Commons Sitting of 30 October 1996

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

  Windfarms and Telecommunications Towers (Scotland)
  Motion made, and Question proposed, That this House do now adjourn. —[Mr. Bates.]
  9.34 am
  Sir Hector Monro: I am glad to have the opportunity to raise important planning issues in Scotland relative to windfarms and telecommunications towers. I am pleased that my hon. Friend the Under-Secretary of State is able to be with us. I know that he will give us the Government's view later.
  If I were to declare an interest, it would be a deep love of the countryside. At one time, I was a Minister at the Scottish Office with responsibilities for the environment. I was a member of the Nature Conservancy Council and of various governing bodies that are interested in the countryside. I am not, however, involved in any pressure group.
  I am concerned about the number of tele-communications towers everywhere in the countryside and the ever-increasing number of windfarms. Both types of structure are serious blots on the countryside and on the landscape generally. I believe that we require stricter controls.
  It is no use the Government, who are keen on raising standards in the countryside, producing splendid glossy papers on the countryside, on our coastline, on rural improvements, on environmentally sensitive areas, on scenic areas and special protection areas, for example, if we allow unattractive pylons and generators to spread without the most careful consideration and thought.
  Whatever we think of technical achievements, they do not enhance the scenic beauty of Scotland or elsewhere. I shall begin with telecommunications pylons. The masts sprout up almost anywhere without planning permission. I accept, of course, that modern technology is important. We must accept that the world has mobile telephones and other means of quick communication. I accept also that we need a first-class telecommunications system if we are to use such equipment.
  Masts are permitted developments stemming from the Telecommunications Act 1984, the subsequent Scottish Office Development Department guidelines—25/85—and the general development order that was introduced in 1992.
  Dame Elaine Kellett-Bowman: I accept that telecommunications masts in Scotland and elsewhere
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  are ugly. Does my right hon. Friend include in his diatribe the equally ugly electricity pylons and poles that are used instead of taking the system underground?
  Sir Hector Monro: I have not really started my diatribe. I appreciate, of course, my hon. Friend's thoughts.
  If we were to begin again by taking ourselves back to 1900 instead of living in years near to the year 2000, we would think twice about the distribution of electricity by means of vast pylons, and by smaller pylons as the supply comes nearer and nearer to individual homes. There are a huge number of vast and unattractive pylons. Some were erected during the war. There are some in the valley near my old home, which were erected during the 1940s, when no one really understood what was going on in terms of planning. There is a pylon line right through the centre of the valley floor between Langholm and Hawick, which looks most unattractive. With hindsight, I am sure that we would not allow that to happen now. Much more consideration would be given to placing pylons nearer the hillside and below sight lines wherever possible.
  Pylons cause great sadness to those who are interested in scenic beauty, and telegraph poles can be extremely dangerous when placed alongside roads. We know that cars frequently crash into them. If we were able to start again, I am sure that we would put many more heavy electrical cables underground.
  There is no requirement to obtain permission from a planning authority before erecting telecommunications masts. I appreciate, of course, that orders and guidelines emphasise that developers must take account of the countryside and, in sensitive areas, must consult local authorities. That is in black and white. It is disappointing, however, when we see what such consultations have produced. It is time to reconsider our flexible and laissez-faire attitude to developers putting up masts wherever they want; if there is a code of practice, it is not effective.
  There are masts and pylons all over the place. For obvious technical reasons, they have to be on the tops of hills or ridges, so they are extremely obtrusive; wherever one drives, one sees masts and little blocks of telecommunications structures. The masts can be 15 m high—or 50 ft, as I much prefer to use the old English terms rather than modern European jargon—and, if they are on buildings, the first 30 m is no problem, so there can be a 150 ft building plus a 50 ft tower on top, which means that a mast can be 200 ft high, without authority. That, however, is not my prime concern; I am more concerned about the free-standing towers all over the countryside.
  Mr. David Harris: Only last week, I took up that very point with my hon. Friend the Minister for Construction, Planning and Energy Efficiency, because the problem is widespread and we are now being afflicted by it in Cornwall, where mobile telephone masts are popping up all over the place in exposed positions. My right hon. Friend can rest assured that he has the backing of every hon. Member who represents a rural constituency, from Land's End to John o'Groats.
  Sir Hector Monro: How right my hon. Friend is. Nobody looks after the interests of Cornwall and the Cornish coastline more than he does.

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  The phenomenon has grown like Topsy, and I expect that my hon. Friend the Minister will say that, with hindsight, we were a little free and easy with the arrangements that we made in the 1980s and that we did not expect quite such a rash of masts. The need to provide the best possible telecommunications for the general public must be balanced against their right to retain their beautiful countryside.
  There are many anomalies: I understand from a newspaper article that I can put up a flagpole with a Union flag without authority, but that I would need to have planning authority to erect a flagpole to fly my own flag. If authority is needed to put up a flagpole, why on earth is it not needed to put up a telecommunications tower? Has my hon. Friend the Minister any idea how many masts there are in Scotland? What are we doing about sharing masts? Why should not the companies get together and share masts in the interests of the beauty of the countryside? Each police constabulary has its own system, but might not the police share with the telecommunications companies?
  I do not want more bureaucracy, especially in planning—I was once chairman of a planning committee, so I know what it can be like—but I think that in this instance we should have stricter control, with formal approval by each authority. I hope that when my hon. Friend winds up, he will say that the Government are concerned and will investigate the possibilities.
  Mr. Nigel Evans: We have some masts in the Ribble valley, and they are a blot on the landscape. The argument is that they are not in an area of outstanding natural beauty, but just on the fringes; but even the fringes are beautiful and there should be more sensitivity towards them. We also have masts in towns, and in one instance Vodafone totally ignored public opinion and erected a mast right next door to a housing estate; the public complained, a campaign ensued and eventually we won and the mast was taken down. Does my right hon. Friend agree that the companies have a responsibility not only to consult but to listen to the public?
  Sir Hector Monro: My hon. Friend had a debate on windfarms in the summer, to which I listened with great interest, because I feel about windfarms in Scotland much as he feels about windfarms in England; he is an expert on the subject and presents tremendous first-hand evidence that the Minister will no doubt take into account.
  Windfarms are far more intrusive than masts. For obvious reasons, they are often in remote parts and can be seen over a wide area; in my opinion, they are particularly unattractive. I appreciate our policy of sustainable development, which has been developed in the interests of both environment and energy, and our responsibility to Rio in terms of global warming, in the form of the Scottish renewable obligation and the non-fossil fuel obligation in England—we think up the most wonderful names for these agreements—and I do not doubt the arguments in favour of renewables, which must go hand in hand with continued reduction in fossil fuel emissions from our power stations. Perhaps the Minister will touch on the progress that we are making towards that end.
  We are making progress, but I want to highlight the balance between alternative fuels and their impact on the countryside. I am not saying that there should be a total
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  ban on windfarms, but I want stricter planning controls, greater transparency and greater attention to the views of the local people, as my hon. Friend the Member for Ribble Valley (Mr. Evans) said.
  Many alternatives are under consideration. From what happened earlier this year, wave power does not seem too promising. Solar power is useful only for individual homes, and the further north one goes in Scotland, the less sun there is and the less likely it is that it will have any practical impact on global warming. I have the highest regard for hydro power, which is most effective and can even be attractive, and we should encourage both large and small hydro schemes. We have talked before about barrages that drive generators as the tide goes in and out of great estuaries, such as the Solway barrage, which would be near my home, or the Morecambe barrage but, again, I am fairly convinced that they will not be constructed.
  The Government have shown great interest in wind power, but it is financially attractive only because of the substantial subsidy available under the obligations.
  Mr. Bill Walker: As my right hon. Friend knows, there are large hydro schemes in my constituency. Is he aware that I strongly favour increasing hydro capacity, and that those of us with experience of hydro schemes believe that they are the best way forward?
  Sir Hector Monro: Indeed, my hon. Friend is absolutely right. I saw a most effective and attractive scheme near Aberfeldy, which I am sure that he knows well, where the burn has been diverted through a pipe into a generator; from a few yards away, one would not even know that it was there, yet day by day it turns out sufficient megawatts to be valuable to the grid and it gives a good return to the landowner. We want to encourage hydro power wherever possible.
  Mr. Phil Gallie: My right hon. Friend probably recalls that I was the manager of a 100 MW hydro scheme, which ran for about 40 miles. When it was built in 1928–29, hundreds of thousands of tonnes of concrete were poured into one of the most beautiful parts of south-west Scotland. Does my right hon. Friend think that nowadays the environmental lobby would allow us to block glens and flood villages as happened in 1928–29? Would not the environmental disadvantage be difficult to overcome?
  Sir Hector Monro: I take my hon. Friend's point about large schemes. I must not get too involved in historical matters, but I well remember the development of the Galloway power scheme, in which my hon. Friend later had a significant part to play. It was turned on in 1930 and provided the first hydro power to the whole of Dumfries-shire. As a small boy, I remember turning on the first switch in my home; until then we had used oil lamps. As a wee laddie, I thought that it was something very special to turn on the first electricity at home. That part of Galloway has been enhanced and is now very attractive, with its steps and the lochs down to Kirkcudbright—well done to everyone involved. However, I agree that were we to start again now, heaven knows what the opposition would be to despoiling the countryside.

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  My difficulty is accepting the small output of windfarms when it is viewed against the serious loss of amenity in the countryside. I find it impossible to accept that windfarms do anything other than destroy the countryside. In addition, there are transmission lines to the grid system. I have no argument with windfarm operators—they have seen an opportunity and are taking it—but I simply want to ensure that any further development is more carefully thought through in the future.
  In the United Kingdom—I accept that the figures may be flexible—there were something like 13 wind turbines in 1991, whereas now there are 518, although the number is steadily increasing. Wind turbines are usually 100 ft high—or occasionally 200 ft high, which is as high as Nelson's column. Of course, the height of the blades must be added. I have seen windfarms in Wales, England, Scotland and Denmark and I am not surprised that the chairman of the Countryside Commission, charged with looking after the landscape in England, said:
  "England's scenic countryside is in danger of being turner! into a wind power wilderness".
  My hon. Friend the Under-Secretary of State, who is extremely active as the Minister responsible for industry in Scotland, will frequently have gone up and down the M74 and will know that in Lanarkshire, west of the M74, the hillside is covered with wind turbines. He must accept that they are especially unattractive and certainly do not enhance an area that needs all the help it can get to return to its former glory since having been a coal-mining area. I am sure that my hon. Friend will therefore appreciate what I am saying.
  On an average winter's day, the United Kingdom uses about 50,000 MW, yet the 40 or so windfarms produce about 64 MW a day, so the amount of electricity generated by windfarms is a minute part of what we use and out of all proportion with the despoliation of our countryside. The largest windfarm, in Wales, has 103 pylons and produces in a year what a conventional station produces in two days. At the moment, 0.1 per cent. of our electricity comes from windfarms. If the Government's target is 10 per cent., there will need to be an enormous increase in the number of turbines, perhaps to 20,000 or 30,000. However, I appreciate that technical advances may mean that more power can be produced from fewer turbines.
  I have never lived near a turbine station, but people who have and who therefore have first-hand knowledge of the problems complain not only of their unattractive appearance but of the noise of sound waves and of electromagnetic interference. Birds are also affected. We can work out the flight lines of migratory birds and perhaps avoid placing windfarms in certain locations. but pylons represent a death threat for birds. There are a great many windfarms in California and I understand that they have killed 78 eagles. I am not suggesting that the figures are similar in Scotland, but we must realise that windfarms can have a detrimental effect on the bird population. Indeed, I cannot understand why the Royal Society for the Protection of Birds does not object more strongly than it does.
  Surely the increase in the number of windfarms is due to the subsidy available under the renewable energy orders. Farmers see an opportunity for alternative land use—indeed, it is profitable for them to have a windfarm
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  on their property—but the country as a whole has to consider whether it is getting value for money from the subsidy, bearing in mind the environmental harm caused by such farms. I do not accept that there is an employment argument to be made in that respect—only very few people are required to run a windfarm.
  The most important aspect is planning—is the present system adequate? Do the guidelines give preferential treatment to would-be windfarm operators at inquiries? Are they fair to objectors, who often have greater local knowledge? In my constituency, only a few decisions have had to made about windfarms. One was approved at Carsphairn in Galloway, where the farm was welcomed by the authority and local residents—so be it. However, in my home town of Langholm, the situation was very different. The application was for a station to be built on a hill very near where I lived for the first 30 or so years of my life.
  The local authority and many residents—500 people signed a petition—objected as strongly as possible. They produced a very well-argued paper against the windfarm for the public inquiry. The application seemed to fail under several PPG 6 guidelines on renewable energy, yet the reporter, in what must be a subjective judgment—every reporter has to make a subjective judgment—approved the scheme. That, of course, was the Secretary of State's decision. Nothing further can be done about that. I shall not criticise the reporter; indeed, it would be improper to do so. However, I am suggesting that the system is weighted against objections because of the words "special need", which imply support for a windfarm.
  The reporter can disregard the normal view, which is against sporadic building in the countryside. The reporter can go through the six or seven points in PPG 6 and tick them yes or no. I disagreed with five in this instance, but the reporter agreed—such is life. The Minister should consider whether the guidelines are fair to both sections of the community, to the objectors as well as the applicant.
  The planning system should be tightened. Windfarms with 10 or more turbines have to have an environmental assessment and be reported to the Secretary of State. I would go further and suggest that all windfarms should have an environmental assessment, to be examined by the Scottish Office.
  On the credit side, Dumfries and Galloway has drawn up a windfarm strategy, and I commend the idea to all local authorities. It confirms which sites could be available and which could not. Maps have been prepared, showing where it would be possible to site windfarms without objection being expressed.
  My view is that more applications might be granted along the coast than would be acceptable. When one sails from Oban to Skye, what niggles is the number of caravan sites along the coastline. One sees acres and acres of white caravans all along the attractive coastline up the west coast of Scotland. If the caravans were green, it would be better, but they are white. I do not want to see serried ranks of windfarms along our coasts, just because that is where the wind happens to be strongest.
  Mr. Gallie: My right hon. Friend's comments on the coastline are important because, some time ago, there was great pressure for wave-generated power stations, which would virtually wipe out the whole of the west coast if

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  they were to provide any volume output. Has my right hon. Friend given any thought to wave-generated power and does he have any fears about it?
  Sir Hector Monro: I mentioned it earlier in my speech and I know that an experiment took place in Mull or Islay.
  Mrs. Ray Michie: Islay.
  Sir Hector Monro: Islay had a wave experiment, which may be continuing. My hon. Friend the Member for Ayr (Mr. Gallie) will remember the ship that was launched and taken up to somewhere near Dounreay this year. It was not a success, to say the least, and we must think carefully about the output that could be achieved from wave power. We must also think about the transmission lines from wherever the wave power centre is situated. I am in favour of any alternative that we can think of, as long as it is practical and does not despoil our countryside.
  I praise Dumfries and Galloway council for the efforts it has made to prepare the way for possible applications for windfarms, so that applicants can know which sites would be least obtrusive. I hope that none will be chosen, but at least the council has prepared the way and I give it credit for that.
  We must not forget our tourists. They come to see our unsurpassed scenery, not regiments of wind turbines stretched across the hillside. One interesting fact from the Dumfries and Galloway study is that if every site it suggests were taken up, only 123 MW would be produced. That would be a drop in the ocean, yet visually deplorable. I welcome the positive approach by Dumfries and Galloway and suggest that many councils should follow it in the future. Councils should have a restrictive policy and councillors must make their decisions carefully.
  In conclusion, I believe that we must rethink our renewable policy on windfarms. They make a small impact on global warming and we should bear it in mind that we are expecting an increased coal burn at Longannet, Cockenzie and Ferrybridge and more gas-fired stations. I am not sure that those stations are going the right way, but I do not think that windfarms will make a sufficient impact on global warming to justify the disadvantages that I have outlined in my remarks.
  I live near Chapelcross and I am delighted that nuclear power comes out with a clean bill of health. It is efficient, clean and reliable and we should bear it in mind in the future. I hope that our major nuclear power stations in Scotland run effectively for a long time and I am glad that Chapelcross has had another 10 years' extension.
  I ask my hon. Friend the Minister responsible for industry and local government to discuss with Energy Ministers whether we have our renewable policies right, given the changes in the years since the original policy was made. Yes, we must take global warming into account, but not to the extent of ruining the countryside by producing relatively little power from many windfarms. I ask my hon. Friend to think carefully about what I have said today and perhaps he can give me some encouraging thoughts..
  10.3 am
  Mrs. Ray Michie: I congratulate the right hon. Member for Dumfries (Sir H. Monro) on securing a debate on this important matter. It is generally known that the Liberal Democrats are in favour of the development of renewable sources of energy. Indeed, on the island of Islay in my constituency, as the right hon. Gentleman mentioned, wave energy has been researched and developed in conjunction with Queen's university, Belfast and it was the subject of an award two years ago.
  The hon. Member for Ayr (Mr. Gallie) mentioned the impact of hydro-electric power. Cruachan power station in my constituency is an excellent example of a station that has blended in well with the surrounding area and the environment. It is a wonderful place to visit.
  Mr. Gallie: I could not agree more with the hon. Lady's comments, but I remind her that a similar scheme was considered for Loch Lomond side and environmentalists argued that down. I am sure that that scheme would have fitted into the environment in much the same way as Cruachan.
  Mrs. Michie: That is a worthwhile point. Windfarms are a different matter and several applications for development have been made in my constituency of Argyll and Bute. Some are accepted and others fiercely opposed on the grounds of visual intrusion and possible noise pollution. Windfarms may not be erected in designated scenic areas, as the hon. Member—I cannot remember his constituency—said.
  Mr. Nigel Evans: Ribble Valley.
  Mrs. Michie: Thank you.
  Mr. Evans: We won.
  Mrs. Michie: We shall see what happens at the next election. On this occasion, I agree with the hon. Gentleman that in Scotland we try not to erect windfarms in areas of scenic beauty, but they are erected in areas that are very beautiful. We have areas of beauty everywhere in the highlands and islands.
  Planning applications are often opposed for several reasons and I have already mentioned two. They are also often opposed because, although the initial construction may generate jobs, in the end little employment is generated, as each windfarm needs perhaps only one person to look after it. Many people feel that windfarms are of no benefit to the local population and, although they might produce much-needed income for a hard-pressed farmer, they are deeply resented when erected on the estates of absentee landlords. If windfarms were erected to supply electricity to a local village at reduced cost, folk could see some point to them, but of course that is not the case.
  I ask the Minister to consider carefully the consequences when a planning decision is taken in favour of a windfarm in open defiance of local opinion. That has happened several times in Scotland. I therefore ask him to consider the proposal that responsibility for planning decisions on medium and small-sized stations should be passed to local communities and community councils with, of course, safeguards for the opinions of the local

