8.4 pm
Sir Anthony Grant: I certainly have sympathy with the people of Cambridgeshire, but my sympathies are with the people who pay the bills—the council tax payers. The hon. Member for Cambridge (Mrs. Campbell) made a valiant attempt to defend Cambridgeshire county council under its current regime. The council certainly needs some defending! She made the council out to be a paragon of financial virtue. As I shall demonstrate, the very opposite is true.
We can at least agree, as I have argued here and elsewhere for ages, that the area cost adjustment is ludicrous and grossly unfair to Cambridgeshire. It is absurd to suppose that taking one step over the border from Bedfordshire into Cambridgeshire takes one suddenly into a poorer area with lower costs. Anyone who shops in Bedford and Cambridge can testify to that. Without the area cost adjustment, a large sum of money would have been available to authorities to spend on education and other services in Cambridgeshire.
As for the review, the Minister of State has been the first Minister to apply careful thought to the matter. The hon. Member for Cambridge and I, together with other representatives of local parties, attended a useful meeting at which we put our case. The Minister promised a review, which means exactly what it says. It does not mean that we will like its results or that the Government automatically have to accept them. Nevertheless, the Minister sincerely undertook, for the first time ever, to review this ludicrous system.
I am disappointed that the review did not report as soon as it might have and that it was delayed for a year, but there is no justification for a well-resourced, responsible county council to pre-empt the result of the review, to believe that everything will be fine and to plan its affairs accordingly. That is like Mr. Micawber at his worst; it is
364
a ludicrous way to carry on. Far from being paragons of financial rectitude, the county councillors showed complete irresponsibility if they operated on that basis. They should have conducted their revenue affairs more prudently.
Strange things have come to light. It has been found that a large sum was wasted by Cambridgeshire county council. The transportation department made a loss on its direct labour organisation estimated at £1.9 million—at least. The money has gone down the drain. What is more, the council has just announced bonuses for its staff amounting to no less than £400,000. It has had to call in Price Waterhouse and pay over a fee of £43,000 as a result of all this chicanery. The cost of sending out a new set of council tax bills is estimated at £300,000.
Mrs. Anne Campbell: Will the hon. Gentleman accept that the loss by the transportation department—it is not condoned by anyone—began in 1992–93 under a Conservative administration? Will he further accept that the bonuses paid to staff were started by his noble Friend Lady Blatch when she led the county council? Finally, will he accept that Cambridgeshire complied with the call for an inquiry into the loss of the £1.9 million by bringing in Price Waterhouse, and paying the price for its services?
Sir Anthony Grant: With great respect to the hon. Lady, I do not care whether the system was set up by Winston Churchill, Disraeli or Campbell-Bannerman. That means nothing to me. We are discussing local authority finance and Cambridgeshire county council is responsibility for all its affairs. It is responsible for its books and it is in charge of the transportation department. The information that I read out was wrung out of the county council with great effort.
I calculate the grand total of the loss to be £2,643,000. That is equivalent to no fewer than 150 or 160 extra teachers, who could be employed in the education department. When the Lib-Lab county council was found out, it started whingeing and whining about party politics. Cambridgeshire local politicians of the Lib-Lab persuasion have never been shrinking violets about party politics—nor should they be. Having been hoist with their own petard and made a hash of their finances, they thought that they could pull a fast one on the council tax payers and the Government. An extra £11 million was undoubtedly made available for education in Cambridgeshire and diverted to other uses.
The Minister without Portfolio, my right hon. Friend the Member for Peterborough (Dr. Mawhinney), was absolutely right to say that the county council was treating parents and teachers with contempt. It deliberately set a budget exceeding the limits laid down by the Government because it hoped to use the loudest, most vocal clamour— that of the education lobby. The hon. Lady said that she had received many letters and so did I. Many of them had been dictated to children. People were told to keep writing to their Members of Parliament and all the letters were exactly the same.
The county council thought that by whipping up the education lobby, it could bully the Government and extract more money. When its financial incompetence and mischief were discovered, it tried to involve other councils in the same monkey business. Now that the council has been found out, the rights of council tax payers, which should have been the prime concern, have been protected by the order that we are debating tonight.

365
I shall undoubtedly continue to fight against the unfair area cost adjustment. I hope that the review will do justice to the cause of Cambridgeshire. Having said that, I support the Minister's decision tonight, as do all Members representing Cambridgeshire—excluding the hon. Lady of course—and the opposition in all Cambridgeshire councils. They will continue to fight that cause and their case will be made clear at next year's elections.
Mr. Hurd: Will my hon. Friend acknowledge that the Minister without Portfolio, my right hon. Friend the Member for Peterborough (Dr. Mawhinney), who cannot intervene, is in his place and supports what my hon. Friend is saying?
Sir Anthony Grant: I am grateful to my right hon. Friend. I had spotted my right hon. Friend the Member for Peterborough. I read the powerful letter that he wrote and that the hon. Lady dismissed. It made sense to me and I quoted it with approval.
Finally, as I know that other Members wish to speak, let me say that I support the Minister's decision. It is high time that the interests of those who pay the bill—the unfortunate council tax payers who have to bear the brunt of all this nonsense and produce the cash—should be safeguarded at last and that is precisely what my right hon. Friend has done tonight.
8.13 pm
Mr. David Rendel: I begin by making two brief points about previous speeches. First, I thought that the Secretary of State made a bad mistake that I would not have expected of him when he said that, because a particular budget was possible, it must also be right. It is possible for Oxfordshire and Cambridgeshire to set an even lower budget than they will be forced to do if the order is approved tonight. It is possible for them to cut the number of teachers further, to make more teachers redundant and to make class sizes even larger, but that does not make it right. So that was an extraordinarily weak point for the Minister to make.
The second point that I would like to take up was made by the right hon. Member for Witney (Mr. Hurd). There is all the difference in the world between a theoretical increase and the theoretical amount of money that the Government apply to education and the actual decrease in the amount of cash that an authority has to spend.
It is somewhat ironic that the only two authorities being capped tonight are the Oxbridge counties. In the past, the Government have used only two excuses for introducing capping. One is to reduce the overall level of public expenditure and borrowing, and the other—this was referred to by the hon. Member for South-West Cambridgeshire (Sir A. Grant)—is to protect the public from outrageous increases in local taxes, including those levied by loony left authorities in the 1980s, but that is not the case today.
Let us consider those two possible excuses. It is worth examining some of the facts relating to public expenditure. The total of £13 million that the Secretary of State wishes to slice off the Oxbridge budgets amounts to 0.06 per cent. of the public sector borrowing requirement. It amounts to a mere 0.017 per cent. of the total spending by local authorities. As a proportion of total Government outlay, it represents not 1 per cent. or 0.1 per cent.
366
but 0.000046 per cent. In macro-economic terms, it is a spit in the ocean, but for Oxfordshire and Cambridgeshire it will make an enormous difference to service provision.
The second excuse for capping is the need to protect the public from excessive taxation. Hon. Members will agree that, whatever else we say about Oxfordshire and Cambridgeshire local authorities, they are not loony left councils.
Members of all political parties now agree that capping should be lifted. Indeed, the Conservative party agreed that at its conference last year. Our motivations may differ, but the basic reason for cross-party opposition to capping is and always has been that capping inhibits the accountability of local councillors, as well as the ability of local authorities to respond to local needs. Surely that is the whole point of local democracy.
Councils should be free to adopt policies and budgets that match the priorities of their local people. Nobody likes a heavy tax burden, and the iniquities of the council tax are well known. However, if the people of Cambridgeshire and Oxfordshire are willing to pay a little extra to provide their children with the education they deserve, and to ensure that community care is properly funded, who are the Government to deny them their wishes?
There has been a test of local opinion—the local elections only three weeks ago. In Cambridgeshire, the Conservatives suffered a net loss of four councillors. In Oxfordshire, they had a net loss of 14 councillors. The public know who is to blame for the cuts in services and the increases in council tax—the Government—and they have demonstrated their support for the position taken by the current Liberal Democrat and Labour administrations.
Anyone who comes to the House and whines about the difficulties that the poor old taxpayers will have to suffer if they are made to pay such a huge amount of council tax should look at the results of those local elections and realise that that is precisely what the council tax payers voted for. The council tax payers clearly rejected the Conservative alternative. Therefore, it is undemocratic for the Secretary of State to seek to overrule the local decision-making process in those counties. He is clearly not doing so for the sake of local people, who have made it clear that they do not want his solution.
Local people in Oxfordshire and Cambridgeshire clearly do not need protecting from a spendthrift local authority by an economical central Government. On the contrary, they need protecting from central Government and their refusal to follow the wishes of local people as they have expressed them through the ballot box.
Moreover, the argument that Oxfordshire and Cambridgeshire should be capped because central Government should protect people from big spending councils is flawed in a another important way. Let us look a little more closely at how much the counties are spending.
Such things are, of course, relative, so I have chosen, as it happens, the one Conservative-controlled county, Buckinghamshire, for comparison. Buckinghamshire has just under 657,000 people and a budget of £413 million. In 1996–97, the county will therefore spend about £629 a head. Cambridgeshire has a proposed budget of £408 million—£5 million less than Buckinghamshire— but it has 687,000 people, which is 30,000 more than