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  authorities and a right of appeal. I also suggest that windfarms might be more acceptable, subject to the restrictions that I have already mentioned, if local communities could build their own turbines, using the electricity directly and linking into the grid to sell surplus power.
  The right hon. Member for Dumfries said that every application should be subject to an environmental impact assessment. Some of the good companies do that already. For example, Scottish Power has produced a good environmental impact assessment document, and that is something that all applicants should have to do. Like the right hon. Gentleman, I am not convince that we need so many windfarms when, especially in the highlands and islands, we benefit from hydro power. As I understand it, we have an over-capacity for electricity in Scotland anyway.
  Mr. Nigel Evans: The problem is that, given the massive explosion in the number of applications, windfarms will inevitably be sited in scenic areas of the United Kingdom. If we were to put only a small proportion of the money used to encourage wind power into energy conservation, the amount of energy saved could be greater than the output of all the wind turbines throughout the UK.
  Mrs. Michie: That is a valid point. As the right hon. Member for Dumfries said, we should question whether we are getting value for money by allowing the spread of windfarms.
  Telecommunications masts raise further fears about the consequences of planning decisions, especially for beautiful parts of Scotland, which depend to a certain extent on the tourist industry. Visitors go to those areas to enjoy the vistas over mountain, sea and loch. It is feared they will look like pincushions, with telecommunications masks and windfarm turbines sticking up all over the place.
  I am acutely aware that we in the highlands and islands cannot live in a time warp. We must move with the times, and not get stuck, immobilised, in the past. I am determined that my area should not become a theme park dotted with interpretative centres, museums and craft shops for the benefit of visitors and those who want the highlands to be left as a wilderness.
  I welcome the £46 million initiative by Highlands and Islands Enterprise to provide state-of-the-art mobile telephone coverage across the area. We need that coverage if we are to keep up, and if our businesses are to develop and flourish. National surveys have shown that mobile telephony enhances business efficiency by as much as 20 per cent. That could be worth upwards of £25 million a year to firms in the highlands and islands, and could mean the creation of a further 200 new jobs a year.
  Unfortunately, however, there always seems to be a down side to new technology. That initiative will require the installation of transmission equipment at 250 locations, from Shetland to Argyll, and from the Western Isles to Moray. I make a plea to the Minister that he ensures that good planning regulations are put in place. England and Wales have a code of practice, although I do not know whether it is adhered to. The right hon. Member for Dumfries referred to masts that are more than
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  15 m high; although he talked in feet. Companies often erect 15 m masts and then obtain permission to heighten them by 5 m. As the mast is already there, they are told, "You might as well go ahead."
  The highlands and islands are different—I hope—in that Cellnet and Vodafone have agreed with the Scottish Office to erect shared masts throughout the area. That is welcome, although other telecommunications companies, such as Orange, could erect rival masts. The case for shared masts is important, but we must consider their visual effect, and the impact that they will have on sites of special scientific interest. I do not know whether they can be camouflaged it is not possible to grow trees on the top of a ridge or a mountain to camouflage a mast. There should be full consultation on every mast that is erected.
  A national computer-generated network examines those matters, but it does not consider how coverage can best be achieved with the least possible impact on the landscape. We could be in the ridiculous position of requiring several masts to cover one glen or one area. Masts should be tried and tested first, and data should be collected from areas beyond that covered by the mast. Masts that are 15 m or higher require the construction of a track leading to the mast, which also has a visual impact.
  I am sure that the Minister will give serious consideration to those points. I hope that he accepts that planning consents and the impact of masts and windfarms raise real fears, and that he will consider ways of overcoming those fears.
  10.15 am
  Mr. Bill Walker: I congratulate my right hon. Friend the Member for Dumfries (Sir H. Monro) on obtaining this debate, and on his well-argued, well-balanced case. Few people would disagree with him.
  In the early 1980s, and even before that, the groundswell of opinion that something had to be done about the problems caused by the use of fossil fuels resulted in various initiatives. Although those initiatives were welcome, it is another matter to find viable solutions that are acceptable to the vast majority.
  Large parts of my constituency are remote and rural, or even wild. People who live in such areas do not necessarily object to masts. Some are welcome, such as those erected by the BBC and other broadcasting companies that allow people to receive television and radio signals. However, they are not so welcome when, as the hon. Member for Argyll and Bute (Mrs. Michie) said, the benefits to the local community are not so clear and obvious.
  Scotland depends on exports to survive. That is especially true for rural areas. It is difficult to imagine how we would survive without exporting whisky. I do not agree with those who argue that nothing needs to be done as we do not use much electricity and we produce a surplus. We must deal with the problem, because the export of electricity is an important part of Scotland's contribution to our well-being, and we all benefit from it. The trouble is that local people do not always see the obvious benefits.
  My right hon. Friend was right to draw attention to the advantages of hydro power, the development of which we should encourage. There is still considerable scope in

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  Scotland—including in my constituency—for further hydro schemes of all sizes; small and large. Some of the rivers that run into the Tay are not dammed by hydro-electric companies. Those rivers are often the source of the flood problems in the Tay valley. I would welcome some constructive thinking about hydro schemes to deal with that problem. One of the advantages of such schemes is that the water is controlled to some degree, and they could be part of a flood prevention scheme, such as I am keen to have for the whole of the Tay. A hydro scheme could solve the difficulties with the River Garry, which runs uninterrupted into the Tay, causing no end of problems further down.
  My right hon. Friend rightly pointed out that we need to have another look at the way in which planning operates. His local council should be congratulated on having guidelines and policy; not all councils do, and, as he will know, when planning applications are made, all hell is often let loose. No one ever wants such structures in their back yard. Councils should have guidelines suggesting what may and may not be acceptable locally.
  My right hon. Friend was also right in saying that nuclear power was reliable and safe, and did not damage the environment in any way. We in Scotland are fortunate in having nuclear power, and I wish that more had been done to promote the image of nuclear generation.
  I can think of no part of my constituency in which anyone would welcome a windfarm. Anyone considering establishing a windfarm of any kind should bear it in mind that they will encounter considerable local hostility. Unless the issue can be dealt with sensitively and with some understanding of local circumstances, we shall have problems. Large parts of my constituency are deemed environmentally sensitive areas, and must be treated as such; however, vast parts of it are not deemed environmentally sensitive, although I consider them some of the most beautiful areas in Scotland.
  Mr. Gallie: My hon. Friend probably heard the hon. Member for Argyll and Bute (Mrs. Michie) say that no planning consent should be given when it is in open defiance of local opinion. Given what he has said about his constituency, does my hon. Friend agree that that would more or less wipe out any chance of windfarms being developed in Scotland?
  Mr. Walker: As my hon. Friend suggests, there is no simplistic solution. As my right hon. Friend the Member for Dumfries demonstrated, what we need is fresh thinking, along with careful attention to detail and new guidelines from the Scottish Office.
  I personally think that windfarms may not be viable, because they do not generate much electricity and their environmental impact may well count against them. That does not mean, however, that we should condemn the idea out of hand; as my right hon. Friend suggested, it should be considered objectively and sensibly.
  As for telecommunications masts, some rationalisation is needed. Planning and control must be encouraged. If six different companies are trying to provide a service, six separate masts will not be needed. As we know from military and other equipment, masts can carry more than one type of equipment to send and receive signals. We
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  should think in terms of strategically placed masts that will cater for a variety of needs. That would be better than allowing groups or individuals to put up their own masts and compete with each other. Again, we need ideas and guidelines from councils.
  I hope that my hon. Friend the Minister will accept the view of Conservative Members that renewable energy needs to be considered. We welcome the measures that have been taken so far, but we feel that the time has come to review some practices and policies. There is strong evidence that some councils have been hostile to what I consider the best projects—hydro schemes. We should give more thought to the way in which we use Scotland's natural environment, much of which consists of water that runs out to the sea.
  10.25 am
  Mr. William Ross: I hesitate to trespass on what is basically a Scottish debate, but the issues that have been raised apply throughout the United Kingdom. Let me therefore take a few minutes of the House's time to ask the Minister some questions.
  I am deeply grateful to the right hon. Member for Dumfries (Sir H. Monro) for raising a matter in which many of us from other parts of the United Kingdom take an interest. I own a small hydro-electric plant, which provided all my electricity until some years after I first came to the House. For various reasons, it became unwise for me to continue running the plant, but I hope to do so again in the future.
  As the hon. Member for North Tayside (Mr. Walker) pointed out, hydro is a good way of producing electricity, but it is not without its costs. The hon. Gentleman will be well aware of the difficulties that we have experienced throughout the country in regard to migratory fish. The River Awe scheme, for instance, has wiped out a certain genetic race of salmon. Although I consider hydro to be the best way of producing electricity, I think that we should exercise much more caution than has been exercised in the past.
  Mr. Roy Beggs: Cannot the current technology, costly though it is, protect fish where hydro schemes are in operation?
  Mr. Ross: I want to return to that point. In the end, it is the cost that counts — the economics of production of non-fossil fuel by whatever means.
  Ultimately, all those matters are covered not by United Kingdom planning law but by EC directives. I am not convinced that all those directives have been applied throughout the United Kingdom, and I am certainly not very happy about the way in which they have been applied in Northern Ireland. In our experience — I hope that this is not the case in Scotland — applications for planning permission lack precision in regard to the height and size of generators, which sometimes change between the initial application and the building of masts. That causes enormous difficulties.
  A universal problem is the making of the environmental assessment by the applicant. I have always felt that such assessments should be made by planning authorities or Government rather than by individuals, who will sometimes be trying to make a silk purse out of a sow's ear. People throughout the country are unhappy about the present position.

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  Another problem in various parts of the country is that machine blades can reflect and interfere with television reception. There is also the safety aspect; machines keep shedding blades all over the world, and the only way of avoiding damage is to site the machines in remote but prominent areas. I hope that that will be taken into account in Scotland.
  The aspect of wind power and the like that really concerns me, however, is the cost of production. What makes hydro schemes so attractive is that the fuel costs nothing. I believe that the old method of costing was to set up a 2.5 per cent. sinking fund. As my hon. Friend the Member for East Antrim (Mr. Beggs) pointed out, there are now ways of protecting fish, albeit costly.
  I believe that it is now claimed that coal can produce electricity at a cost of about 3p per unit. The cost of non-fossil fuels, especially wind power, is a great deal higher at 8p or 9p.
  Wind production of electricity depends upon wind speed, so it is intermittent. The machines operate within only a relatively narrow range of wind speeds. For example, in my part of Northern Ireland on Monday there was a raging gale in the morning, by lunchtime the weather was calm, but by 7 pm there was another raging gale. I understand that the grid has some difficulty dealing with such changes in production, as it switches on and off.
  The contracts in Northern Ireland—I should be grateful if the Minister would enlighten us on the position in Scotland—stipulate that non-fossil fuel electricity has to be paid for regardless of whether or not it is used. How much of the production is actually used?
  The Minister will be pleased to hear that the Under-Secretary of State for Northern Ireland in the other place and the producers intend to ensure that in Northern Ireland, from next April, people will be able to buy non-fossil fuel production to boil a kettle—but they will have to pay extra for it. They will have to pay the going rate. I cannot understand why anyone would want to pay extra for electricity, but the Minister's noble Friend told me in a letter that people would be willing to do so. Will that policy apply also in Scotland and elsewhere?
  Like most people, initially I was starry-eyed about the prospect of cheap power. However, the more I have thought about it, the more convinced I have become that the Government did not think through all the consequences on entering into obligations before putting their name to a piece of paper that ties us in the way it does.
  10.31 am
  Mr. Phil Gallie: I shall be brief, to allow sufficient time for the replies. The hon. Member for East Londonderry (Mr. Ross) was right to emphasise that we are debating a United Kingdom issue. Indeed, Scottish Power is currently considering providing small, low-input windfarms in Northern Ireland. It is also considering providing an interconnector between Scotland and Northern Ireland. That has created problems relating to the requirement for transmission line runs in Scotland. A factor that we must take on board when considering windfarms is that people do not like transmission lines. If windfarms are scattered around the country, overhead transmission lines will be required. They are not popular and are environmentally disadvantageous.
  576
  Hon. Members have referred to telecommunications. One of the great benefits of privatisation is that companies have been allowed to operate in both the generation and telecommunications sectors. That has resulted in towers carrying both facilities—an environmentally welcome development. My hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) referred to the problems with overhead transmission and distribution lines. In fact, urban areas are lucky because most cables in our cities are buried under roads and pavements. However, there is an environmental consequence as those roads and pavements need to be dug up, which causes aggravation. Any thought of a major national grid buried beneath the ground is unrealistic because the cost would wipe the country out of the commercial market. There are also environmental arguments against burying cables across the country.
  I am only too well aware of the problems, especially heat, caused by windfarms. Back in 1980, when I was a district councillor, one of the first planning matters I dealt with in my ward was the application by the South of Scotland Electricity Board to build a windfarm—one wind generator—in the village of Fairlie, right next to the nuclear power station at Hunterston. The message from the community council was loud and clear, "We don't mind Hunterston C, but we don't want a noisy contraption in our village." That says a great deal about windfarms.
  I went to Wales recently and saw what was at that time the largest windfarm in Europe. It is part-owned by Scottish Power. It has 104 wind generators, but generates only a measly 30 MW. Those people who, in the past, have argued for windfarms as being environmentally friendly are now the very people who are objecting to further farms because of the problems, especially noise, that they create.
  Of course, matters have moved on and Scotland is to have 0.6 MW generators rather than the current 0.3 MW generators. The new generators are much quieter and more acceptable, but they are still a visual blot on the landscape. I sympathise with the view of the hon. Member for Argyll and Bute (Mrs. Michie) that local opinion must be taken into account. However, it cuts across the idea of environmentally friendly, renewable sources—something that meets the aspirations of every environmentalist.
  I strongly support the view of my hon. Friend the Member for North Tayside (Mr. Walker) on nuclear generation—compact sites and large-volume output. Indeed, a 2,000 MW site is quite feasible in a small area. Only one main transmission run is required and the emissions from nuclear power stations are virtually zero. There are no real problems.
  Let us consider the transmission problems in Scotland arising from the installation of power sites. Currently, we transmit some 1,800 MW of power across our border to the south. There are plans to increase that to 2,200 MW. I appeal to my hon. Friend the Minister to speak to his colleagues south of the border, to try to get early planning authority in North Yorkshire to upgrade the national grid crossover to 2,200 MW. After all, Scottish generation is environmentally friendly generation. It uses fossil fuel based on low-sulphur coal. That is environmentally friendly. Scotland can produce what is required without contaminating our atmosphere to the extent that happens with generation south of the border.