367
Buckinghamshire. Spending per head is £594. Cambridgeshire spends £35 a head less than Conservative-run Buckinghamshire.
Oxfordshire has a proposed budget of only £344 million, and has 590,000 people. Spending per head is £583. Oxfordshire spends £46 per head less than Conservative Buckinghamshire. We are told from the Government Benches that, in practice, Oxfordshire and Cambridgeshire are expensive councils. The Government should look at their own councils first.
I am not suggesting that Buckinghamshire is spending more than it should; that is not the point. The point is that the Government are using Parliament to impose Whitehall-calculated budgets on two counties on the basis that those counties are spending too much. Yet the evidence is clear: their spending is well below that of the only comparable Conservative authority. Their proposed budgets are moderate to low in terms of pounds spent per head, and they are the minimum that each county needs to maintain quality services.
Let us be under no illusions. The Government are going to impose severe cuts on both counties, which will hurt. We ought to bear in mind just what those cuts will mean. The pain will be felt most by children and their parents and by those who rely on social services—almost certainly, the most vulnerable members of both the communities.
Under the proposed budget, Oxfordshire would spend almost £4 million above the education standard spending assessment. With the cap, it will spend only £300,000 above the SSA. The impact on schools will be acute. As a result of the capping order, at least 160 Oxfordshire teachers are likely to lose their jobs, resulting in redundancy costs of £3.7 million at a time of rising pupil numbers, and increasing burdens being placed on schools by central Government.
One principal summed up the predicament of her Banbury school:
"This September, we had 60 more students with eight less teaching jobs and next September we will have 30 more, plus more in the sixth form."
That Banbury school is set to lose another five teachers.
Oxfordshire's social services are also reeling from cuts made last year, and more cuts this year are the last thing that is needed. I have received details from one woman in Abingdon who suffers from acute arthritis. She can barely move her hands and can walk only short distances, yet she still manages to look after her severely disabled husband. They have the help of a home carer twice a day, but the length of visits has been steadily reduced to less than half an hour. That lady is haunted by the fear that more social services cuts forced by central Government will stop home visits completely. As she says:
"They always ask about family. But we do not have anyone. I have been pressing for more help this year. But I am always given the same answer—there is not enough money in the budget."
Cambridgeshire has the fastest growing population of any English county. Nevertheless, it has had to make real-terms cuts in departmental budgets. Environment and heritage resources have been cut, direct and support services have been cut, transport services have been cut, and social services have been cut. The county has
368
budgeted for additional expenditure on education, but that will be wiped out by the order, which will knock £5 million off its education budget.
If the order is passed, there will be up to 116 teaching redundancies. That will be on top of last year's horrendous settlement. Already, secondary school options have been dropped from the curriculum, and class sizes have risen to the point where sixth-form science students are working in classes of 30. Cambridgeshire's largest secondary school is making every effort to protect its teaching posts this year. Its contingency reserve has been reduced to just £464—not £464,000—and the school has 1,800 pupils.
Social services in Cambridgeshire are also being squeezed, but the order will cut a further £800,000 from its social services budget. Those cuts will have an impact on the 5,000 people who receive home care, the 2,500 people who receive meals on wheels and day-centre meals, and the 500 elderly people who have day care.
The grounds for capping either county simply do not exist. The implications for public expenditure as a whole are, as I have said, negligible. The proposed budgets on the other hand are entirely reasonable. Neither Oxfordshire nor Cambridgeshire can be called a big spender. By persisting with the cap, the Government have shown that Conservatives put party politics before local democracy and the needs of people.
The capping order subverts the electoral process, and will cause great damage to services in Cambridgeshire and Oxfordshire. The young, the old, the weak and the infirm will bear the brunt of the Government's short-sightedness. Capping is wrong in principle, but, by applying it to those two counties, the Government are simply being vindictive and small-minded.
8.25 pm
Mr. Robert Jackson: I thank my hon. Friend the Minister for the courtesy and objectivity with which he received the two delegations from Oxfordshire county council that I brought to see him this year to express the council's concern about the level of its revenue settlement grant and the level of its cap. I welcome the Government's decision to allow Oxfordshire a supplementary credit approval, and I hope that, in subsequent discussions with the county council, Ministers will continue to be helpful in agreeing the amount of approval. On that basis, and in that expectation, I shall be joining my right hon. and hon. Friends in the Lobby after tonight's debate.
Nevertheless, while the effects of the cap will be mitigated by the new credit approval, I do not share the assessment of my right hon. and hon. Friends that the cap on Oxfordshire's budget is "reasonable, appropriate and achievable". I continue to be concerned about its effects in the current financial year and about the implications for next year's finances.
In taking that view, I stress that I agree with my Conservative colleagues on Oxfordshire county council, who also do not consider that Oxfordshire has sufficient resources to finance its services. At the time of the teachers' pay settlement last year, the Conservative group pressed for the difference between the SSA assumption for teachers' pay and the level of the actual settlement to be funded either by the Government or by an increase in

369
the cap. I supported them in that campaign, but it failed, leaving a shortfall of £1.8 million, which of course carries on into this year.
I also supported the Conservative group in its bid in January for an additional £1.9 million above the cap ceiling to cover the costs of the landfill tax and changes in pension fund regulations. I reckon that taking those together amounts to a minimum definition of a shortfall in the current year of at least £3.7 million.
Those have been the views of the Oxfordshire Tories, but at the same time, I have felt obliged to make my own independent judgment of the appropriateness of the limits being placed on Oxfordshire's spending. Last year, I was especially concerned about the level of funding for education that was envisaged in the 1995–96 local government settlement. That concern led me in the end to refuse to support the Government in the final vote on the question. I feel that my judgment has since been vindicated by the Government's decision in this year's settlement to accord special priority to education, with a national increase of 4.5 per cent. in the total standard spending assessment for schools.
In spite of that overall increase in the national level of funding for education this year, I remain of the view that the resources allowed to Oxfordshire are insufficient. That is partly a consequence of the overhang from last year's admittedly over-tight settlement. One of its consequences was that many schools in Oxfordshire drew down their balances, as the Secretary of State for Education and Employment urged them to do. To mitigate the cuts in 1995–96, the schools spent some £5 million from balances that cannot be spent again this year. That is why there is an overhang, for which the Government are at least partially compensating with the new credit approval, which was announced on Monday.
Behind these problems, there lies a deeper problem— that of the SSA system as it affects Oxfordshire. This is the critical issue, as it is the SSA calculations that determine both the level of the Government's grant to the county and the level of the cap that they place on the council tax. The Government are currently reviewing the SSA formula, and it is essential that all parties on Oxfordshire county council come together to agree a common position on the changes needed.
I fully understand that, in any distribution around an average, some are bound to be below the average and some above it. The problem is that Oxfordshire's SSA places us below the average to an extent that plainly does not reflect the reality of the county's financial requirements. For Oxfordshire county council, the national changes in SSAs, including the 4.5 per cent. allowed for education, have this year translated into only a 2.4 per cent. SSA increase, below that of all except seven of the other 34 shire counties.
I find it hard to understand why Oxfordshire has such a low-ranking SSA increase, when it faces above-average increases in the size of the key population groups: nought to four years, 11 to 15,65 to 75 and over 75. The county has estimated that, together with inflation at 2.9 per cent. and the effects of new legislation at 0.75 per cent., these demographic factors at 1.15 per cent. have generated a 5.5 per cent. increase in the need to spend at a constant level of service. Yet Oxfordshire's SSA allows only for a 2.4 per cent. increase, rising to 3 per cent. under the cap ceiling.
370
It is a fair observation that, after Oxfordshire became a hung council in 1985, its expenditure rose too fast. But, in the light of a £45 million cut from the county's budget in the past five years, and in the light of the Audit Commission's comparison of the performance of local authorities, I do not think that it can be argued that nowadays Oxfordshire county council is relatively inefficient. On the contrary, the county council is a comparatively low spender, and the Audit Commission acknowledges that it is one of the more efficient counties.
Nevertheless, I have to say to the county that there is scope for further savings, which the continuing financial squeeze will require it to face up to. Councillors were wrong to reject the advice of the county's officers that Oxfordshire's old people's homes should be "externalised". I believe that the question of the schools structure and the number of schools in Oxford city should be reopened urgently. I also believe that the Government should be more supportive of the proposed changes than they were only a few years ago, when they turned down the county's previous proposals for rationalisation.
I have spoken at length about Oxfordshire's SSA, putting down markers for the review to which the Government are committed and which will, I hope, proceed urgently. I now want to generalise from the situation I have described.
I believe that the Government have become dangerously over-reliant on the principle of formula funding for public services. SSAs were invented to distribute central Government grant amounting to about half local authority funding. There has always been an element of rough justice in the SSA system, but it was a justice that all could understand, and, when needs were understated, the consequences could be mitigated by the local determination of business and domestic rates.
The business rate has now been taken out of the hands of local government and put on a formula basis, while council tax increases have been subject to caps, which in turn are based on SSAs. To borrow an analogy from another area of debate, the Government are trying to play golf with only one club, or—worse—they are forcing local government to play its game with only a single club on a course that is more than ever scattered with bunkers and surrounded by increasingly rough grass.
The Government must recognise the real dangers to locally delivered public services which that trend represents. More than 66 different changes in the methodology by which SSA is distributed were considered for 1996–97. Compared with the previous method of calculation, if all the seven best options had been chosen, Oxfordshire would have had £4 million more SSA than it actually got. If the worst six options had been chosen, Oxfordshire would have been given £9 million less SSA than it actually got.
Over the whole process hangs a promise of improbably large gains and the real spectre of disastrous losses. Meanwhile, the imposition of caps, also based on SSAs, in effect deprives local authorities of the means of coping with these statistical vagaries.
I know that there is a pressing need to control public borrowing and public spending, but I believe that, along with that, it is necessary to recognise that our people continue to expect good public services, and I believe that they are prepared to pay for them. In my view, when the history of the Conservative Governments of the 1980s and