  577
  That brings me back to the comments made by the hon. Member for East Londonderry about the United Kingdom aspect. We are indeed talking about the United Kingdom and we should try to take advantage of systems across the country. I could say a great deal more, but I recognise that I must leave time for the replies.
  10.37 am
  Mr. John McFall: I shall be brief to allow the Minister time to reply.
  I congratulate the right hon. Member for Dumfries (Sir H. Monro), who has been absolutely loyal to the Monro doctrine—that the environment counts very much. I know that he has taken part in every environmental debate in this House, certainly since I have been here. On issues such as national parks, his voice and his wisdom have been very welcome. I agree with the points that he made in opening the debate.
  The issue is to embrace technological change without scarring our environment. I agree with the right hon. Gentleman that currently there is a laissez-faire attitude to the erection of masts and pylons. I am sure that we could get together and co-operate in looking at these matters.
  I accept that we all want to supply cheap, non-polluting and infinitely renewable energy and I agree that some areas in Scotland are ideal for windfarms. However, people in Cornwall, Cumbria, mid-Wales, Yorkshire and Scotland are divided between support for cleaner power and opposition to what they see as a desecration of their landscape.
  The right hon. Gentleman referred to power generation. Currently, barely 1.5 per cent. of our power needs are met by renewable energy, compared with 25 or 26 per cent. —almost 50 per cent. in Scotland—met by nuclear energy. The remainder comes from traditional fossil fuels, mainly coal and gas. Wind power must be seen in that context.
  There is an argument used by the advocates of wind power that local people come to accept turbines. A recent study by Exeter university found that in Cornwall opposition to an early windfarm at Delabole declined after several years. Even so, environment and conservation groups admit that the windfarm issue has divided their supporters. The debate is fractious and we have to accept that it always will be.
  The key, as the right hon. Member for Dumfries said, is that wind energy generation should not be unsightly, either when functioning or after the end of the life of a windfarm. Efforts have been made to that end in Scotland, but, in December 1994, 30 projects were awarded contracts under the first order made within the Scottish renewables obligation, commonly referred to as SRO-1.
  To identify planning and environmental issues associated with the development of windfarms and other alternative energy sources, an assessment of potential renewable energy resources in Scotland was published in December 1993. The assessment was carried out by Scottish Hydro-Electric, Scottish Power, the Department of Trade and Industry, the Scottish Office, Scottish Enterprise and Highlands and Islands Enterprise, with support from the Convention of Scottish Local Authorities.They put the issue of renewable energy in the context of the planning system, but I shall not read out
  578
  the relevant chapters of their report. The report contains good guidelines, but there is a softness about them. At the end of the day, we need more firmness, especially in the planning system. The right hon. Member for Dumfries asked whether the system was being fair to objectors; I do not think that it is, but I will cover that point when talking about telecommunications masts.
  In respect of telecommunications masts, planning controls in Scotland are similar, but not identical, to those in England and Wales. Scottish Office guidance to local authorities on planning and telecommunications has been set out in the Scottish Office Development Department's circular 25/85. Under the Town and Country Planning (General Permitted Development) (Scotland) Order 1992, telecommunications companies have similar powers for the installation of apparatus as they have in England and Wales. The same height restriction of 15 m applies for masts to fall within permitted development and normally express planning permission must be sought for masts higher than that. However, the prior approval procedure for permitted development rights for masts less than 15 m does not apply in Scotland. I hope that the Minister will turn his attention to that point.
  On any mast, microwave antennas may not exceed 1.3 m in any dimension and no more than 10 antennas are allowed on any mast. The order defines microwave as
  "that part of the radio spectrum above 1,000 MHz".
  That would seem to create an anomaly in respect of mobile telephone masts, because Cellnet and Vodafone networks operate at frequencies below 1,000 MHz, whereas Orange and One 2 One operate at frequencies above 1,000 MHz. In other words, it would appear that Cellnet and Vodafone masts would not be described as
  "microwave antennas and their supporting structures"
  under the order, whereas Orange and One 2 One's would. If Vodafone's and Cellnet's masts were not defined as microwave antennas, there would apparently be no restrictions on their use within conservation and national scenic areas. The Minister should look at that issue, because there would be great concern if masts were to be erected in such areas.
  I asked the House of Commons Library to research the issue. The Scottish Office told the Library that it was unaware of any difference in the planning controls on different operators and that it was unaware of the issue ever having been raised. If this is the first time that it has been raised, I should be grateful if the Minister would give it his attention, but I do not expect an immediate response.
  On the more general issue of planning control and mast development, I am aware that the four network operators met officials of the Scottish Office about three weeks ago. The Association for the Protection of Rural Scotland has expressed its concern. Scotland's four main mobile telephone operators want to install hundreds more transmitters before 2000, many in some of Scotland's most scenic areas. The APRS says that, every week, two or three new radio masts are erected by operators using "permitted development rights" that allow them to build structures up to 15 m in height without needing planning permission.
  I shall give the Minister an example. According to the APRS, an installation erected by Orange on Bonartie hill, near Loch Leven in Kinross-shire, "glows and shimmers"

  579
  when the light catches its steel framework, totally dominating the surrounding landscape. That issue falls within the guidelines, but it is causing great concern among local people.
  Scotland already has between 400 and 500 sites, but the operators want almost to double that number so as to extend their coverage throughout rural areas that have not previously been reached. The spur for that is their desire to exploit the Scottish mobile telephone market—we have no objection to that, but we must remember that Scotland has lagged behind the rest of the United Kingdom—helped by the licence requirement that demands 95 per cent. coverage of the UK. According to a Cellnet spokesman, that will mean that
  "By 2000 some 12 million people will have mobiles, double the existing number, and Scotland is one of our big target areas."
  In short, an existing problem will become worse in future and all of us have a duty to turn our attention to it.
  The highlands and islands concept with Vodafone and Cellnet has already been mentioned. I do not object to the project because it is a positive development, but the right hon. Member for Dumfries and others will be concerned about the A9 corridor and how development will proceed there, especially because it is an area of scenic beauty that attracts tourists. We do not want our landscape to be scarred, so we have a joint interest in the issue, as this debate has illustrated.
  The Orange representative, Richard Rumbelow, said that the company already had 180 sites in Scotland, mainly in the central belt, but was looking to add another 100 by 1998. Strutt and Parker, the land agent, has arranged 22 leases this year-double last year's tally-and is working on a further 20 sites in Scotland. The company says that smaller structures command rents of about £3,000 a year, with masts above 15 m earning £4,000 a year, so farmers and others have a commercial interest in the matter. Nevertheless, such development must be controlled.
  The possibility of sharing masts is important. I hope that that will be done in the highlands and islands project. Highlands and islands spokespersons have said that, on technological grounds, sharing is not possible in many cases, but I hope that efforts will be made to encourage the practice.
  The key issue is the scope given to operators by permitted development rights. The fact is that, if a company wants to build a mast on the summit of Ben Nevis, planning authorities can complain, but have few powers to do anything about it provided that the mast is less than 15 m high. Planners' only sanction is an article 4 order, under which they can forbid development in specified areas. However, according to a highlands and islands planner, Bill Hepburn, who is currently compiling guidelines for councillors:
  "that legislation is extremely difficult to enact".
  He adds:
  "I suspect that planning authorities will not actually be able to make it stick.">
  It is therefore important that, in discussions with mobile telephone operators and rural and other interests, a framework is developed to cover that issue.
  I want to give the Minister one last example. When Aberdeenshire council prevented Vodafone from hiding a large mast inside the Tower of Johnston on the Garvock
  580
  hill overlooking the Mearns in Kincardineshire—I think that that is in the Minister's constituency—and secured protection for the monument, Vodafone simply went ahead and built a much more obvious 12 m mast only 150 yd away. The intentions of the local authority were thwarted in that case as they have been in others.
  I agree that we have to reconcile environmental protection with technological innovation and I congratulate the right hon. Member for Dumfries on raising this subject today so that the issues can be examined. Fruitful discussions should proceed so that we can come to a joint agreement for the future.
  10.48 am
  The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch): I, too, would like to congratulate my right hon. Friend the Member for Dumfries (Sir H. Monro) on securing this important debate, which has given hon. Members a good opportunity to have a sensible discussion about an issue of great importance. I should also like to echo the recognition given to the significant work that my right hon. Friend did for many years when he was Minister responsible for the environment at the Scottish Office, when he ensured that planning guidelines were drawn up tightly to ensure a sensible balance between development and protection of the environment. I hope that I can try to convince my right hon. Friend and others that we can achieve that balance within those guidelines and our robust planning procedures and controls.
  My right hon. Friend referred to the impact on the environment of wind turbines and telecommunications towers. I know that my right hon. Friend will understand, and I trust that other hon. Members will also understand, that it would not be appropriate for me to comment on any specific cases that are currently before the Secretary of State because that could be prejudicial to any future consideration of those proposals.
  The Government have put in place a robust and comprehensive planning policy framework to secure sound planning decisions on renewable energy development proposals. That framework consists of a clear policy of careful siting of all renewable energy developments, appropriately strengthened in the case of wind-generated types. The extension of the legislation on environmental assessment has ensured the systematic evaluation of relevant proposals. To ensure a consistent and effective application of the policy at local level, the notification procedures have been reinforced to cover all wind power developments that the planning authority is minded to approve.
  Firm foundations are set in national planning policy guideline 6 which was published in August 1994 following wide-ranging consultation with environmental, industry and community groups. NPPG 6 focuses on those renewable energy technologies that are likely to attract support under the Scottish renewables obligation, to which the hon. Member for Dumbarton (Mr. McFall) referred, and on projects connecting with the electricity distribution system. I should like to add that the principles of those guidelines and the environmental regulations should be applied to smaller projects for on-site use.
  Much of the framework applies to all forms of renewable energy-related development, but significant policy has also been set down on wind-generated energy.

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  Our policy requires all proposals for renewable energy-related developments to be given careful consideration, to ensure that the localised environmental impacts are acceptable before consent can be given. We consider that to be essential in the interests of Scotland's natural heritage. It is also part of our commitment to sustainable development.
  It almost goes without saying that those areas protected by international and national designations are scrupulously cared for within the policy framework in NPPG 6. I know that my right hon. Friend is only too well aware of that. We recognise, however, that outwith those international and nationally safeguarded areas, planning authorities may wish to identify, with appropriate justification in their development plans, other environmentally significant areas. Of course, the degree of outright protection that such areas will require will not normally be as high as that given to national or international designations, but potential developments in such areas still require careful consideration. I would therefore encourage hon. Members and those concerned about particularly important or sensitive areas within their locality to take advantage of the opportunities offered by the planning process to raise them with their planning authorities. The means exist at local level to highlight the special features that could be at risk if inappropriate development was permitted.
  My right hon. Friend referred to the work done by Dumfries and Galloway council, which I welcome. Reference was made to the Government's guidelines on such work and, indeed, paragraph 66 of NPPG 6 contains the guideline that structure plans should include policies that express the regional council's strategy for renewable energy developments.
  I acknowledge the reservations expressed by my right hon. Friend and other hon. Members about environmental assessment. I know that, for some time, he has been a firm advocate of tightening the controls on such assessments. My right hon. Friend called for the lowering of the indicative criteria threshold for formal environmental assessment set out in the Scottish Office Agriculture, Environment and Fisheries Department's circular, 26/1994, from 10 wind generators to zero. I am not sure whether one could contemplate going that far, but I am happy to undertake to consider seriously my right hon. Friend's argument. I would like to discuss it further with colleagues at the Scottish Office Agriculture, Environment and Fisheries Department and other Departments.
  On notification direction, hon. Members will be aware that the Scottish planning system operates under the general principle that decisions should be taken at the most local administrative level unless there are strong reasons for taking them at a higher one. While the Secretary of State maintains that approach to renewable energy-related development because of the possible visual impact of windfarms on the Scottish landscape, he requires to be notified by the planning authority of any application where it is minded to approve a proposal for one or more wind generators. That provides him with the opportunity to consider if the individual case raises issues of national significance and to decide to call it in for his own determination. That practice will continue to ensure that the Secretary of State is able to monitor carefully all
  582
  proposals for wind turbines and in particular their potential environmental impact. I understand the issues raised by my right hon. Friend the Member for Dumfries, but I hope that he can rest assured that his comments will be carefully considered and taken into account in the future.
  I share the concerns expressed by my right hon. Friend and others about the potential environmental harm that can be caused as a result of a spread of telecommunications networks. I represent a predominantly rural constituency, so I am well aware of the sensitivities involved. I am determined to ensure that the environmental impact of such developments is minimised. As with wind generator projects, however, it is important to take a balanced view.
  It might be helpful if I described the regulatory background relating to the erection of telecommunications towers. The telecommunications code system operators are licensed by the Department of Trade and Industry under the Telecommunications Act 1984. Their licences set target dates by which the operator must be able to provide services to a certain percentage of the United Kingdom population, and the operators are given powers to help them do that. They have the right to install apparatus on land with the occupier's agreement, as well as compulsory purchase powers and the power to carry out work and install apparatus in streets. But obligations are placed on operators. They are required, for example, to remove redundant apparatus and they must follow prescribed procedures in removing apparatus to allow public utilities to carry out street works.
  Those licences also contain important conditions designed to protect the amenity. For example, before installing any apparatus above ground, operators must notify the planning authority and allow time for it to raise objections before installing the apparatus. That notification must include details of any other proposed apparatus in the authority's area to allow the authority to take an overview of the proposals. It has 28 days in which to raise concerns and to request changes to appearance, landscape and siting. The operator is expected to attempt to respond positively.
  Tighter rules also apply in relation to designated areas such as sites of special scientific interest or of natural heritage. There are also strict rules on the way operators design their networks and implement them. For example, they are required to keep the number of items of apparatus to the minimum practicable, allowing for estimated growth in demand. They are also obliged to protect the visual amenity of properties in proximity to their apparatus as far as practicable.
  Much has been said about the general permitted development order, which allows operators to erect free-standing masts up to 15 m in height without the need to seek planning consent. I stress that they still have to notify the local authority. I am particularly concerned from experience in my constituency and elsewhere that many of those structures are crude, and although they may be less than 15 m high, they can still constitute significant structures on the landscape. I am looking to the industry to meet its environmental obligations under the terms of its licences. I do not wish to hinder developments that are generally beneficial, but it is important to reach environmentally acceptable solutions. I am therefore considering whether the permitted development right provisions might be tightened to provide better control in

  583
  relation to substantial structures of less than 15 m in height. In addition, we have embarked on reviewing the operation of the safeguards that I have mentioned.
  Earlier this month I instigated a meeting between officials and representatives of the leading telecommunications code system operators. I am sure that that meeting will be the first of a few. I intend that there shall be discussions with the industry to try to ensure a balance between allowing the significant technological development and communications improvements that were mentioned by the hon. Member for Argyll and Bute (Mrs. Michie) and the interests of rural communities, the impact on the environment and the other aspects that have been raised by my right hon. Friend the Member for Dumfries and by other hon. Members.
  In this useful debate, an important subject has been covered. I apologise to hon. Members for not having the time to reply to every issue, but I hope that I have given some reassurance.

  Human Fertilisation and Embryology Authority
  11 am
  Mr. Joseph Ashton: I thank the House and Madam Speaker for giving me the opportunity to raise this complex matter, which is of great concern to everybody in health and especially to my constituent, Mrs. Diane Blood of Worksop.
  Mrs. Blood and her husband Stephen were married in May 1991, having been courting for nine years. It was a long-standing stable relationship. Mrs. Blood worked in advertising and public relations and went on to set up her own company under the Government's enterprise scheme, doing public relations work for nursery products. That job involved advertising and matters relating to children, so she has much experience of children and babies.
  Mrs. Blood's job was a struggle at first and she dealt with publications such as Baby Magazine; First Steps; Mother and Baby; Parents; Pregnancy and Birth; Practical Parenting; Our Baby; Right Start; Twins, Triplets and More Magazine; Under Fire Contact; You and Your Baby; New Generation; Offspring; Maternity and Mothercrafi; Nursery Choice —The Complete Lifestyle Magazine for You, Your Baby and Child and others.
  I have read out that list to show that Mrs. Blood was experienced in terms of babies, in knowing what to expect after a birth. She and her husband very much wanted children and they spent much time discussing a possible pregnancy. They had the good fortune to share similar religious beliefs and believed that one of the central purposes of marriage and of human existence is to found a family. They regarded the miracle of modern reproductive medicine in aiding procreation to be of great benefit to society at large. They also believed that the personal choice of parents must be respected and that, except where necessary, the state should not interfere with personal choice in such private and family matters.
  Mr. and Mrs. Blood married in the Anglican Church using the traditional service from the 1662 "Book of Common Prayer" because that service places greater emphasis on procreation than the modern alternative service book which is now used. They regarded themselves and their bodies as joined together in holy matrimony and that is why this is a serious debate. It is about a possible mother being prevented by the state from having her husband's child. They were in favour of birth control, although her husband was against abortion. They both thought that artificial insemination was a wonderful way to help unfortunate people to have children.
  Mr. and Mrs. Blood discussed at great length how they would be prepared to have a child if they discovered that they had problems in conceiving. They agreed that they would go to any artificial lengths if Mrs. Blood was unable to conceive from her husband's sperm. They saw no objection to the posthumous use of Mr. Blood's sperm, provided that the interests of the child and the other children of the family were properly protected. The arguments in favour of such use struck them as particularly compelling, especially in the case of a married couple since their reproductive material, sperm and embryo, would create a child who would be confident of his or her genetic inheritance from natural, biological parents. They saw no objection to taking sperm from a permanently unconscious or brain-dead husband for his wife's procreative use.