371
1990s comes to be written, their handling of local government will be the unhappiest chapter. It is a pity that the Government's record of success, which has been considerable in so many other areas, should be thus blemished.
8.34 pm
Mr. Andrew Smith: I am grateful to the hon. Member for Wantage (Mr. Jackson) for curtailing his speech to enable me to make this contribution. I will not embarrass him too much by praising the large part of it with which I agreed. It is a great shame that his vote will not follow the logic of his argument.
The hon. Gentleman's speech was a damning indictment of the argument by the right hon. Member for Witney (Mr. Hurd). I have no desire to get into a slanging match with the right hon. Gentleman, who has given distinguished service to this country. However, he has done no service to our county this evening in describing as threadbare the arguments put forward locally by people of all parties and none. I remind him that there were Conservative members on the delegation that originally challenged the SSA. There is no doubt that the balance of opinion, as well as argument, within the county reflects the points made by his hon. Friend the Member for Wantage.
I too rise to speak in defence of essential services in Oxfordshire and the quality of provision, which will be severely damaged if the order is passed; there is no doubt about that. I want to give voice to the widespread and intense anger felt in the county as a result of what the Conservative party is doing to our services.
This debate is not about extra central Government spending. As my hon. Friends know, I would be the last person, as shadow Chief Secretary to the Treasury, to argue for more or to pledge more. However, as hon. Members know, in the matter of local authority finances, there is quite properly a choice to be made locally—the trade-off between the level of council tax and the level of local services.
As my hon. Friend the Member for North-West Durham (Ms Armstrong) said, except in the most exceptional circumstances, it should be up to local people to make that decision, and councillors should be accountable through the local electoral process. The order denies that choice to the people of Oxfordshire, just as it denies it to the people of Cambridgeshire.
Conservative Members should be under no illusions. Passing the order this evening will mean larger classes, poorer delivery of the national curriculum, an inability to cope with the pressure on residential home provision, cuts in family support services and care in the community, damage to library services and more accidents on even more poorly maintained roads. Up to 50 more teachers will lose their jobs on top of the 110 teachers in Oxfordshire who will lose their jobs even with the budget that the county council wants.
The damage that the order will impose is opposed by the overwhelming majority of Oxfordshire people. I pay tribute to the energetic and well-argued campaign waged locally by people of all parties and none, and to the public-spirited crusade that the Oxford Mail has run in support of local services. Local Members of Parliament
372
have been inundated with petitions, letters, faxes and telephone calls from tens of thousands of Oxfordshire residents, 99 per cent. of whom have pleaded with them to oppose the cap and the cuts that will result.
Conservative Members should understand that, in voting for the order tonight, they are giving the strongest possible message to the people of Oxfordshire, the people of Cambridgeshire and the people of the country as a whole that today's Conservative party does not listen, does not care and is not fit to have ultimate control over people's education, social services, libraries and other local provisions.
The Government will argue, as they have before, that they have provided some extra flexibility by encouraging an application for extra borrowing approval in Oxfordshire. That will, indeed, help a little, but no figure has been given, so such an application can only ease some of the short-term transitional problems of implementing the capped budget, such as teacher redundancies. What is more, the Government's argument exposes their bankrupt logic. They will encourage extra borrowing to allow teachers to be sacked. What sort of system is that?
Like the hon. Member for Wantage, I thank the Minister of State for the courteous and seemingly open-minded hearing he gave our representations. However, I do not believe that he has listened enough, or that he has taken full account of the unfair damage that the cap will do to Oxfordshire's services. But, of course, he faced the problem that local Conservative councillors—who had supported our initial representations on the SSA—did not join us in opposing the cap and the damage that it would inflict. If he was receiving advice from such hon. Members as the right hon. Member for Witney, I am not surprised that Oxfordshire has come out of this as badly as it has.
I have no doubt that, if all Oxfordshire Members of Parliament had spoken up for their constituents' interests, and if Conservative councillors had joined us in this campaign, Oxfordshire could and would have extracted a better deal, even from this Government. As it is, the damage will be great. People in Oxfordshire are and will remain very angry.
No one has been able to answer one very simple question. Oxfordshire is not one of the councils that annually knocks on the Minister's door to object to capping and to plead special difficulties. The council supports, as do I, the drive for value for money in public services.
The council has already made very severe cuts in services. As we have heard, in the past five years it has already cut no less than £45 million from its expenditure. Its staffing levels have already been cut, including—last year alone—the loss of 220 teachers and educational support staff.
The council is an efficient authority that has been at the forefront of voluntary competitive tendering. Moreover, Audit Commission performance indicators show that the county has the third lowest expenditure per head of all the shire counties. So how on earth can the Government argue that this very low-spending county is somehow an overspender? That exposes the fallacy and the nonsense of the way in which the SSA system works, as the hon. Member for Wantage said a few moments ago.
Mr. Robert Jackson: Will the hon. Gentleman, who has a position in this matter as shadow Chief Secretary, tell us whether the Labour party intends to change that system?
Mr. Smith: The position is quite clear. I refer the hon. Gentleman to our documents on local authority organisation and expenditure, in which we make it very clear that—yes, indeed—we intend to review the system for local government support so as to make it fairer and to enable local democratic preferences properly to be expressed and reflected in local budgets, so that local people have the say in determining the level of resources of local services, which are there to meet local needs. That is what people want in Oxfordshire, that is what they want in Cambridgeshire, and that is what they want across the country.
As it is, this order is very damaging, as the hon. Member for Wantage knows very well. It is being imposed on two county councils that are already among the lowest spenders. What nonsense it is to claim that Oxfordshire—the third lowest-spending county per head of population—is somehow an overspender that must be punished. That punishment is being inflicted on children, on the elderly, and on vulnerable people who are most dependent on the essential services of our county. It is nonsense—very damaging and unfair nonsense—for which the Conservative party will pay dearly, and which today the House should reject by voting down the order.
Question put:—
The House divided: Ayes 174, Noes 118.

Division No. 132]

[8.43 pm

AYES

Ainsworth, Peter (East Surrey)

Duncan, Alan

Alexander, Richard

Duncan Smith, Iain

Alison, Rt Hon Michael (Selby)

Dunn, Bob

Amess, David

Durant, Sir Anthony

Arnold, Jacques (Gravesham)

Elletson, Harold

Arnold, Sir Thomas (Hazel Grv)

Emery, Rt Hon Sir Peter

Atkinson, David (Bour'mouth E)

Evans, David (Welwyn Hatfield)

Atkinson, Peter (Hexham)

Evans, Jonathan (Brecon)

Banks, Matthew (Southport)

Evans, Nigel (Ribble Valley)

Bates, Michael

Faber, David

Batiste, Spencer

Field, Barry (Isle of Wight)

Body, Sir Richard

Fishburn, Dudley

Boswell, Tim

Forman, Nigel

Bottomley, Peter (Eltham)

Forth, Eric

Bowden, Sir Andrew

Fox, Dr Liam (Woodspring)

Bowis, John

Fox, Rt Hon Sir Marcus (Shipley)(

Boyson, Rt Hon Sir Rhodes

Freeman, Rt Hon Roger

Brazier, Julian

French, Douglas

Bright, Sir Graham

Gale, Roger

Brooke, Rt Hon Peter

Gardiner, Sir George

Browning, Mrs Angela

Gillan, Cheryl

Carlisle, John (Luton North)

Goodlad, Rt Hon Alastair

Carlisle, Sir Kenneth (Lincoln)

Goodson-Wickes, Dr Charles

Carrington, Matthew

Gorman, Mrs Teresa

Carttiss, Michael

Gorst, Sir John

Cash, William

Grant, Sir A (SW Cambs)

Chapman, Sir Sydney

Greenway, John (Ryedale)

Clappison, James

Griffiths, Peter (Portsmouth, N)

Clark, Dr Michael (Rochford)

Gummer, Rt Hon John Selwyn

Clarke, Rt Hon Kenneth (Ru'clif)

Hamilton, Rt Hon Sir Archibald

Clifton-Brown, Geoffrey

Hamilton, Neil (Tatton)

Colvin, Michael

Hargreaves, Andrew

Conway, Derek

Haselhurst, Sir Alan

Coombs, Anthony (Wyre For'st)

Hawkins, Nick

Coombs, Simon (Swindon)

Hayes, Jerry

Couchman, James

Heald, Oliver

Cran, James

Heathcoat-Amory, Rt Hon David

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

Hendry, Charles

Curry, David (Skipton & Ripon)

Hogg, Rt Hon Douglas (G'tham)

Deva, Nirj Joseph

Horam, John

Dover, Den

Hughes, Robert G (Harrow W)

374

Hunt, Rt Hon David (Wirral W)

Scott, Rt Hon Sir Nicholas

Hunt, Sir John (Ravensbourne)

Shaw, David (Dover)

Hunter, Andrew

Shephard, Rt Hon Gillian

Hurd, Rt Hon Douglas

Shepherd, Sir Colin (Hereford)

Jack, Michael

Shepherd, Richard (Aldridge)

Jackson, Robert (Wantage)

Sims, Roger

Jenkin, Bernard

Smith, Sir Dudley (Warwick)

Jessel, Toby

Smith, Tim (Beaconsfield)

Jones, Gwilym (Cardiff N)

Spencer, Sir Derek

Jones, Robert B (W Hertfdshr)

Spicer, Sir James (W Dorset)

King, Rt Hon Tom

Spink, Dr Robert

Kirkhope, Timothy

Spring, Richard

Knapman, Roger

Sproat, Iain

Knight, Mrs Angela (Erewash)

Squire, Robin (Hornchurch)

Knight, Rt Hon Greg (Derby N)

Stephen, Michael

Knox, Sir David

Stern, Michael

Kynoch, George (Kincardine)

Stewart, Allan

Lait, Mrs Jacqui

Streeter, Gary

Lang, Rt Hon Ian

Sweeney, Walter

Legg, Barry

Sykes, John

Lidington, David

Tapsell, Sir Peter

Lloyd, Rt Hon Sir Peter (Fareham)

Taylor, John M (Solihull)

Luff, Peter

Thomason, Roy

MacKay, Andrew

Thompson, Sir Donald (C'er V)

McLoughlin, Patrick

Thompson, Patrick (Norwich N)

Mans, Keith

Townsend, Cyril D (Bexl'yh'th)

Marland, Paul

Tracey, Richard

Marlow, Tony

Trend, Michael

Marshall, John (Hendon S)

Viggers, Peter

Martin, David (Portsmouth S)

Walden, George

Mates, Michael

Wardle, Charles (Bexhill)

Moate, Sir Roger

Waterson, Nigel

Montgomery, Sir Fergus

Watts, John

Neubert, Sir Michael

Wells, Bowen

Newton, Rt Hon Tony

Whitney, Ray

Nicholson, David (Taunton)

Whittingdale, John

Norris, Steve

Widdecombe, Ann

Oppenheim, Phillip

Wilkinson, John

Ottaway, Richard

Willetts, David

Page, Richard

Winterton, Mrs Ann (Congleton)

Paice, James

Winterton, Nicholas (Macc'fld)

Porter, David (Waveney)

Wolfson, Mark

Powell, William (Corby)

Wood, Timothy

Redwood, Rt Hon John

Young, Rt Hon Sir George

Renton, Rt Hon Tim

Richards, Rod

Tellers for the Ayes

Robathan, Andrew

Mr. Simon Burns and

Sackville, Tom

Mr. Gyles Brandreth.

NOES

Allen, Graham

Clwyd, Mrs Ann

Armstrong, Hilary

Connarty, Michael

Ashdown, Rt Hon Paddy

Corbyn, Jeremy

Barnes, Harry

Cunningham, Jim (Covy SE)

Barron, Kevin

Darling, Alistair

Battle, John

Davidson, Ian

Bayley, Hugh

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

Beckett, Rt Hon Margaret

Denham, John

Beith, Rt Hon A J

Dewar, Donald

Benn, Rt Hon Tony

Dixon, Don

Benton, Joe

Dobson, Frank

Bermingham, Gerald

Dowd, Jim

Berry, Roger

Eagle, Ms Angela

Betts, Clive

Etherington, Bill

Blunkett, David

Field, Frank (Birkenhead)

Boateng, Paul

Foster, Rt Hon Derek

Byers, Stephen

Foster, Don (Bath)

Caborn, Richard

Fraser, John

Campbell, Mrs Anne (C'bridge)

George, Bruce

Campbell, Menzies (Fife NE)

Gerrard, Neil

Campbell, Ronnie (Blyth V)

Godman, Dr Norman A

Carlile, Alexander (Montgomery)

Godsiff, Roger

Chisholm, Malcolm

Grant, Bernie (Tottenham)

Church, Judith

Griffiths, Win (Bridgend)

Clapham, Michael

Gunnell, John

Clarke, Tom (Monklands W)

Hanson, David

375

Hardy, Peter

Prentice, Bridget (Lew'm E)

Harman, Ms Harriet

Prentice, Gordon (Pendle)

Harvey, Nick

Primarolo, Dawn

Hill, Keith (Streatham)

Quin, Ms Joyce

Hinchliffe, David

Raynsford, Nick

Hoey, Kate

Rendel, David

Hoon, Geoffrey

Robertson, George (Hamilton)

Hughes, Kevin (Doncaster N)

Sedgemore, Brian

Hughes, Robert (Aberdeen N)

Sheerman, Barry

Hughes, Simon (Southwark)

Short, Clare

Jamieson, David

Simpson, Alan

Jenkins, Brian (SE Staff)

Skinner, Dennis

Jones, Lynne (B'ham S O)

Smith, Andrew (Oxford E)

Jones, Martyn (Clwyd, SW)

Smith, Llew (Blaenau Gwent)

Jones, Nigel (Cheltenham)

Soley, Clive

Keen, Alan

Spearing, Nigel

Kennedy, Charles (Ross,C&S)

Spellar, John

Khabra, Piara S

Squire, Rachel (Dunfermline W)

Kirkwood, Archy

Stevenson, George

Lewis, Terry

Strang, Dr. Gavin

Loyden, Eddie

Sutcliffe, Gerry

MacShane, Denis

Taylor, Matthew (Truro)

Madden, Max

Tipping, Paddy

Maddock, Diana

Trickett, Jon

Mahon, Alice

Tyler, Paul

Mandelson, Peter

Walker, Rt Hon Sir Harold

Marshall, Jim (Leicester, S)

Wardell, Gareth (Gower)

Michael, Alun

Wilson, Brian

Miller, Andrew

Winnick, David

Morgan, Rhodri

Wise, Audrey

Mudie, George

Worthington, Tony

O'Brien, Mike (N W'kshire)

Pearson, Ian

Tellers for the Noes:

Pike, Peter L

Mr. Robert Ainsworth and

Pope, Greg

Mr. John Cummings.