  585
  Mr. Blood wished to donate his organs for the benefit of others and there is no doubt that he would have wished that sperm could be taken from him and used by his wife in the tragic circumstance of an untimely death. That would enable his wife to have the child that they had always wanted and it is the main reason for Mrs. Blood wanting her application to succeed: she wanted to respect her husband's wishes as well as her own. They discussed the issue many times, especially because of conversations that resulted from newspaper articles and the magazines that I have mentioned. Such conversations arose because of Mrs. Blood's profession.
  The couple talked specifically about newspaper items, about widows who wanted to use the sperm of their late husbands to have a baby, and they both thought that widows were right in wanting to have babies in that way. They did not think that a woman should be compelled to start again by remarrying or have to use somebody else's sperm, nor did they think that her desire to have a child should be confused with thoughts of the reincarnation of her husband.
  Mrs. Blood remembers saying that she would not want to remarry if anything happened to Stephen and that she would want his baby. He stated categorically that that was his position. She remembers that, when she went to the hospital. the conversations came back to her when her husband was ill and unconscious. They were undoubtedly strong factors in persuading her to ask the doctors to take sperm from her husband for artificial insemination.
  In 1995, Mrs. Blood's career was stable and she and her husband were ready to have a child. From that time they began trying to conceive. They installed new furniture in the spare bedroom to make more storage space and chose the name for a possible baby. Then Stephen fell ill. However, up to that time the topic of having a family was a constant source of conversation. There were some signs that they would be successful and that their desire would be fulfilled because they thought that Mrs. Blood was pregnant.
  On 26 February Mr. Blood complained of feeling unwell. Four days later he was dead. At first it was thought that he had influenza, but he was rushed to hospital because it turned out that he had meningitis. While he was in hospital two samples of sperm were taken, and Mrs. Blood wishes to have an artificially assisted pregnancy using that sperm either in the United Kingdom or abroad. Tests have shown that she would have no problems relating to that.
  On the evening of Sunday 26 February, Stephen started vomiting and at about 10 o'clock Mrs. Blood rang the duty doctor. He arrived at 11 o'clock and after conducting an examination said that there was a slim chance of meningitis and that Mr. Blood should be admitted to hospital. The ambulance arrived at 11.15 and doctors began treating Stephen with drugs for meningitis. On Monday 27 February the doctors decided to move him from Worksop to a hospital in Sheffield and Mrs. Blood accompanied him in the ambulance.
  On Tuesday the doctors finally succeeded in performing a lumbar puncture, which had been attempted several times since Stephen's admission to hospital. At about 6 o'clock the cardiac arrest team was summoned and the doctor told Mrs. Blood that although they had
  586
  kept her husband's heart beating, they were unable to sustain his breathing without a machine, and that his condition was not at all good. Mrs. Blood mentioned that they had been trying for a family and that there was a chance that she was pregnant. They asked whether she had been given any tablets to protect her from meningitis and put her on a course of tablets. They knew then that there was a chance that she was pregnant.
  Stephen Blood was moved to intensive care on the top floor of the hospital and at that stage Mrs. Blood asked the doctor to find out whether it would be possible to take a sperm sample from her husband for later use because his condition made her fear the worst. She knows now that, even had Stephen recovered, sperm retrieval would still have been sensible because his illness may have rendered him sterile. That would have given them a chance to have a child, even if her husband recovered. The idea of preserving the sperm came to her because of their discussions and because they were trying for a baby, after all the time of waiting. When Mrs. Blood mentioned taking the sperm sample, the doctor did not seem to know immediately whether it was possible.
  On the morning of Wednesday 1 March, Dr. Edbrook told her that things had got worse in the night. Hospital staff had tried to get her husband to breathe on his own by withdrawing sedation, but he was unable to do so. At that stage, Dr. Edbrook informed Mrs. Blood that, as for the sperm sample, it was an unusual request, but that the hospital happened to have the foremost expert in the field, a registrar, Mr. Tophill, who was prepared to take a sample. Mrs. Blood asked if the sperm might be infected by Stephen's illness and the expert said that it would not be.
  Mrs. Blood discussed the matter with her parents and Stephen's parents. All four agreed that the sample should be taken if possible. Mrs. Blood received counselling in relation to the taking of the sample. She was also warned that there may be some problem in relation to inheritance rights and that the sample might not be successful, but she was prepared to take that chance.
  Mrs. Blood went into the room where her husband Stephen was lying unconscious and sat with him. The woman doctor in the room told her more about the possible use of the sperm after Stephen had died. This bit is important. She told her that it would be taken to Jessop hospital first, a maternity hospital in Sheffield, but that Mrs. Blood did not need to use it there. It could be moved to wherever she wished later. The doctor mentioned the need to sign
  "an organ, or in this case semen, donor form".
  Mrs. Blood was happy to do so, but no form was ever produced for her to sign, despite her repeatedly asking whether the form had arrived. Later the same doctor said that, because of legal reasons, the hospital was not sure whether the sample could be taken, but Mr. Tophill arrived and confirmed that he was willing to take the sample.
  Before the sample was taken, Mrs. Blood was again specifically asked for consent to the procedure taking place. It was clear to her that it was important and the medical staff in the room were asked to be witnesses to her response. She assumed that she was being asked to give her consent and the consent that Stephen would have given, had he been in a position to do so. She may have been asked whether she consented on Stephen's behalf, but she certainly would have done so.

  587
  At 6 o'clock, Mr. Tophill said that the first sample had not been successful, but that he would, if necessary, take another on Saturday when he returned. He was concerned that freezing the sperm might cause its condition to deteriorate. Mrs. Blood then said that she was happy to have the treatment there and then while, technically, her husband was still alive, if that was the best option, but Mr. Tophill said that there were other alternatives, including growing sperm from a sample of testicle tissue.
  At that time, Mr. Blood was being kept alive on life support machines. I will go into detail because this is important as to whether this matter falls within the Human Fertilisation and Embryology Act 1990. Mrs. Blood was anxious that the machine should not be turned off until further attempts had been made. Dr. Edbrook said that the second test as to whether Stephen was clinically dead had not yet been done and that it would not be done until at least the following morning, depending on his clinical condition. He said that there was no reason why Stephen should not be kept on the support machines.
  Mr. Blood's parents visited him for the last time on Thursday and indicated their acceptance that he was dead. Later in the afternoon, Dr. Edbrook said that the hospital was going to do the second test as to whether Mr. Blood was clinically dead. He then confirmed to Mrs. Blood the good news that the first sample had been much more successful than the hospital had initially thought. He said that it was
  "a million times better than expected".
  He asked whether, given that the first sample had proved okay and that the second test had confirmed Stephen to be clinically dead, it would be all right to turn off the machines. Mrs. Blood agreed.
  If the insemination had taken place while Mr. Blood was alive on the machine, there would have been no problem. Mrs. Blood would have been bearing her husband's child. At that time, she thought that she was pregnant, so it may not have been necessary to use the sperm. That was why she did not agree to use it there and then. Obviously, there was great grief when her husband died and Mrs. Blood resolved to have his child by any means.
  No other child's interests in relation to inheritance rights might be affected by the use of the sperm. There is no risk to a possible child's health or to Mrs. Blood's health. The Human Fertilisation and Embryology Authority has not suggested that allowing her to procreate in such circumstances, even in other countries, would offend against the policy of the 1990 Act or moral values, or create a substantial risk of injury to any public interest. Mrs. Blood does not understand what conceivable good reason there might be for preventing her from having her husband's child by combining their reproductive material, simply because he was unable to give his written consent when he was unconscious and dying. He undoubtedly did give his consent to the taking and use of sperm so that his wife might have his child. It is not fair or reasonable, under any law or any circumstances, moral, legal or otherwise, that this woman should be denied the right to have a child by her husband.
  The sperm samples are being held at the Infertility Research Trust for Mrs. Blood. She has been invoiced and asked to pay a charge. She has paid the most recent invoice—a charge of £100—for keeping the sperm there since March. Unlike third party donors, who receive
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  payment for donating sperm, she has had to pay another £250 for obtaining the sperm from her husband. The law looks more and more like an ass.
  If Mrs. Blood is permitted to export the sperm, she can have the treatment abroad. She can have it in the European Community, in Belgium, in New York or even in Greece. Insemination can be done there, but this point of law should never have arisen. Who would have objected to the HFEA giving consent for a wife to be inseminated with her husband's sperm? What are its reasons? The way that it objected is absolutely appalling.
  Mrs. Blood applied for the sperm to be used. Her application was rejected in May 1996 and, even though the HFEA received an affidavit in June 1996, it still refused to change its mind or to review its decision in any way, shape or form. Mrs. Blood has now been compelled to go to court to seek a judicial review of the 1990 Act. It has cost between £30,000 and £50,000—she does not receive legal aid. She has had to take a second mortgage out on her house to challenge the HFEA's view of the law.
  There are 21 members of the HFEA, a quango that has discretion to use its common sense, we would think, without having to be challenged. What is the point of having this quango if we have to go to court? We may as well let people just take a chitty in, as they do to get married in a register office, yet it has refused to use its discretion.
  There has been enormous sympathy for Mrs. Blood. Throughout Britain, people's response has been fantastic. Their views are all along the lines of The Times editorial, which said:
  "How can a dead man's interests be harmed by such use"
  of his sperm by his wife? It goes on:
  "Parliament gave it"—
  the authority—
  "total discretion on the import and export of sperm and embryos."
  The sperm could be used anywhere in the world, so what is stopping it from being used here? As the editorial says:
  "The authority should now use the discretion it possesses under the Act".
  Baroness Warnock, who chaired the committee whose findings led to the creation of the HFEA, said:
  "We didn't think of this kind of contingency"
  and that the case was "extremely exceptional". Every hon. Member has sat on Standing Committees making law and has tried to imagine what could happen. We probe and table amendments, not because we want to vote on the amendment, but simply to find out what could happen.
  During the passage of the 1990 Act, no hon. Member asked, "What would happen if a man went into a coma and died?" It is no one's fault, because none of us has a crystal ball. However, we expect the people who are put in charge of such authorities or privatised industries to use their common sense to act in the public's best interests—especially if the public do not object to a given course of action. Mrs. Blood is facing that type of situation.
  Lord Winston—professor of fertility studies at Hammersmith hospital—said that it was "cruel and unnatural" for such a decision to be taken, and that he would consider introducing in the other place a Back-Bench Bill, to which he thought there would be very little opposition, to remedy a situation in which a man can donate

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  "his kidneys, his lungs, his heart and every other organ without any informed consent, but is unable to give sperm to his wife. That seems ridiculous."
  The judge who conducted the judicial review—Sir Stephen Brown, president of the High Court Family Division—said that, although he deeply regretted the law's rigidity and the case had "stirred the emotions", he had no option but to carry out the law and to maintain its dignity. There was tremendous national media interest in the case after he said that and Mrs. Blood lost the case. The Secretary of State for Health was interviewed and said that he had great sympathy for her and that he would do what he could to resolve the situation.
  Mrs. Blood has two or three options. She could appeal against the decision—although I know that her legal advisers have asked her to delay such action until we have heard the Minister's reply to this debate. There may be an appeal, depending on what the Minister says. Perhaps the Government could find time for the House to consider an amendment tabled by Lord Winston in the other place. The Act requires only one more phrase, specifying that "in normal circumstances" written consent must be provided by donors. The addition of that phrase would mean that a husband could not give consent in abnormal circumstances—such as if he were in a coma. If the couple were not married, the authority might refuse consent.
  The necessary amendment would be very small and would require very little of the House's time. Perhaps the Government could provide one and half hours after 10 pm to change the law, which could be changed in two or three weeks. I should welcome such action, but we must also deal with the matter of Mrs. Blood's costs, which now total between £30,000 and £50,000 and will increase if she appeals against the decision.
  Perhaps the Minister will say, "We can find a sympathetic hon. Member who has won the ballot for private Members' Bills." But, as hon. Members who have won the ballot know, it is very difficult to amend the law with a private Members' Bill. Hon. Members can talk out an amendment, and a sufficient number of hon. Members must come on the day to vote in favour of it. The current Session is very short, and there may be only two or three Fridays for private Members' Bills. Moreover, the election is approaching, and an hon. Member who wins the ballot may have a marginal seat and may not wish to introduce controversial legislation. So even that approach is fraught with difficulty.
  The Minister must tell us what he intends to do about the situation. Late this morning, I heard on the BBC that the HFEA has said that it will re-examine the case. I do not know what that means. Does that mean that the authority will change its mind and approve Mrs. Blood's request, after the court has said that it cannot? That seems unlikely. Will the HFEA use its discretion to allow Mrs. Blood to take her husband's sperm abroad so that she can be inseminated? I do not know, because it has said only that it will re-examine the case.
  The authority has made no guarantee, and much firmer assurances will have to be given. If not, poor Mrs. Blood—who is determined to have her husband's child—will once again have to face the harrowing experience of going to the Court of Appeal and of paying for a provision that Parliament would gladly have made in the 1990 Act, had anyone thought of it at the time.
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  I am grateful for having had the opportunity of this debate, and I thank hon. Members for listening so patiently. I look forward to hearing the Minister's reply.
  11.24 am
  Dame Jill Knight: The hon. Member for Bassetlaw (Mr. Ashton) deserves to be paid great tribute for the way in which he has presented his constituent's case. He has been very factual, but he has also been very moving. He has demonstrated what the House is all about, and has undermined the arguments of those who constantly attack hon. Members and think that they do not do their jobs. The overwhelming majority of hon. Members, from both sides of the House, behave honourably and do their utmost in serving their constituents. The hon. Gentleman has done his utmost, and I can pay no higher tribute to him than that.
  The Blood case is very sad, and no one can help but be moved by Mrs. Blood's plight. I sometimes think that only those who have lost a beloved husband can understand what such a loss means. I have lost a husband, and I understand. I have the greatest possible sympathy for Mrs. Blood. Moreover, from what the hon. Member for Bassetlaw has told the House, I have no doubts about Mrs. Blood's excellent character, her experience and interest in children or the fact that, if she and her husband had been able to have a child in the normal way, they would have been extremely good parents.
  I cannot help thinking, however, of the old adage about hard cases making bad laws. The only aspect of the speech by the hon. Member for Bassetlaw that worried me was that not one word was said about the child. I am very concerned about children. I am concerned that, when children are brought into the world by methods that I can describe only as "unnatural"—that sounds unkind, but it is not meant to be; it is meant to be factual—or by a scientific procedure, they have the right to expect the law to protect them, because they are so utterly vulnerable. They have no say in whether they are to be born.
  Some years ago, when the House considered such children, we rightly said that the child's interests should be paramount. There were no two ways about it: we said that their interests are paramount. After hearing the tragic circumstances of the Blood case, which the hon. Gentleman has explained so well, in my heart I still cannot believe that the child's position should be downgraded because of the mother's tragic despair. I am extremely sorry for Mrs. Blood, but I should be very sorry for a child who would be bound to know when his father had died.
  All hon. Members understand that a child might not be born in this case at all, and that it is not correct to say that a child would definitely be born if Mrs. Blood were successful in her request and underwent the procedure. If it were successful and a baby were born, however, the child might grow up to be imaginative. For him to have to take on board the fact that he was born as the child of a dead man, and not until many months after his father's death, would be enough to cause nightmares in that child.
  Dame Elaine Kellett-Bowman: Will my hon. Friend give way on that point?
  Dame Jill Knight: No; I should like to finish this argument first.