Question accordingly agreed to
Resolved,
That the draft Council Tax Limitation (England) (Maximum Amounts) Order 1996, which was laid before this House on 20th May, be approved

A406 (Chingford)
Motion made, and Question proposed, That this House do now adjourn.—[Dr. Liam Fox.]
8.54 pm
Mr. Iain Duncan Smith: Although we have a little more time than usual, I hope not to detain the House or my hon. Friend the Minister for longer than necessary or for longer than I had anticipated.
The subject of the debate is the improvements to the A406 north circular road from Silver street to Hall lane. It is not usual for hon. Members even to contemplate raising such matters in the House, but I do so because, as my hon. Friend will see, the roadworks in question have caused a great deal of frustration and highlight the apparent inability of anyone to take responsibility for the hardship that residents have suffered and for what I now regard as the destruction of their daily lives.
The work on the A406 has caused my constituents severe problems, not only because of traffic congestion and noise but because of dust, the constant coming and going and the digging of ditches in the general area. Additional problems were caused by the way in which my constituents have been dealt with. I ask my hon. Friend to remember the unusually hot summer of 1995 when all my constituents, except the residents of Hall lane, were able to enjoy their gardens and have their windows open when the heat was intense. For the past two summers, residents of Hall lane have been locked in their houses, unable to have their windows open because of the dust and noise. Their gardens have essentially become no-go areas, which has forced them to take their children elsewhere to play. That may at first appear a small matter, but after two years it takes on greater proportions.
We all accept that the roadworks are important as they will help to relieve traffic congestion, but I wish to raise some serious matters which I hope that my hon. Friend the Minister will consider reasonable. I shall go quickly through parts of a diary compiled by the people involved, which shows exactly what kind of nightmare they have experienced and how they have been treated. The combined diary was compiled by four people: Mrs. Mansoor of 317 Hall lane, Mrs. Fenton of 323 Hall lane, Mrs. Biggadike of 325 Hall lane and Mrs. Cook of 327 Hall lane.
The diary starts on 12 April 1994, not long after the roadworks commenced, when residents were offered double glazing. After they had badgered the authorities, Enfield council, which I understand was responsible for providing the grant, offered double glazing only for the front of their houses. That was the beginning of the row, because the position of the houses means that double glazing was necessary on at least two sides. The roadworks in effect wrap themselves around the properties and the noise and dust affects both sides.
Compressor noise began on 17 April and often continued through the night. On 7 May, the noise started earlier than intended. The usual story is that the noise started at 7 am and continued for the rest of the day, making it impossible for residents to go into their gardens. On 9 May, the diary records that there was again noise all day. On 16 June, generators were left on through the night, as happened on many other occasions.

377
On 17 June—let us remember that this was the summer of 1994—the noise started first thing in the morning, disrupting the residents for the rest of the day.
The thudding of lorries and the various other noises from major roadworks went on all the way through 1994 and into 1995. My hon. Friend the Minister will also note that, on a variety of days, residents wrote to complain to a number of authorities. On 4, 11 and 22 July and 8 August, they wrote a series of complaints to the Highways Agency. None was answered.
On 23 September, they were exasperated when a hole was dug in the road. Instead of sorting it out, the company slung a metal sheet over the top. All through the following night, residents were unable to sleep because heavy lorries were thumping up and down the road and waking them up. I am told that the vibrations were phenomenal. The diary entries tell almost exactly the same story. The residents expected work to take place during reasonable hours, but—perhaps because the contractors were falling behind—the hours were stretched. The residents' lives were abused because no one contacted them. Instead, the people involved simply acted beyond their brief. They started earlier, finished later and quite often did not check whether machinery was left on. Holes that had been dug in the road were left unfilled, creating problems with lorries. The lives of residents were made absolute hell.
The times on which work could be carried out were restricted, but Nuttalls wrote to the London borough of Waltham Forest to apply to work continuously to destroy the Lea valley storm water channel. The council agreed on the basis that the work would not cause excessive noise, and allowed Nuttalls to work seven days a week from 1 July. The change meant that the residents did not have a moment's peace during the whole week. Their occasionally peaceful times on Sundays now seemed to have gone for ever. The new Sunday working started at 7 am and quite often went on until 10 pm, and I draw my hon. Friend's attention again to the fact that it was a hot summer at that time. The new schedule meant that the residents' gardens were locked off to them on Sundays, and they all found it quite impossible. Nuttalls, who were blamed for the Sunday working, in turn blamed the people laying gas pipes or water mains. Everyone blamed everyone else, but the outcome was that my constituents had to suffer a seven-days-a-week nightmare.
The residents were not consulted on the increase in the working week. When work started, they felt that the noise of the demolition of the old viaduct was excessive, despite the fact that the local authority said that that would not be the case. That was the basis on which the authority had allowed the extra work. In a letter of 27 June to the residents, who had by now formed themselves into the Hall Lane Residents Association, the London borough of Waltham Forest environmental protection department said that work that did not disturb neighbours was permitted outside these hours. But, as the residents pointed out endlessly, that was not the case, and the noise was excessive in the sense that it was almost the same as would have been the case during a normal working day. On 8 July, piling work was done and machines were left on while that work was taking place on the Saturday from 7.30 am to 11 am. On 31 July, the machines worked from 7.30 am around the clock.
Double glazing and secondary glazing grants were obtained for the front of the properties from Enfield council, acting as agents for the Highways Agency.
378
But the row continued about the requirement for double glazing for the rear of the houses. There was a flat refusal by the Highways Agency to allow the residents to put in double glazing. That struck me as a mean-minded and petty point; the authority should have understood the nature of the complaints from my constituents. The residents were told that the noise that was measured at certain times of the day did not reach the absolute maximum that would have allowed the Highways Agency to agree to provide double glazing. That struck me as a small way to behave towards a small number of residents, who were therefore unable to have any satisfaction or relief from the noise even inside their houses.
The problems continued endlessly, however. The residents became sealed into their homes, unable to leave. One 84-year-old constituent of mine who lived just up the road had to be carried over a ditch outside her house because she was unable to cross it: she was manhandled over it and back for two weeks. A situation that was supposedly temporary—it was meant to last for only a few days—lasted for a fortnight.
The bureaucratic excuses mounted. Attempts were constantly made to spread the blame; no one seemed to be responsible. If residents went to one side—be it the Highways Agency or Frederick Snow—they were told that the other side was responsible. Alternately, they were told that they should look to the insurers, or that Nuttalls was responsible. When they went to Nuttalls, they were told that the fault lay with someone laying pipes in conjunction with the firm, or with the gas or water company. When they raised the matter with those companies, they were told that Nuttalls was doing all the damage. They were chased from one concern to another.
I share that frustration. Having met my constituents in their homes and discussed their problems with them, and having visited the area a number of times to try to experience the noise and dust that they were experiencing, I took up the issue with the various parties. As my hon. Friend the Minister probably already knows—he will certainly know from what I have said tonight—I was given the runaround by exactly the same agencies. I might just as well have been a resident.
On 19 May I wrote to Lawrie Haynes, chief executive of the Highways Agency, after a meeting of the residents of Hall lane. I wrote:
"Apart from the fact that these road works have been going on since February 1994, they have been joined by British Gas and Thames Water relaying pipes. What is of the greatest concern to me is that throughout this period the residents have received very little assistance from the Highways Agency and have had to fight tooth and nail in order to get the agency to accept the fact that they have had to put up with appalling conditions.
On a recent visit to these houses during the day it is perfectly obvious that the cracks in their walls and ceilings and the ever present dust are clearly as a result of all the work being carried out outside their front doors. They do not ask for much, but after having received grants for from insulation they have discovered that this was not enough to keep out the noise and dust from the road works, they have spent the past eight months trying to secure insulation for the rear of their properties.
Each of the organisations they have contacted about the work being carried out outside their properties blame the other for the disruption. The residents are understandably feeling more and more frustrated."
It did not seem much to ask, I said, that people who had been affected as badly as my constituents, whose environment had been so disrupted, should not have to