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  All hon. Members understand that children are sometimes born and their fathers then die. We weep about such desperately sad cases, although the mothers in such tragic cases often bring up their children very well. Surely, if the interests of the child are paramount, there cannot be any doubt that the best way to have a child is with a father and a mother. Sometimes, that is not possible because something terrible happens, such as the father being killed in an accident. Of course I am not saying that a single mother or father—it could be the mother who dies—cannot bring up a child well. Many single parents do a marvellous job of bringing up their children.
  Dame Elaine Kellett-Bowman: Will my hon. Friend give way?
  Dame Jill Knight: Forgive me, but I must finish this point. My hon. Friend must be a little patient.
  Dame Elaine Kellett-Bowman: Please do not sit down without letting me in.
  Dame Jill Knight: I shall let my hon. Friend make her point, but I must say that there can be little doubt that the ideal way to bring a child into the world is with a father and a mother. It is no use saying that that is not the best way just because tragedies can occur.
  Dame Elaine Kellett-Bowman: I rarely disagree with my hon. Friend on such matters, but I cannot for the life of me understand her strong objection in this case. Given the fact that the mother will clearly adore the child and bearing in mind the history of the family, with the father also having wanted a child, why should the child have nightmares? He should be thrilled that his parents so wanted him.
  Dame Jill Knight: How can a child be thrilled that he has no father? How can a child be thrilled that he has only one parent? He can be sad about that, but he cannot be thrilled about it.
  Dame Elaine Kellett-Bowman: He will not have nightmares.
  Dame Jill Knight: A sensitive child might well have nightmares at the certain knowledge that he was born from a dead man. That frightens me.
  Mr. Eric Illsley: Will the hon. Lady give way?
  Dame Jill Knight: Yes, but this is the last time, because we do not have much time.
  Mr. Illsley: I am grateful to the hon. Lady for giving way. Is not consent the issue? If Mr. Blood had given written consent before he died, the child would have been born to a single parent. The issue is consent, not the effect on the child of being born by a particular procedure.
  Dame Jill Knight: The hon. Gentleman's point is reasonable, but it does not address the whole situation, which is as I have described. We do not know what the gentleman might have done. We think that we know, but
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  we are not sure. We cannot judge on what can be only a presumption. We know that such a child would be born from a dead man months and months—more than a year—after the father died. I do not think that it is ever a good thing deliberately to bring a child into the world with no father.
  The hon. Member for Bassetlaw rightly made some important and sympathetic points, but those points cannot give the child a father, which is what I am worried about. It cannot be right to say that fathers do not matter much or that it does not make two bits of difference whether a father is there. If the interests of the child are paramount, we must consider the fact that a child needs a father.
  The hon. Member for Bassetlaw said that the birth was prevented by the state. It was not. It was prevented by the tragic death of the poor man. The situation is not the same as for kidney, hearts or livers because, as I am sure that the hon. Member for Bassetlaw knows, such organs can be used only if they come from a virtually living man. Hearts or livers cannot be frozen. The two situations are not the same.
  I am sorry for Mrs. Blood and her predicament, but I would be even sorrier for a child deliberately brought into the world with no father.
  11.34 am
  Mr. David Alton: The debate so far has been conducted thoughtfully. We should all be grateful to the hon. Member for Bassetlaw (Mr. Ashton) for the way in which he has put the harrowing details of the case before the House—details that illustrate the moral choices that we have to make as a result of the Human Fertilisation and Embryology Act 1990. The hon. Gentleman will know that the hon. Member for Birmingham, Edgbaston (Dame J. Knight) and I voted against that legislation because, as we said at the time, it opened a Pandora's box. The fact of being scientifically possible does not necessarily make certain actions right. We said then that the Act would inevitably lead to the Human Fertilisation and Embryology Authority having to consider circumstances such as those of this tragic case.
  I echo the words of the hon. Member for Edgbaston on how hard cases can sometimes make bad law. However, that does not relieve us of the responsibility of examining the conduct of an authority established by Parliament. I entirely agree with the remarks of the hon. Member for Bassetlaw on the conduct of the HFEA and the need to reform that body. Most of my speech will address that.
  Before I come to that, I shall follow the hon. Member for Bassetlaw in addressing some of the issues raised by Mrs. Blood's case. The hon. Gentleman cited Lord Winston, with the example of someone giving consent for their kidneys, lungs or any other organ to be taken. Many of us carry organ donor cards because we recognise the need for medicine to have access to organs to save lives. However, there is a distinction to be drawn between the organs that we give to help maintain another person's life and those elements that create new life. That is the distinction that the House and the HFEA must examine carefully.
  Many people have argued that Mrs. Blood's desire to have her husband's child should be satisfied and that it is harsh and pedantic to use the law to prevent that, but it is important to consider all the ethical issues raised by the

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  case, particularly in view of the fact that the interests of Mrs. Blood may not be as clear cut as has sometimes been suggested.
  Great emphasis has been laid on personal choice. I have never accepted that the word choice should be paramount above the right to life. In his moving introduction to the circumstances behind the case, the hon. Member for Bassetlaw mentioned the fact that Mr. Blood was opposed to abortion. He believed, as I believe, that there must be limitations on choice. People do not have the right to do certain things. Our rights language has become one of the biggest problems that we suffer. Everything is considered to be a claimed right. We do not say enough about our responsibilities, duties and obligations. The right to create or destroy life is highly contestable. Parliament has a duty to protect the interests of a child and to weigh them carefully alongside the rights claimed by parents, doctors or scientists.
  Mrs. Blood's case is not simply about rights. It raises issues of consent, but it also concerns respect for human generation, the posthumous generation of children from dead parents and, as the hon. Member for Edgbaston said, a child's need for a father.
  An act of artificial insemination after the father has died cannot represent a couple's on-going commitment to each other, nor can it lead to the welcoming of new life into an existing relationship. The father is obviously no longer present as a living human being. To use a part of him to make a child is a travesty of normal, conscious human procreation.
  The need of the child for a father is one aspect of the case which has been neglected in the public discussion despite the fact that the HFEA specifically requires that need to be taken into account in giving fertility treatment. Indeed, that was the decision the House took when we considered the 1990 legislation. It is a provision that we laid down, so the HFEA is acting on something that Parliament insisted on.
  Mrs. Blood has argued that she could have had sperm from an anonymous donor who could, indeed, be dead by the time his sperm was used in fertility treatment. It is true that single women are sometimes given fertility treatment. However, that practice is of doubtful legality and it is a matter to which the House should return in due course. I hope that the debate that has been instigated by the hon. Member for Bassetlaw today will open a review of the legislation and of the workings of the HFEA.
  To treat a father simply as a source of genetic material and as someone whose presence will not be required at any stage is to ignore the strong interests of children in forming relationships with those who bring them into being. It is well known that adoptive children who, of course, are usually adopted by couples, frequently develop a strong desire to know their birth parents. The child of a single woman is deprived not simply of his or her genetic father, but of any father, genetic or social. Children need a male as well as a female parent in order to learn about human relationships, and boys in particular need a male role model at home.
  It has been claimed that Mrs. Blood has a right to the use of her husband's sperm, but that is very doubtful. Society has a strong interest in the creation of children
  594
  in circumstances that are conducive to those children's well-being, especially when health care professionals are involved in their procreation.
  Whatever a person's desire to have a child, a single woman faces a difficult task in bringing up a child single-handed. If the father is not present at any stage, not even during the pregnancy itself, the woman is deprived of an irreplaceable source of support. Two people, in a committed marriage relationship, should be involved in the creation of a child and two people should be involved, as far as is possible, in caring for the child so created. That is a perfectly reasonable demand for Parliament to make, even though it means that from time to time there will be terribly tragic cases of the sort described today.
  It would be wrong to breach the principle that wherever it is reasonably possible, if we are deliberately creating life, there should be a father and a mother to bring up that child. That is clearly in the best interests of the child, and in saying that, I am not making any judgment about people who, through other circumstances, are having to bring up children by themselves. Most people who are in that situation would say that they would much prefer to have the support of the father or the mother, depending on who is absent.
  The hon. Member for Bassetlaw has a strong point when he talks about the conduct of the HFEA. A year or so ago, the HFEA began the process of public consultation on the use of eggs from aborted girls who were to be selected by a scientist in Edinburgh who had sought permission to do so. The HFEA felt that it was a reasonable enough proposition to go out to public consultation. It failed to take an immediate stand on the principle of the deliberate selection of unborn baby girls and the harvesting of their eggs for use in subsequent fertility treatments, which would mean that the child's mother would be an aborted foetus and the grandmother the person who allowed the abortion to take place. That was a pretty hideous proposal which, as a result of the amendment tabled to subsequent legislation by the hon. Member for Edgbaston, which I supported, was outlawed.
  That proposal contrasts with this case, and it is no wonder that people are confused. To place such importance, as the HFEA has done, on the issue of sperm donation, whereas a fertilised egg is not to be treated in precisely the same manner, raises the question of the basis on which the HFEA operates.
  The constitution of the HFEA is the genesis of its dilemmas. On 18 November 1993, BBC Radio 4 broadcast the "Analysis" programme. The presenter, the admirable columnist from The Observer, Melanie Phillips, laid bare the way in which Parliament was manipulated into passing the 1990 Act. One example concerned the way in which membership of the Warnock committee of inquiry was determined.
  On 23 July 1982, the Government had announced the terms of reference for an inquiry into the ethical issues associated with human fertilisation and embryology. That was done largely to spike an attempt by Enoch Powell, then a private Member, to ban human embryo experimentation. The Oxford philosopher Baroness Warnock was appointed to chair the committee, which reported on 18 July 1984.

  595
  During her interview with Miss Phillips, Baroness Warnock admitted that she vetoed the appointment of a particular member of the committee because of that person's religious and moral beliefs. Miss Phillips had referred to the constitution of the committee, saying that
  "the shape these committees take is so important in determining their eventual conclusions."
  Baroness Warnock replied:
  "The potential chairman is approached either by the Minister or by the permanent secretary or both. But, of course, one doesn't know how many other people have been approached.
  I sometimes get the feeling really that they sort of wade through dozens of names and then come up with someone who's a sucker and says yes. But, at any rate, after that, the thing is shrouded in mystery really.
  I was then given a kind of draft list and asked whether there were any other people I thought would be obvious choices.
  Maybe people who were not yet among the great and the good. And was, with some difficulty, allowed a power of veto."
  In the interview, Baroness Warnock then said that she used the veto to exclude one nominee on the ground of that person's religious and moral convictions. She said:
  I just knew that I couldn't work with him. We went right up to the day before publication with the civil servant saying, 'But there's nobody else in the world.'
  So, in the end, the night before publication, I said, 'Well, will you please tell the Minister that it's a very bad way to embark on working on a committee when you know that there's somebody you're not going to find easy to work with.'
  The following morning two names were suggested. So I did win on that but it was very, very hard and it took a lot of persistence."
  I subsequently wrote to the Prime Minister to protest at the way in which a parliamentary committee had been rigged and to call for a better balance on committees considering ethical questions, between those who believed that ethical actions carried consequences and those who believed that there were no consequences. My letter received a courteous enough reply, but no action was taken.
  Baroness Warnock got her committee and she got her report. However, difficult ethical questions were ruled out of court from the beginning. In her own words, the committee deliberately excluded
  "questions of when life or personhood begins."
  That comes back to the point made by the hon. Member for Bassetlaw. As that question was one of the central ethical issues in determining the new law, it seemed an extraordinary omission.
  The report was widely cited in both Houses of Parliament during the passage of the 1990 Act. The Government, having established the committee, laid the committee's proposals before Parliament and hid behind the august figure of Lady Warnock as if the Bill had nothing to do with them.
  The 1990 Act for the first time permitted destructive experiments on human embryos. The debate today is in sharp contrast with the decision this summer to destroy up to 3,000 fertilised human eggs. This debate is an extraordinary contrast to the way in which the HFEA dealt with that issue.
  The relative ease with which the Warnock committee secured its objectives became the model for the composition and operation of the HFEA. Apart from loading its membership with people who share the Warnock view of ethics, the HFEA finances itself from
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  the very clinics it is supposed to police. Fees account for 70 per cent. of the authority's income. That is utterly incestuous. It means that people cannot afford to say no too often and, in the case of the HFEA, ever.
  The HFEA earns money from the creation of spare embryos, because it is funded through the licences it grants to the clinics that create the spares and then undertake the experiments. In terms of job security and future funding, it has a built-in incentive to make the situation even worse. That is no basis for good ethics.
  The members of the HFEA were chosen so that there would be no squeamishness about the practices that it was established to regulate. Its members are a mixture of the politically and religiously correct. They include Liz Forgan, the managing director of BBC network radio, and the Bishop of Edinburgh, who said that
  "we are all horn with adulterous genes"
  and that
  "genetic engineering may be compared with corrective medicine. such as the fitting of a pair of glasses."
  Another member is the actress Penelope Keith, best known for her starring role in "The Good Life". She is a neighbour of the former Secretary of State for Health, now Secretary of State for National Heritage.
  There is not and never has been a single member of the HFEA who upholds the sanctity of human life from fertilisation. Such old-fashioned religious belief is thought of as quaint at best and as dangerous bigotry at worst.
  The HFEA behaves in an arrogant and unaccountable manner, arrogating powers to itself. For example, it has refused to allow Members of Parliament sight of the study that it undertook into the freezing of human embryos—so much for freedom of information, public disclosure or access. The HFEA has also been deceitful, and was forced to withdraw a published claim that French scientists had withdrawn their work demonstrating a link between the freezing of human embryos and subsequent disability.
  The House must return time and again to those questions and others raised by the hon. Member for Bassetlaw today. The HFEA must be reformed and members appointed to it who uphold the dignity and sacredness of human life. There is also a need to address the deep and complex questions that have rightly been placed before the House today.
  11.49 am
  Mrs. Elizabeth Peacock: I greatly welcome the opportunity to discuss this important subject and I congratulate the hon. Member for Bassetlaw (Mr. Ashton) on obtaining today's debate. It gives us time to consider the various issues and the workings of the HFEA.
  I intend to raise various questions and, perhaps unusually in the House, suggest some answers. But, as a mother myself, I want to say at the outset that I have the greatest sympathy for Mrs. Blood and the tragic circumstances in which she now finds herself. The hon. Member for Bassetlaw put across her case with great dignity and she has the sympathy of the House in the predicament in which she now finds herself.
  We are often asked whether the HFEA is doing a good job and working well. As the hon. Gentleman said, it may not be. It was established as a watchdog to oversee the test-tube baby procedure, but in practice it has become more the lapdog of the embryo research industry.