379
fight so long even to have that acknowledged, let alone dealt with. A bit of common sense and understanding could have resolved the matter at an early stage, and avoided the unnecessary blighting of lives. I concluded:
"I should be grateful if you and an independent assessor could visit these homes."
We seemed to be engaged in a Chingford version of the Scottish reel. All those responsible were running around my constituents; every now and then, one would dip his head and move on.
The Highways Agency eventually replied to my letter of 19 May on 23 August. Its chief executive, Lawrie Haynes, wrote:
"I am concerned that the residents feel their complaints have not been properly addressed. Under the contract the contractor is responsible for dealing with all claims for damage arising from the works, including valid claims for unavoidable damage. The contractor is also responsible for ensuring that the works are carried out without unreasonable noise, disturbance or damage and it is for the contractor to see that his work-people and sub-contractors behave carefully and avoid causing injury to other people."
No one appears to have pressed the contractors to carry out their contractual obligations.
Residents were then told by the construction engineers, Frederick Snow, that they were fed up with Nuttalls— the contractors—who had failed to keep their promises to improve matters for residents. That was in a letter from my constituent Mrs. Biggadike. I wrote to the chief executive of Nuttalls on 5 October. I said in my letter:
"These people have been passed back and forward between all those involved with the building of this road and it is high time that this matter was resolved."
I was graced with no reply from Nuttalls. To this day, I await a reply from the chief executive. On 3 May, I was forced to write again to Nuttalls. I said:
"What has become very clear is that both Sir Frederick Snow and the Highways Agency believe that the responsibility for much of the problem lies in your hands and that your company should rectify this."
I do not intend to detain my hon. Friend the Minister much longer, but I must ask him a series of questions. In something as major as this set of roadworks, which clearly has to take place and is likely to bring great benefit to the area, as my hon. Friend knows, why are the contractors and those working in the area allowed simply to get away with behaving so intolerably to those who live there? All my constituents accepted that they would have to put up with difficulties and with a degraded quality of life for a period of time. What they did not accept and could not understand was why they were treated as though their lives were so insignificant to those carrying out the work. They have been ignored, shunted from pillar to post and left to hang—in the hope, I suspect, that if they were left long enough they would not bother the contractors or anyone else any more.
The residents' demands amount to about four or five action points. They still want grants for the cost of double glazing to the rear of their properties. They want the damage from piling—the massive vibrations that cause cracks—resolved by an independent surveyor. Dust, noise and exhaust fumes have taken their toll and they want a full examination of those problems. As they have said, they want compensation for the general state of their houses and the filth that they have had to put up with.
380
Most of all, they want someone to tell them at some stage, "Mea culpa: I will resolve this—it is my problem and I will sort it out for you; let us resolve the matter." Why can we not force someone to say, "The buck stops here"?
9.11 pm
The Minister for Transport in London (Mr. Steve Norris): I congratulate my hon. Friend the Member for Chingford (Mr. Duncan Smith) on bringing these matters to the attention of the House. It is one of the huge virtues of our parliamentary system that he is able to draw to the attention of the House his concerns on behalf of the residents of Hall lane. If he is in any doubt as to where the buck stops, I am sure that you, Mr. Deputy Speaker, will be prepared to remind him that it has stopped here and now at this Dispatch Box tonight. I shall endeavour to do what I can to answer his concerns and set his mind at rest. He will know that I have one advantage, in that he and I are neighbours in that part of London and I know Hall lane extremely well.
I am sorry to hear about the problems that the residents of Hall lane have been experiencing. Obviously, they have had to contend with a lot of activity in the vicinity while the improvements have been carried out. I very much regret that the inconvenience that has been caused by the roadworks is to some degree inevitable. I am grateful to him for acknowledging the fact that it is impossible to construct a scheme of that sort without some disruption.
The contractor is instructed, however, to ensure that the works are carried out without unreasonable noise, damage or disturbance, and we try to make every effort to ensure that that disruption is kept to a minimum. We try to eliminate some of the noise problems before construction begins, and all the properties in Hall lane that were eligible under the use criteria were insulated against noise.
I suspect that my hon. Friend will know that there are two bases on which we consider the adverse effect on properties. One is the adverse effect during construction and the other is the effect on properties once the road scheme is in use. We project forward noise levels some six years from the date of opening to allow for traffic growth. With those use criteria, we insulated those properties against noise, had secondary glazing installed or offered to make a grant towards double glazing.
Traffic noise calculations for properties in the vicinity of a road improvement scheme are all made on the same basis. Only properties that are predicted to receive noise above the minimum qualifying level receive an offer of secondary glazing. I know that some residents were very disappointed that they did not receive an offer of insulation for the rear facades of their properties, but I hope that my hon. Friend accepts that we are restricted in what we can do, because we have to comply with the Noise Insulation Regulations 1975, which apply to traffic noise.
On construction noise, we have to consider matters carefully, given the limited time scale between the nuisance and making offers to residents. It would need to be shown that such insulation would be of positive and long-term benefit and that it gave value for money. We offered noise insulation to 19 eligible properties in Hall lane, and 11 residents accepted our offer. About half of those were because of anticipated construction noise.
My hon. Friend pointed out that there has been some confusion about relevant contact points when problems and queries arise. I sympathise about that, but I hope that

381
he accepts that the brochure that we issued at the beginning of the works, explaining the improvements to the local residents, stated clearly the names and telephone numbers of the representatives on site. Whenever verbal complaints have been received from members of the public, they have been advised that the consultant's representative, the resident engineer, is the first point of contact and that the consultant's representative is there for any complaints that arise during the course of the works.
The resident engineer has clear instructions on the action to take once he is aware of a problem. If the complaint is about work being carried out on site, perhaps about the position of machinery or noise levels, and the contractor is working outside the conditions of his contract, he will take action and follow it up with the contractor. However, it is not always simple to put matters right when, for example, special equipment is not available, or lane closures are required for access to enable remedial work to be carried out. Traffic management, safety measures and so on, all have to be taken into consideration. The resident engineer operates specifically within the contract and statutory regulations framework.
If the complaint is a potential third-party claim for damages, the resident engineer has to decide who should deal with it. The contractor's insurers are usually the first port of call, but it may be necessary to involve the district valuer or a statutory undertaker who is not working on the scheme. Again, under the contract, the complaint may need to be referred directly to the Highways Agency. Complaints are passed on to the relevant person for follow-up action, and every member of the public concerned should receive a written reply advising them what has happened to their complaint or claim.
I know that the Highways Agency has recently been alerted to correspondence between Nuttalls, the contractors, and my hon. Friend. I am distressed to learn of the discourteous way in which my hon. Friend's correspondence appears to have been treated, although I note from a copy of a letter from the chief executive that he claims that my hon. Friend's earlier letter was not received. I am sure that he accepts that assurance. I know that the contractor is concerned that the residents of Hall lane believe that they have been badly treated by the contractor and he will, at the earliest opportunity, take the necessary steps to resolve those issues.
I shall ask the Highways Agency to ensure that the contractor's working methods comply fully with the terms of the contract because I am distressed to learn of the details that my hon. Friend has given, which suggest that standards have fallen below those that residents adjacent to such schemes are entitled to expect. I understand that certain residents were especially inconvenienced by maintenance works carried out by Thames Water. Although they were carried out concurrently with the contract, they were not connected with the scheme or with the Highways Agency work.
We try to ensure that all claims made by the public, especially those who live and work close to the improvement scheme, are dealt with promptly and that they are passed to the contractor and his insurers by the resident engineer.
I shall set out the framework, because it is important that my hon. Friend understands the framework in which contracts always operate. Under this contract, the
382
contractor is required to indemnify the Secretary of State against all third-party claims arising from the works, including valid claims for unavoidable damage or loss. On that basis, we cannot interfere directly with the contractor's responsibilities, but we do monitor progress on third-party claims and we ask our consultants to remind the contractor of his responsibilities for resolving and settling claims for damage and disruption.
For the record, there have been seven third-party claims from residents in the vicinity, of which two have been settled, four have not been followed up by the claimants and one is being assessed. In the context of a scheme of that type, that is not an especially large number of claims, but equally, there is no excuse for the intolerable behaviour described by my hon. Friend, and I shall ensure that the Highways Agency takes that point very seriously.
The contractor is responsible for the work methods of his work force and of subcontractors employed by him, and he must ensure that they conduct themselves responsibly, paying close attention to the safety interests of local people and the travelling public. We and the Highways Agency are not in the best position to do so, and I am sure that my hon. Friend appreciates that. If we did become involved, we would dilute the responsibility of the contractor for his staff, and I am keen that we should not enter such a situation.
I appreciate that some residents have been worried about the reduction in value of their properties, because my hon. Friend mentioned that issue to me when he was fortunate enough to secure the debate. In certain circumstances, they may claim compensation under the provisions of part I of the Land Compensation Act 1973. To qualify for that compensation, the reduction in value must be directly attributable to the use of the new road and must be caused by factors such as noise, vibration or smoke.
A booklet is available from the agency, entitled "Your Home and Nuisance from Public Development", which explains the basis of compensation and eligibility. I am happy to let my hon. Friend have as many copies as he likes or to send them directly to anyone who he would like to receive them.
The district valuer, who is entirely independent of the Department, as my hon. Friend knows, is responsible for assessing, negotiating and recommending the amount of compensation payable. The claim period begins a year after the road is open to public traffic, and lasts for six years. Notices will be published in local newspapers nearer the time, advising people of their rights under the Act and explaining how to make a claim.
In essence, that is the protection that people are given by Parliament in terms of any substantial difference in the noise levels once the scheme, having been completed, is in operation. It is important to bear it in mind that that means, not that a specific, absolute level of noise is attained a year after the scheme is open, but more especially that there has been a significant difference in the noise level as the basis on which compensation is payable.
I hope to end, if my hon. Friend will allow me, on a slightly more optimistic note, because he and I know, and I am pleased to be able to report, that the improvements on the north circular at the Hall lane site are almost complete.

383
The south end of Hall lane has been identified for planting in our outline landscape proposals, and it is our intention to approach residents there shortly, with a view to carrying out some off-site screen planting in their gardens by agreement as soon as practicable. As my hon. Friend knows, Hall lane runs effectively at right angles to the north circular, and the planting in the front gardens of those properties will provide screening against the sight of the scheme and, one hopes, some amelioration, but that will be done in co-operation with the residents.
Major civil engineering works of the type that we have carried out on that site—the north circular road being one of the largest civil engineering works of its kind in the country, and certainly a very long-standing scheme in the area that my hon. Friend and I represent—inevitably cause some inconvenience and disruption. For that, I offer my
384
condolences to people locally. I am grateful to my hon. Friend for being so generous as to accept that, in such circumstances, sadly, there will be an element of disruption. It was the type of summer that probably aggravated the dust and the general effect of such a scheme.
We shall try to minimise problems on the site. I assure my hon. Friend that, if he has any further concerns, he has only to raise the subject with me and I shall personally deal with the matter and with Mr. Haynes at the Highways Agency, who, in my experience, has always been extraordinarily co-operative and helpful.
At the end of a day not long from now, local people in that area will begin to enjoy the benefits of the improvements instead of the rather more unfortunate short-term side effects.
Question put and agreed to.
Adjourned accordingly at twenty-five minutes past Nine o'clock till Tuesday 4 June, pursuant to Order [13 May].