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  The legislation establishing the HFEA was argued for largely on the ground of helping the infertile to have children, but the research licensed by the authority has included studies with the opposite aim—of trying to prevent the birth of children to fertile couples, as the recent case suggests, and that has included the testing of drugs such as RU486, designed to cause abortion, as well as those designed to prevent conception.
  Does the HFEA provide full information about its work and the embryos created and used in research? It has failed to give a satisfactory account of the fate of thousands of human embryos created in laboratories under the aegis of the authority. The Department of Health, using figures supplied by the HFEA, left 175,000 embryos unaccounted for. We do not know where they are. A further set of figures on that subject were inconclusive.
  HFEA statistics have recently been criticised by one of its own members, Dr. Brian Lieberman, who pointed out that the authority's practice of citing the so-called adjusted live-birth rate as the main figure in the league table of fertility clinics is misleading, as it masks the number of twin and triplet births occurring.
  Dr. Lieberman said:
  "One is concerned not just with adjusted live-birth rates, hut with live, healthy, non-handicapped babies … I'm concerned about triple pregnancies. The higher the rate of triple births, the higher your chances of having handicapped children."
  That was reported in The Independent on 9 October 1996.
  Was the HFEA right to refuse to Mrs. Diane Blood permission to be inseminated with sperm taken from her late husband while he was in a coma? Many criticisms may be fairly levelled at the HFEA, but whatever one may think of the decision, it was following the letter of the law. The hon. Member for Bassetlaw suggested that that law should be changed.
  The requirement that a person's gametes should not be used to create embryos without explicit written consent is perhaps the only criterion that the HFEA is required to apply that is not an arbitrary restriction. All the other criteria that it is called upon to enforce, such as time limits on the keeping of embryos, the kind of scientific research for which embryos may be created, or the number of children who may be fathered by a sperm donor, are, to a certain degree, arbitrary. We may argue, as many of us do, that some of those arbitrary criteria are wrong, but at least the requirement for consent is a morally valid point.
  Should the requirement for written consent be changed in some way to allow for cases such as that of Mrs. Blood and others, tragic though they are and with which we all have sympathy? If so, it is most important that specific circumstances should be spelt out in law. It would certainly not be wise to give the HFEA discretion in the matter and it would be completely unacceptable to give it discretion over the use of female gametes. The HFEA keenly promotes egg donation. It facilitates embryo experimentation, both on so-called spare embryos left over after fertility treatment and on embryos created specifically for experiments.
  It may be true that if insemination had taken place before Mr. Blood died—the point made by the hon. Member for Bassetlaw—it would have been within the law. However, my understanding is that the HFEA needs
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  written consent for such action to be taken. I hope that my hon. Friend the Minister will confirm that when he replies. If we are now saying that that is wrong, changes will have to be made. But once a change is made, a precedent is set, whether or not the authority made the decision without the protection of the law. As we all know, much of our law is based on precedent, which then becomes case law. It is the responsibility of the House to take such action, not to leave it to the say-so of the authority or lawyers making representations.
  The HFEA, in its 1994 report on new ways of obtaining eggs for IVF treatment and embryo experiments, stated that it believes that
  "there is no objection in principle"
  to obtaining ovarian tissue from a dead woman to provide infertility treatment as long as she has given consent. In the section on using cadavers as a source of eggs to create embryos for research, it discussed only the issue of consent as a bar to using a dead woman's eggs in that way. To allow the HFEA to disregard consent would give it carte blanche to license activities involving vast numbers of embryos as guinea pigs.
  I understand that the HFEA recently banned payments to gamete donors. Surely that shows that it is restrained in its promotion of sperm or egg donation. Such a move is to be welcomed, but it must be seen in perspective. Previously, a maximum payment of only £15 was permitted to gamete donors. But the HFEA has in other cases, particularly with reference to egg donors, shown contempt for the principle of consent. It has argued that in the case of an aborted female foetus, it would be permissible to retrieve the primitive egg cells from such a baby and use them to create embryos for research. That is not yet a practical possibility, thank goodness, but technically it may be feasible.
  In such a case, as we have already heard, the mother of the embryo would be an aborted baby who could never possibly consent to the use of her eggs. The authority argued that, as next of kin, a mother should not be allowed to give consent on behalf of her dead daughter. That suggests a minefield of great moral and legal issues, which the House should consider carefully and discuss at greater length than is possible this morning.
  The HFEA has rejected the use of eggs from aborted female infants for infertility treatment. However, that decision was based not on moral principles, but on social and psychological considerations. In the event, its ruling was academic as the amendment to the Human Fertilisation and Embryology Act 1990, promoted by my hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight) and supported by many hon. Members, had already been approved and was subsequently incorporated into statute.
  There are objections to the workings of the HFEA. It was not established with a remit to protect the human embryo, but rather it was established to apply certain limits on the abuses to which an embryo might be submitted. The law imposes restrictions on what may be done to test-tube babies and provides wide-ranging protection for them, but it also creates broad exceptions and established the HFEA in the role of licenser of all manner of abuses of the embryo. The objection to the HFEA is not simply that it fails to protect the embryo, but that it was never intended to do so. I suggest that it was established to add a veneer of respectability to the

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  business of using embryonic humans as laboratory animals, freezing them for long-term storage and even allowing them to be the object of trade.
  The HFEA may withdraw or withhold a licence from a clinic or research project if it fails to meet required standards, but in practice those standards have little to do with showing respect for the embryo in the test-tube. A research project may fail to receive a licence because it is not scientifically sound, but it is unlikely to be rejected because it is morally bankrupt. An IVF clinic might be in danger of losing its licence to treat infertile couples because too few babies were born to its clients, but not because it destroyed too many embryos in the process.
  Time is moving on and does not allow us to discuss fully all the points arising from the debate. The matters that I have raised, like those raised by the hon. Member for Bassetlaw, suggest that we should carefully re-examine the decisions taken by the HFEA and the rationale behind them. I warmly welcome the opportunity that the hon. Gentleman has given us to discuss these important issues, which I believe the House will consider more fully in future.
  12.1 pm
  Ms Tessa Jowell: I join other hon. Members in congratulating my hon. Friend the Member for Bassetlaw (Mr. Ashton) on securing the debate. He has been tireless in his support for his constituent, Mrs. Diane Blood, and I am sure that other hon. Members will join me in thanking him again for giving the House the opportunity to discuss the important issues raised by that case.
  This is not an issue that divides the House along party political lines. It touches the conscience and sensitivities of every Member. No one could fail to have been affected by Mrs. Blood's determination in fighting her case, and to have been moved by the distress that it clearly caused her and her family.
  With such issues, the legislation must be kept under regular review. Raw human emotion is aroused, and technological advance creates moral dilemmas that may not have been anticipated only a few years ago. Precisely because of that, the House passed the Human Fertilisation and Embryology Act 1990, but the recent judicial review of Mrs. Blood's case exposed flaws in the Act and it is right that Parliament should have the opportunity to revisit the issues.
  When the Bill was debated in Parliament, the then Secretary of State for Health, the right hon. and learned Member for Rushcliffe (Mr. Clarke), said that there was
  "genuine agreement about the need for statutory regulation in this highly sensitive and fast developing area of science and medicine."
  That consensus still prevails, but I believe that hon. Members on both sides of the House will share my view that the recent case has tested the 1990 Act and identified an aspect to which the House should urgently return.
  The Government have implicitly acknowledged the inadequacy of the Act to judge such cases. The Secretary of State for Health stated that the Government did not intend to stand in the way of a private Member's Bill. While the Government seem to be adopting a disinterested stance in this case, it is not clear that the Human Fertilisation and Embryology Authority is fulfilling the role that they envisaged for it when the legislation was introduced.
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  One of the explicit purposes of the Act was to remove from the political domain the responsibility for decisions on such matters. During the Second Reading debate in 1990, the right hon. and learned Member for Rushcliffe implied that the Government intended the HFEA to be able to act independently and use discretion. He said:
  "It has been argued that, rather than having a completely independent authority, Ministers should be responsible for these matters. We decided against that, because it would place Ministers and the House in a permanently difficult position if. as a semi-political issue, it was said that Ministers should take this or that view on medical or scientific matters … The code of practice of the authority will have to be submitted to the Secretary of State and laid before the House, but some independence in medical and scientific matters is in the interests of Parliament and the Secretary of State."—[Official Report, 2 April 1990; Vol. 170, c. 915–20.]
  We can therefore assume that the authority was intended to use independent judgment in particular cases, not simply and slavishly to follow established rules and procedures. The Blood case has shown that the authority does not believe that it has such powers and independence. Ruth Deech, the chairman of the authority, said:
  "Parliament carefully constructed the…Act so that courts would not have to judge each case individually, asking questions of an applicant which may prove difficult—often agonisingly difficult—to answer. It was made clear that decisions about people's genetic and reproductive material should not be left to the discretion of doctors or next of kin."
  She seems to mean that such decisions should not be left to anyone's discretion.
  We are left with stalemate. Ministers stand back from the work of the authority, but the authority says that it can work only to the letter of the law. The court says that it cannot now substitute its discretion for that of the authority, unless the authority has acted with manifest unreasonableness. Parliament, however, intended that there should be room for discretion. A straitjacket has been created where none was intended.
  It is clear that the authority has already used its discretion once in the Bloods' case. The Act states that sperm can be stored only with the written consent of the donor, yet the authority waived that requirement after taking into account the compelling and compassionate grounds in their case.
  In his judgment, Sir Stephen Brown referred to a note of a telephone conversation that took place in March 1995 between Professor Cooke of the Infertility Research Trust, where Stephen Blood's sperm was to be stored, and Flora Goldhill, the then chief executive of the authority. In her note of their conversation, Ms Goldhill recalled that
  "The current situation was so traumatic for the wife in that the decision to turn off the life support system would be made in the next few hours that it would appear uncaring and unnecessarily bureaucratic to insist on the provision of proper legal consent at this time."
  That was a sensitive, practical and humane response.
  The authority now says that Stephen Blood's sperm was stored illegally. That may be so, but I do not believe that anyone in the House would condemn Ms Goldhill for taking that decision. She clearly reached it after careful thought in the light of the compelling circumstances of the case, and I believe that it was the right decision.
  The question that follows is this: if the authority has already acted once in this case with discretion and with attention to the special circumstances, why does it now

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  adopt the view that it can no longer exercise any discretion—and therefore compassion—in this case? Technically, perhaps, it should not have consented to the storage of Mr. Blood's sperm, but the fact that it did so suggests that agreement to the eventual use of the sperm by Mrs. Blood cannot have been ruled out.
  The Act was framed in unequivocal terms. It was the product of growing unease in the House and in the country about the pace of development in reproductive technology and the complex moral questions that that posed, and to which several hon. Members referred today. Indeed, Sir Stephen Brown states:
  "It is no doubt because the whole field of the artificial insemination with sperm obtained from a man who subsequently died was and is highly sensitive and ethically controversial that the Act of Parliament permitted no element of discretion on the part of the Authority."
  The current chair of the authority, Ruth Deech, shares this view. After the ruling she said:
  "The court's decision has confirmed, however, that the Authority complied with Parliament's wishes as set out in the HFEA Act 1990".
  She has also said:
  "The authority has been damned as heartless, stubborn and pedantic. But the law is clear and mandatory."
  That, perhaps, is the nature of the problem. Cases of this kind are by definition enormously complex and individual. No two cases will be the same and they cannot all be judged by an over-rigid set of rules. Somewhere along the line, it is vital that there is scope for informed and sensitive discretion to be exercised by properly authorised people.
  There are other problems with the legislation. We know that the issues raised by the case that we are considering today were not fully dealt with when the Bill went through Parliament. As my hon. Friend the Member for Bassetlaw has already said, Baroness Warnock, who chaired the committee of inquiry, now admits that the committee did not even hypothetically consider a case of this type; but that if it had, she felt that it would have seen no ethical or public policy objection to allowing the woman to become pregnant by her husband's frozen sperm, in this country or abroad. That acknowledgment provides important evidence of the fact that neither the Warnock inquiry nor Parliament considered the issues raised by Mrs. Blood's case.
  There are also other reasons that justify the House revisiting the issue. It is now six years since the Bill passed through Parliament. Such is the pace of change and development that, even without this case, we should now have had to consider whether the original legislation is still adequate. Mrs. Blood's case simply makes the need for further parliamentary consideration more urgent.
  Science has moved on since the Act was drafted; it is now possible for a child to be conceived posthumously by other means. As my hon. Friend said, it is now possible, outside the terms of the Act, for testicular tissue to be taken from a man in a coma and for sperm to be created from it. Today, we are calling for the House to look again at the adequacy of the legislation to judge cases of this type. There is a case for the Secretary of State for Health to intervene and instruct the authority to amend its general direction so that it can exercise greater discretion.
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  No single piece of primary legislation will ever be sufficient of itself to deal with such a complex area and with such fast-moving technology.
  Moreover, we urge the Minister to come up with proposals that will give the authority more discretion and to allow Parliament to debate those proposals on a free vote.
  Lord Winston, who has great experience of the issues surrounding fertility and embryology, is considering introducing a Bill in the other place to amend the Act and allow greater flexibility in such cases. By whatever means an amendment to the law comes about, we urge Ministers to act with speed.
  Diane Blood's case has aroused enormous public sympathy. At judicial review, Sir Stephen Brown said:
  "I have found this to be a most anxious and moving case. My heart goes out to this Applicant."
  It would seem that the authority alone is unmoved. It has sought to defend the position it has adopted by dismissing opposition to it as the product of sentiment. I suggest that any public agency such as the HFEA has a responsibility to listen to, and take heed of, public opinion.
  The HFEA has struck conflicting poses in explaining its position. On the one hand it has stated that it "profoundly sympathises" with the applicant, but its chair has also accused supporters of sentimentality. She has said:
  "Critics of the HFEA say…consent was implicit because Mrs. Blood and her late husband clearly wanted children and Mr. Blood would certainly have agreed to the procedure. This argument is understandable, but it is sentimental."
  On the issue of consent, a parallel has been drawn with cases where the courts have ruled that a woman has no right to risk her own death and that of her unborn child by withholding consent to a caesarian birth. The rulings represent a trend in which the courts have edged away from the principle that medical interventions cannot be imposed except when the patient is mentally ill or unconscious. As The Independent has said:
  "They show that the principle of consent is becoming a much more flexible concept when seeking to preserve life but not, it seems from Diane Blood's case, when seeking to create it.
  It is quite clear that public opinion is overwhelmingly sympathetic to Mrs. Blood and feels that she has been unjustly treated. There is absolutely no evidence from the case so far that any child born into Mrs. Blood's extended family would not find itself growing up in a secure and loving family. In short, it would not be disadvantaged. Mrs. Blood has incurred great hardship in meeting the enormous legal costs inherent in a case of this kind, but everyone to whom she turns wrings their hands and says that there is nothing to be done.
  Parliament is responsible for this stalemate: Parliament should resolve it by giving the authority a reasonable but not excessive amount of discretion, to enable cases at the margin to be sensitively and speedily resolved. Technology will always be faster on its feet than the legislator, but we must be able to deal with the difficult and sometimes heart-rending decisions that changing technology will force us to confront without constant recourse to primary legislation.
  I hope that this House will act and, in so doing, will recognise the suffering that Mrs. Blood's case has exposed.
  12.16 pm
  The Parliamentary Under-Secretary of State for Health (Mr. John Horam): We are all extremely grateful to the hon. Member for Bassetlaw (Mr. Ashton I for initiating this debate so early in the new Session. These are important matters and it is right that they should be debated in Parliament. I congratulate the hon. Gentleman on the moving and thoughtful way in which he put the case for his constituent.
  I should like first to remind the House of the framework within which the authority and clinicians have to operate. Fourteen years ago, in 1982, in the light of concerns about techniques such as in vitro fertilisation and the use of human embryos for research, the Government asked Baroness Warnock, as she now is, to chair a committee of inquiry. The committee's recommendations were published in 1984. There followed a consultation period. In 1986 the Government issued a consultation paper and, a year later, a White Paper which formed the basis for the Human Fertilisation and Embryology Act 1990. That Act contains important provisions on research on embryos, on the welfare and legal status of children born following the provision of relevant treatment, on the need for those providing gametes, eggs or sperm to consent to their use in particular circumstances, and on the establishment of the HFEA to regulate the whole system.
  There has been a remarkable amount of public consultation over many years. The legislation was passed on a free vote after lengthy debate in both Houses. It was the first such comprehensive piece of legislation in the world, and it provides the parameters within which the Human Fertilisation and Embryology Authority operates. The authority's role is to regulate the activities of treatment and research centres, to promote good practice and to provide information and advice. The authority is fully accountable to my right hon. Friend the Secretary of State who, in turn, is answerable to Parliament for all matters concerning the authority. It produces an annual report which is placed before the House, as well as a code of practice to guide those offering and providing treatment. Like all such bodies, the authority is subject to review every five years.
  In recent months much attention has been directed to individual cases. I can deal only with the issues that they raise and the broader framework within which decisions can be taken. Like other right hon. and hon. Members, I recognise the human side of such cases as well as the emotion that is integral to them and which they generate more widely. However, as I have said, Parliament decided that there was not to be a free-for-all in these matters, so there must be rules which must be observed by those to whom they apply. Sadly, at times, wherever the line is drawn it will result in some hard cases.
  The hon. Member for Bassetlaw spoke about the case of his constituent, Mrs. Diane Blood, who wishes to be inseminated with her late husband's sperm. The president of the Family Division has described this as
  "a most anxious and moving case".
  That point was made also by the hon. Member for Dulwich (Ms Jowell). I concur totally with the feelings of the hon. Lady and the president on this matter. We have all admired Mrs. Blood's courage and determination and have great sympathy for her. I understand that Mrs. Blood has been granted leave to appeal, should she wish to take
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  it, against the recent High Court judgment, so although she has decided to abandon her anonymity I must avoid going into too much detail.
  There are some general issues that have been widely commented upon over the past couple of weeks and which we should cover. Some of them have been dealt with during the debate. First, Parliament decided in 1990 that written consent must be provided before eggs or sperm—or, for that matter, embryos—may be stored or used for treatment or research. The notion of consent goes to the heart of the legislation and featured prominently in the Warnock report which preceded the Act. As with the storage or use of embryos, consent is not something that can simply be waived. It is a statutory requirement. I confirm that to my hon. Friend the Member for Batley and Spen (Mrs. Peacock) who raised that matter. It is a statutory requirement under the Act as passed by Parliament.
  Secondly, the 1990 Act enabled the HFEA to specify in directions the conditions and circumstances under which gametes may be exported abroad. Accordingly, in 1991, the authority issued general directions which permitted the export of eggs and sperm where written consent had been given. By the same token, it prohibited such export if the gametes could not be used for the intended purpose in the United Kingdom. Otherwise, of course, the regulation that exists in this country could simply be circumvented by removing the gametes to another jurisdiction. So once again, on the question of export, consent is a fundamental issue.
  Consent is fundamental to all medical interventions. There are many issues to be considered by those embarking upon assisted conception, including the welfare of the new child as well as that of any existing children-although there are no existing children in this case. Also, we all respect—and must respect—the right of the individual to determine what, if anything, is to become of his or her genetic material. It is not for the HFEA to try to second-guess the wishes of any patient in that regard.
  Even where consent is obtained, the welfare of the child must be considered. Paragraph 4.4 of the Warnock report said:
  "The majority view expressed to us however, saw AIH (artificial insemination by husband) as an acceptable form of treatment, where clinically indicated. We see no moral objection to its practice. We believe that where there is the intention to bring about the birth of a child and this takes place within the context of a stable relationship, such intervention is acceptable. It is simply a means of bringing together the sperm and egg of a husband and wife so that fertilisation can take place in vivo. Nevertheless we have grave misgivings about AIH in one type of situation. A man who has placed semen in a semen bank may die and his widow may then seek to be inseminated…This may give rise to profound psychological problems for the child and the mother."
  In paragraph 10.9 the report says:
  "The use by a widow of her dead husband's semen for AIII is a practice which we feel should be actively discouraged."
  Professor Michael Hull, professor of reproductive medicine and surgery at Bristol university, commented on the case of Mrs. Blood in a letter to The Times on 24 October. He said:
  "The fundamental ethical concern in all fertility treatment must be for the welfare of the offspring…Is the fact that children arc born fatherless due to accident reason enough to allow treatment which plans such an outcome? Is our society ready to abandon its foundation on the traditional family?"

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  All those concerned in this case should take that to heart.
  As the hon. Member for Dulwich conceded, the HFEA has behaved sympathetically in the case of storing the sperm. She recounted the telephone conversation that took place. It would be wrong to say that the HFEA has been unsympathetic. I know that it would wish to be sympathetic and to give full consideration to the circumstances in which Mrs. Blood finds herself. Therefore, it decided last Thursday to give further consideration to one aspect of the case, which is whether the gametes could be exported. Accordingly, I understand that Mrs. Blood, through her solicitors, has been asked if she wishes to place any additional material before the authority. I can assure the hon. Member for Bassetlaw that that will happen.
  Mr. Ashton: May I press the Minister on that? It is a welcome assurance but Mrs. Blood is now having to decide whether to go to the Court of Appeal, virtually this afternoon. That assurance is a sympathetic assurance in that the authority will look kindly towards the export of the sperm. However, is the Minister saying that there is no way in which the Government will provide the House with an opportunity to alter the law in the near future?
  Mr. Horam: I was about to come to that point. Suggestions have been made by the hon. Members for Bassetlaw and for Dulwich and others that the law should be amended to allow variation of circumstances and greater discretion in order to take into account evolving medical developments. This is genuine free-vote territory and it is for the House to determine whether it wishes to go down that route. If, in due course, it wishes to do so—it would take time—my advice would be for the House to ensure that it is in a position to take a genuinely balanced view of all the implications.
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  The present legislation was passed after substantial public and parliamentary debate and is carefully drawn. It is therefore not an area in which either policy or legislation should be tinkered with on the spur of the moment. I have listened carefully to the points made by hon. Members today and I have noted carefully the views expressed on both sides of the argument over the past few weeks.
  Mr. Michael Alison: Will my hon. Friend comment on another aspect of the post-natal well-being of the child, since the interests of the child are paramount? There is an allegation that not enough is being done to gather data about how the so-called test-tube babies get on later in life and the extent to which they are exposed to the risk of suffering from a late congenital disorder that they contracted via IVF. Those are important issues and, as I understand it, no monitoring is being undertaken.
  Mr. Horam: I am glad to reassure my right hon. Friend that two studies have been undertaken, one in Cambridge in 1994 and another at Manchester university. Both studies found that there was no real difference between children born of a frozen embryo and those born more normally.
  Finally, I am sure that we all agree that the HFEA has challenging responsibilities.
  Ms Jowell: Will the Minister give way?
  Mr. Horam: No, I have only a few moments left.
  The authority has faced a long summer and autumn in the full glare of publicity. It has an extremely difficult and often thankless task, and in my view it has acquitted itself extremely well.

  Veterinary Education and Training
  12.30 pm
  Sir Colin Shepherd: First, I thank my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, the hon. Member for Tiverton (Mrs. Browning), for coming to the House to help with a matter that is of such concern. The entire veterinary profession will be grateful to her.
  My hon. Friend will know that for some years I have served as a Privy Council-nominated member of the council of the Royal College of Veterinary Surgeons. As a lay member of that council, I express my alarm at the concern that is continually voiced by my veterinary colleagues on the council and in other sectors of the veterinary profession that there is no uniformity of standards in education and training across the European Union and the European economic area.
  My years with the council have left me in no doubt about just how seriously the Royal College of Veterinary Surgeons regards the maintenance of standards within the United Kingdom veterinary profession. It is jealous indeed.
  I need not remind my hon. Friend of the crucial need to have common high standards of theoretical, practical and ethical training throughout the EU and the EEA if there is to be public confidence in the ability of the European veterinary profession to provide for the safe movement of animals into and throughout the EU. With the removal of border checks, there is an increased need for standardised, reliable and unambiguous certification and all that flows from that in terms of confidence, especially among livestock owners. There is also a strong link between basic veterinary education and certification as we have in the United Kingdom.
  My purpose in raising the matter today is to press for progress in achieving the goal of comparable high standards across all the schools in Europe. As the royal college is obliged to register anyone who applies and has a recognised qualification from a European veterinary school, it must be beyond doubt that the letters MRCS have to be unequivocally a hallmark of quality that is completely reliable.
  I first became alarmed in early 1993. I need not rehearse the legislative background that resulted in the establishment of the Advisory Committee on Veterinary Training back in 1978 in line with the European directives, with its responsibility
  "to ensure a comparatively high standard of veterinary training in the Community".
  I am now alarmed by the fact that the committee is being denied the means to discharge its work. I refer to the reduction in the number of meetings and the withdrawal of financial and managerial support for the system of visitations to veterinary schools.
  The importance of confidence in the quality of veterinary qualifications was brought home to me by a reported experience in a United Kingdom abattoir when a Spanish official veterinary surgeon was unable to recognise the nervous symptoms displayed by a cow during an ante-mortem examination. It became clear that the OVS was not familiar with the signs of bovine spongiform encephalopathy, was unsure what action to take and did not have the nous to read the operations manual.
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  I am reliably told that much of the training of Spanish vets in food hygiene can be extremely good-perhaps better than ours. However, we need to know that it is uniformly good so that we can be confident in hiring a vet with recognised qualifications from Spain or elsewhere overseas.
  I am also reliably informed that veterinary faculties have been opened in some regions of the EU—particularly Spain, Italy and Portugal—purely on the ground of local political pressure and without regard to demand for their product or the inadequacy of funding.
  It is clear that the system of visits is vital and that they should be as rigorous and penetrating as those that have been practised in United Kingdom schools. Whereas United Kingdom schools have been visited every seven years or so, it is worrying to note that in the past 10 years only 22 of the 52 EU schools have been visited. We must bear it in mind that there is also the need to visit EEA schools and those in non-EEA states that have common borders with the EU. With visits currently planned at about four per year, there will be an interval of nearly 15 years between visits—far too long a gap.
  It is also worrying that an excessive number of veterinary students are being trained in Europe, while there is a perceived need to increase the numbers being trained in United Kingdom schools. As the Federation of Veterinarians of Europe put it in its discussion paper of May 1996:
  "Excessive student numbers add to the growing unemployment figures of veterinarians in a number of countries and result in a lowering of standards in schools which has implications not only for the state concerned but other members who are the recipients of exported animals and migrating veterinary surgeons."
  That is particularly important for the United Kingdom, as Mr. Roger Eddy, a council member of the Royal College of Veterinary Surgeons pointed out in his address to the British Veterinary Association congress in Chester this year:
  "In each of the last five years more graduates from overseas have been registered than from the UK. In 1995 only 45 per cent. of registrations were from the UK and there were more graduates from Spain than from Ireland which has always been a supplier of graduates to the UK."
  It is worrying that some courses in Italy have such deficiencies that they are technically in breach of the directives. Schools which should be declared delinquent are still turning out graduates whom the royal college still has to accept. It is also worrying that such a rigid attitude should be taken by the European Commission. Directorate-General XV appears to be concerned only with the regulation and the internal market when perhaps it would be sensible for it to collaborate with DG VI, which has to deal with the consequences of inadequate veterinary standards, as was pointed out in 1994 by Mr. Barry Johnson, the then president of the royal college, in his letter to DG XV.
  In 1994 the matter was raised in another place by Lord Soulsby, a distinguished former president of the college. He expressed the worries of livestock farmers that there was an animal disease time bomb ticking away as a result of the mad rush to a single market in the movement of animals without ensuring that the necessary standards of veterinary education and veterinary practice applied throughout the EU. He went on to say that those responsible in the Commission would bear a heavy responsibility if our worst fears regarding imported animal

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  disease were confirmed. An equal responsibility will lie on the Council of Ministers if it allows the Commission to get away with it.
  I do not think that the noble Lord had BSE in mind, but that catastrophe serves to demonstrate the scale of the problem when things go wrong. Let us not forget swine fever, Aujesky's disease or foot and mouth disease, all of which can easily achieve pandemic proportions. It is an important matter, given the need for many United Kingdom cattle farmers to restock in the aftermath of the BSE culls.
  In his reply, Lord Howe, the then Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, expressed his shared concern. In the light of the Commission's December 1993 report on subsidiarity, he said:
  "The United Kingdom supports the application of subsidiarity and will, of course, examine the results of any such review. Nevertheless, the potential costs to the Community and the UK of inadequate standards of veterinary training are such that any proposed changes would have to be examined very carefully."
  Two years on, the question must be: what further thoughts does my hon. Friend the Parliamentary Secretary have? Subsidiarity may be all right in the United Kingdom, where we trust our standards, but can we trust standards everywhere else?
  Later in his reply, Lord Howe said that
  "financial arrangements for the EAEVE visits are still unclear and discussions are continuing with the Commission to resolve the question of funding.—[Official Report, House of Lords, 5 July 1994; Vol. 556, c. 1218–19.]
  If I understand the position correctly, the Commission has now completely backed off funding, leaving it to the deans of the schools. Will my hon. Friend the Minister confirm that or put me right?
  The then Minister referred also to the withdrawal of support from the sectoral directives, which would have the effect of doing away with the Advisory Committee on Veterinary Training. Given that the Department of Trade and Industry is espousing the deregulation exercise through the simpler legislation for the internal market—SLIM—initiative, how does that square with the implied support by the then Minister for the ACVT? This is particularly worrisome because one of the ACVT working party meetings for 1996 has been cancelled. All the signals are that there is no support for the mechanism that is to be used to examine training.
  Given the conflict between the Department of Trade and Industry and the Ministry of Agriculture, Fisheries and Food, what interdepartmental consultations are taking place between the Department and the Ministry that might parallel the consultations that should be taking place between DG XV and DG VI within the European Commission?
  At the end of his reply, the then Minister said that assurances had been received that the principle of visitation is one which the Commission firmly supports. Pressure would be maintained, he said, to ensure that the proposed voluntary scheme for visitations would get off the ground and that there would be a proper programme of visits. The then Minister said that he would ensure that if deficiencies were identified, the Commission would be pressed to take action. Alas, it is clear from the
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  correspondence between the Royal College of Veterinary Surgeons and the Commission, and from the concerns and frustrations expressed by the Federation of Veterinarians in Europe in its paper, that little progress, if any, is being made.
  Throughout all the papers and comment that I have read and heard runs a common thread. That is the need for strong political pressure to be applied by most member states.
  We are fortunate in the United Kingdom in that legislation bearing on veterinary surgeons promotes a close relationship between the governing body of the profession, Ministers and Parliament. Other veterinary bodies in other member states are not so well placed. It behoves the United Kingdom, therefore, to take a strong lead in securing the equalisation upwards of standards in European veterinary education and training. I note that my hon. Friends the Members for Congleton (Mrs. Winterton) and for North Thanet (Mr. Gale), who take a keen interest in veterinary affairs, nod in assent. I know that many other colleagues who serve as honorary associates of the BVA, as I do, will share my view.
  I press my hon. Friend the Minister and the Minister of Agriculture, Fisheries and Food to take a lead and to ensure that visitations take place at a proper rate. There should be at least twice the number of visitations, or more. They should take place with proper rigour and depth. There should be proper support to ensure that there is swift analysis and reported results. We have had a hint from the BSE crisis. We just cannot afford to get things wrong.
  12.44 pm
  The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Angela Browning): I am grateful to my hon. Friend the Member for Hereford (Sir C. Shepherd) for bringing about a useful debate on an important matter. It is obviously of importance to my hon. Friends who are in their places in the Chamber. Given the amount of correspondence that I receive about animal welfare, it is a great pity that veterinary standards are not, apparently, of interest to Opposition parties.
  I think that we are all agreed that to ensure the health of animals and the safety of animal products moving both within the European Union and into the Community from third countries, we must deal with extremely important matters. I agree with the concerns that have been expressed by my hon. Friend the Member for Hereford.
  It is important that veterinary surgeons from all member states who are responsible for the certification of movements are trained to a comparably high standard. We can all recognise that to ensure confidence in the internal market, it is necessary for all veterinarians to be trained to a comparably high standard in accordance with the two sectoral veterinary directives. Deficiencies in training could lead to a failure to recognise serious animal disease, and could put the EU at risk by the spread of disease through the movement of animals or their products.
  Perhaps I might draw on the specific case mentioned by my hon. Friend regarding an official veterinary surgeon and the identification of neurological symptoms. I have not been given the full details by my hon. Friend, and if the case that I refer to is not the one that he referred to, perhaps he will correct me.

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  My hon. Friend mentioned the case of a Spanish veterinary surgeon acting as an OVS at a slaughterhouse in Cornwall. The OVS was carrying out an ante-mortem inspection when she observed an animal exhibiting nervous signs. She sought advice from a senior colleague, the principal OVS. The principal OVS could not attend the slaughterhouse as she was some distance from it, and advised the OVS that she should seek the opinion of a Ministry veterinary officer. That officer attended the slaughterhouse, examined the animal and ruled out any suspicion of bovine spongiform encephalopathy.
  I can assure my hon. Friend that the correct procedures were followed and that any inexperienced veterinary surgeon would be expected to follow the same procedure in similar circumstances. It might be helpful if I say that, in the case of BSE, in about 20 to 25 per cent. of the animals which are slaughtered showing the clinical symptoms of BSE, it is only on post-mortem pathology that it is identified that the disease is of a different neurological kind.
  If I have referred to the case that my hon. Friend had in mind, I am reassured that the right procedures were followed. If it is not the same case, I would wish to take immediate steps to investigate the matter to which my hon. Friend referred.
  Sir Colin Shepherd: I am grateful to my hon. Friend for clarifying the matter, which was one that worried me. I was unable to arrive at the detail that my hon. Friend has presented to the House. My hon. Friend has set my mind at rest. Nevertheless, the importance of standards and the ability to recognise BSE symptoms are important.
  Mrs. Browning: Indeed. I think that my hon. Friend and I are at one.
  It is important that the public, too, have a right to expect the same high level of competence when their livestock or companion animals are treated by a veterinary surgeon, irrespective of his or her country of origin. In the single European market, a prerequisite for trade in animals and animal products is that consignments meet all the conditions of intra-Community trade. That is dependent upon properly completed and valid veterinary certification, to prevent the spread of disease and to protect the welfare of animals in transit.
  There have been occasional errors in veterinary certification. I can assure the House, however, that they have been taken up immediately with the member state concerned. The RCVS, the BVA and MAFF have drafted 12 principles of certification, which have been adopted by the Federation of Veterinarians in Europe, the FVE. The United Kingdom is pressing for harmonised EU standards of veterinary certification, based on these 12 principles.
  The regulatory body and competent authority for the veterinary profession in the United Kingdom is the Royal College of Veterinary Surgeons. Its council is constituted under section 1 of the Veterinary Surgeons Act 1966. It is comprised of elected members of the profession, members appointed by the six universities that provide veterinary training and members appointed by the Privy Council. As my hon. Friend mentioned, he is one such appointee and has been a member of the council of the RCVS since 1983. We are all grateful for the knowledge, experience and expertise that he brings to this debate and to many others.
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  In 1978, two European Community directives prescribed procedures for training in veterinary surgery and for the mutual recognition of qualifications in the EC, and provided for the freedom of movement and right of establishment of veterinary surgeons. The directives, which were implemented in the United Kingdom in 1980, require member states to allow any veterinary surgeon who has undergone the prescribed training and obtained a scheduled qualification to practise on any of their territories.
  The Advisory Committee on Veterinary Training was established by Council decision in 1978. Its task is to help to ensure a comparably high standard of veterinary training in the Community. As many of my predecessors in the Ministry of Agriculture, Fisheries and Food have said, we are most anxious for uniform, high standards to be applied throughout the Community and we think that the ACVT has an important role in carrying out that task by exchanging information on training methods and on the content, level and structure of theoretical and practical courses provided in member states.
  The ACVT includes three experts from each member state, one representing the practising profession, one from the veterinary science teaching institutions and one from the competent authority. It is supported secretarially and financially by the Commission. As an advisory committee, it can make only recommendations to the Commission, which holds the legal powers to ensure compliance with the veterinary training directives.
  In the United Kingdom, the Royal College of Veterinary Surgeons has a statutory duty to carry out visits to our veterinary schools to ensure uniform standards. Visits take place at regular intervals and the reports of those visits are discussed in an open forum at the RCVS council. The standards of UK veterinary training are therefore not at risk.
  In 1993, the Commission stated its intention to withdraw its financial and secretarial support for the system of visits to veterinary schools by the ACVT at the end of that year. That naturally caused considerable concern to the Royal College of Veterinary Surgeons and the British Veterinary Association. The Government shared that concern and the then Minister, my right hon. Friend who is now the Secretary of State for the Environment, instructed officials to enter into discussions with senior Commission officials in the hope that they would agree to support the ACVT.
  Later that year, MAFF officials and representatives from the Royal College of Veterinary Surgeons met the Director-General of DG XV to discuss their concerns. They were encouraged by that meeting to believe that the Commission was sympathetic to their arguments. In January 1994, the RCVS was informed by the Commission that it acknowledged the value of the present system and proposed that the responsibility for visiting should pass to the European Association of Establishments for Veterinary Education-that is, to the deans of veterinary schools, as mentioned by my hon. Friend.
  My right hon. Friend the Secretary of State for Education and Employment, the then Minister, together with senior veterinary officials, met the president of the Royal College of Veterinary Surgeons and his colleagues in February 1994. Following that meeting, she wrote to Commissioner Steichen expressing her concern that the

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  Commission was withdrawing support from the ACVT. Assurances were received from Commissioner Vanni that the Commission would continue to monitor the results of visits by the EAEVE and to receive the opinions and recommendations of the ACVT. I apologise, Mr. Deputy Speaker, but it is in the nature of my job to come across long names, which we try to abbreviate somewhat.
  The EAEVE visits are currently funded by a one-off grant from the Federation of Veterinarians in Europe and by the schools themselves, but I understand my hon. Friend's concern about funding and I shall deal with that question in a moment. A further approach was made to the Director-General of DG XV by our permanent representation in Brussels, asking the Commission to maintain direct support for the ACVT and its visitation programme. Unfortunately, the reply received indicated that further approaches were unlikely to bear fruit. Consequently, in further discussions with the RCVS by senior veterinary officials, it was agreed that the approach of the RCVS would now be to gain active support from other countries in the European Union through the FVE.
  The position has moved on somewhat since the speech by my noble Friend Lord Howe in another place, but I share my hon. Friend's frustration, and the Government and the RCVS are both still concerned about standards, and about how those standards are monitored and implemented. My hon. Friend mentioned the SLIM initiative, which the Commission is currently reviewing and which affects the legislation that covers the mutual recognition of professional qualifications.
  The United Kingdom has submitted a paper explaining the benefits of the sectoral committees, including the ACVT, because we consider it paramount that they be recognised, while suggesting possible improvements to their operation. My hon. Friend mentioned subsidiarity; the necessary definitions are still being discussed, and I share his concerns about that.
  Commissioner Monti will make proposals for simplification that have resulted from the SLIM review at the Internal Market Council in November. Once they are received and we can see what they comprise, the Government will discuss the proposals with the RCVS, because we think that it is important that its views be taken into account.
  The increased trade in animals and animal products as a result of the single market places increasing reliance on veterinary certification at the point of origin, as my hon. Friend said. That is a principle of the single market, and for it to be successful it is vital that satisfactory EU standards of veterinary education are maintained on an
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  international basis, and that a common understanding is developed and put into practice on the principles of certification.
  Previously, we have been assured that the Commission will continue to monitor the results of visits by the EAEVE and that member states will receive the recommendations and opinions of the ACVT on those visits. I share my hon. Friend's concern about the length of time that it has taken for the visits to be put in place and I assure him that we will maintain pressure to ensure that the proposed voluntary scheme for visits to veterinary schools in member states continues with a proper programme of visits and that, if deficiencies are identified, the Commission is pressed to take action, because only the Commission has the power to ensure that action follows inspection. My hon. Friend drew the parallel between the system of visits and inspection in state education. It is vital not only to inspect but to follow through when deficiencies are found.
  Sir Colin Shepherd: Some of the schools can still opt out of the visiting process by saying that they cannot afford it, so we have to maintain pressure on the schools concerned, especially on those that do not come up to the mark, and ensure that they cannot cop out on that basis. How is that to be done?
  Mrs. Browning: My hon. Friend makes an extremely good point. We shall certainly talk to the Commission about how that is to be effected, because it is clearly unacceptable for schools to opt out simply through lack of finance. I can assure my hon. Friend that I will investigate the matter and will pursue it as vigorously as possible.
  We await the proposals of the Commission for simplification as a result of the SLIM initiative with respect to mutual recognition of professional qualifications. We shall want to discuss that with the various bodies in the United Kingdom including, of course, the RCVS, but before we can agree to any proposal for change we would have to take into account the potential costs both to Europe and to the United Kingdom of inadequate standards of veterinary training. If the standards were inadequate, the possible cost would be unacceptable to many of us in the House. I am anxious that the House should be aware of our determination in the matter.
  The Government continue to support the Royal College of Veterinary Surgeons in its efforts to ensure the maintenance of high standards of veterinary education throughout the EU. Coincidentally, I have a meeting in my diary for three weeks' time with the RCVS and in view of the case made by my hon. Friend, I shall raise the matter with it then.

  Sports Academy
  1 pm
  Miss Kate Hoey: I am grateful to have the opportunity to raise the question of the British academy of sport when there is great uncertainty about its future. Time runs out at 12 o'clock tomorrow for the bids to own and run the academy. Some £100 million is on offer from the national lottery to guarantee sporting success but no one, even at this stage, knows how that success will be achieved and who for.
  The Minister has been economical, to say the least, with his vision. Since the academy was announced in "Raising the Game" in July 1995—the principle of the academy has been accepted and supported by the Labour party and, indeed, all parties for some time—the Minister has said very little. In a debate last year, the Minister said that bids would be invited after consultation. He continued:
  "They will be assessed by the Sports Council, which will announce its decision next summer."—[Official Report, 27 October 1995; Vol. 264, c. 1223.]
  It is now nearly November and not a single bid has even been opened. What has led to that delay?
  A potentially far-reaching proposal has been hindered by lack of clear direction from the Government. Even those closest to the idea—the bidders, the sports bodies, the centres of excellence and the coaches—are stumbling around in the dark. The Minister appears to be unable to get off the starting blocks and there has been indecision and uncertainty about how the academy will proceed. Just one day before the bids close, the British academy of sport is as unclear as the hereafter is to mortals. We all have a different image of paradise and that is how it is with the academy—everyone has an idea, but nobody has co-ordinated those ideas.
  The Government have spectacularly failed to supply the vision. Where have they laid out their view in any detail? Do they have a view of the details of the academy? The 56-page prospectus provokes more questions and concerns than it gives answers and reassurance. The sporting world is at a loss and is unsure whether any of the practical questions will be addressed. We all agree that we want an academy.
  Ownership of the academy will be in the hands of a new consortium and its remit will include the need to search for commercial viability. Does that mean that the new owners will have to turn to running ad hoc fitness regimes for middle managers to make money or to other non-sporting events to earn the cash? Will we see the academy hosting wedding receptions, for example? Surely the academy should be run by sport for sport and sport alone.
  One of the great unknown factors, which causes the most serious concerns, is who will pay the on-going revenue costs of running the academy. On a practical level, for example, who will pay for the young people to attend the academy on sponsorships? Will it be the academy itself or the governing body of the relevant sport? What will be the role of the young people's coaches? Will their personal coaches and mentors have a role to play? Who will pay the coaches and how will that be decided? What will be the role of local education authorities? Young people are the responsibility of the local education authority. Will the academy have the power to require athletes and sportsmen and women to
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  break the link with their local or regional clubs or the power to decide which events they participate in? Who will have priority in selection? That is especially important because of the vast sums of money involved in some sports and the ability and desire of athletes to decide where they will take part. Who will make that choice?
  The academy will, we are told, cover sports medicine, but we have had no clarification of how those medical services will be provided. Will the physiotherapy and pharmacy services be provided by the national health service or someone else? More important, what guarantee will there be that the home country sports councils will always co-operate with and participate in the financing of the academy? The royal charters give them independence, but what will happen if they choose to exercise that independence? In an article in The Times yesterday, David Miller wrote:
  "Sir Rodney Walker, the chairman of the England Sports Council … has said … that if the England Sports Council does not approve of the choice of academy site by the UK body, it will not allocate the £100 million of National Lottery funds that has been set aside for it."
  Will the Minister comment on that statement? After we have been through the whole process, will someone, somewhere, decide that they have a veto over the money?
  Incidentally, can the Minister tell us what the status of the English and the United Kingdom sports councils and their royal charters is at the moment? Why has the English Sports Council not met officially for a year? Why is it taking so long to get the financial memorandum sorted out? What confidence can we have in the future of the academy if the setting up of the UK Sports Council and its relationship with the other sports councils has still not been resolved? Surely we owe more to the new chief executive of the UK Sports Council, Howard Wells, and to the chairman, Sir Ian MacLaurin. They must be allowed to get on with the job and the problems must be sorted out quickly.
  The academy should be a linchpin in a strategy for success in British sport, but it will not succeed unless there is a clear structure, from primary schools to clubs to the national level, with bodies identifying talent and pushing it on to the next stage. Were the school sports associations specifically asked to contribute? We all want success, but of course we do not need muddle. If we are to take the country with us on an expensive academy, there is no room for muddle. Everybody needs to be aware of just what the academy can do for the individual youngster, boy or girl, who has the potential to succeed. The public must know that the academy can do something for such young people. We need much more clarity on the subject.
  A number of questions still have not been answered, but they are not new. The sports' governing bodies have been raising those questions with anyone and everyone for some time and I hope that the Minister will take this opportunity to answer them.
  Will the Minister also clarify his role in the set-up? How will the national sports recreation centres fit into the new plans? Are they being sidelined in any way? Surely all those issues should have been agreed with the relevant governing bodies before the prospectus was issued. The UK Sports Council, the governing bodies and the British Olympic Association will be crucial whichever bid wins. What will be the involvement of those bodies and why has the Minister not been able to secure more agreement on the proposals before starting the bidding process?

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  Will governing bodies lose their grants for elite training or will they be free to send competitors to train in camps overseas if that best suits their needs? Elite sport sounds glamorous, but it comes from the grass roots. It is long term and expensive and there are no guarantees. Many of our great champions get to the top despite rather than because of the system. Some people are critical of giving money to the excellent. All of us who care about sport believe that we must have excellence at the top, but the pyramid must be as wide as possible at the bottom. I am not clear about how those links will be achieved.
  The National Coaching Foundation should play a key role in the decisions on how the academy should be run. An article in the autumn edition of its newsletter was headed "Bricks and mortar, but too little vision?" It was critical of the fact that many of the proposals in the 56-page document are not clear. Bidders are not being given a clear direction in which to go. The Minister should explain how the details will work out in practice. We all want the academy to be established, but if bidders are not able to take account of the different factors, whoever wins will have to talk to sports bodies to ascertain the requirements of any particular sport. Much of that work could have been done already.
  Even though the Minister has slightly changed his mind about the use of a huge green-field, 200-acre site for the academy, the 56 pages of that document were based on the premise that it would still be a green-field site. Does the Minister accept that consultations with the sports governing bodies showed that there was no support for a large green-field site for the academy? We already have centres of expertise. We need a pinnacle—an administrative and co-ordination centre—but it must be in touch with what is happening in the regions.
  British sport wants success, but now more than ever it needs answers so that it can plan for the future. The Government have asked for bids, but their policy is not clear. Great interest was shown, but we will not know the final number of bidders until 12 o'clock tomorrow. Those bidders have been put in a difficult position, because they are being asked to provide the vision thing for the Government. The Minister should have made matters much clearer.
  I have left the Minister time to reply to my questions. If he is honest, he will accept that, since the original announcement, despite the prompting of my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry), we have been unable to obtain clarification of the position. There has been no debate in the country. If the average person in the street were asked what he thought of the academy and what it was all about, he would have no idea how it relates to him and his local community, and how it will benefit local youngsters with sporting talents and abilities. I hope that the Minister will give me some answers, but perhaps the hon. Member for Sheffield, Hallam (Sir I. Patnick) will say a few words first.
  1.13 pm
  Sir Irvine Patnick: I thank the hon. Member for Vauxhall (Miss Hoey) for that courtesy: I appreciate it. My hon. Friend the Member for Falmouth and Camborne (Mr. Coe), who was in the Chamber a moment ago, has done a lot for sport.
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  I want to put down a marker on behalf of Sheffield—the city in which I was born, where I live and work, and which I represent. It has not had the difficulty to which the hon. Lady referred, although I appreciate that she argued her case in great detail.
  Sheffield has produced a glossy prospectus, which states:
  "The Sheffield-based Academy will provide all the facilities, the resources and the services necessary to achieve gold medal performances. The city's concentration on sport over the past few years has provided much of the services, the knowledge and the expertise required, along with much of the infrastructure."
  It would be wrong if I did not mention the fact that many people associate Sheffield with something that went on many years ago. However, Sheffield now has major sporting facilities, and, along with many other cities, has submitted a bid. I am sure that the Minister, with his expertise, will consider that when making his decision. I hope that the academy will not be London based, but be situated somewhere in the provinces.
  1.14 pm
  The Minister of State, Department of National Heritage (Mr. Iain Sproat): I thank the hon. Member for Vauxhall (Miss Hoey) for raising this important subject, and for allowing my hon. Friend the Member for Sheffield, Hallam (Sir I. Patnick) to say a few words. He has done tremendous work to promote Sheffield, especially with regard to sport, and I am grateful to him for the advice that he has given me in the past few months on a range of sporting issues. I look forward to seeing the bid from the city that he so ably represents.
  On 14 July 1995, the Government published the policy document "Sport: Raising the Game", which sets out a wide range of proposals designed to rebuild the strength of every level of British sport. It highlighted three vital and linked elements of sports policy. The first was the need to restore sport and, particularly but not exclusively, competitive team games to the heart of school life. The second element was to extend the sporting culture by strengthening the two-way links between schools and local sports clubs. The final element was to ensure that talented competitors at every level received the support necessary to allow them to exploit their talents to the full—all the way to the Olympic podium.
  We therefore proposed the establishment of a British academy of sport that would aim to offer the highest standards in the world in sports science, sports medicine, coaching and training facilities. Moreover, the academy would be the pinnacle of a regional network of centres of sporting excellence and academies for individual sports, which would offer more locally accessible, high-quality training facilities and support services.
  We recognised that a world-class facility would not be cheap. However, the national lottery could provide the means for its achievement. The Prime Minister announced that up to £100 million of national lottery money could be available to help to fund the establishment of the academy.
  Why are we doing this? The approach of other countries has become increasingly professional. They have chosen to provide the very best facilities for their athletes, and so should we. To date, our athletes have done well, and some have excelled. They have made the most of the facilities that are already available. We want to

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  ensure that from now on our facilities are second to none. The aim of the academy will therefore be to help our athletes to compete with, and beat, the best in the test of the world.
  A key factor in the development of the Government's proposals for the British academy of sport, and for the regional network of facilities, was the insight that I gained from my many conversations with sports administrators, governing bodies and athletes and, not least, from my visit to Australia in January 1995. I saw for myself the Australian Institute of Sport in Canberra, which provides valuable lessons for our British academy of sport. I also saw and studied the New South Wales State Institute at Narrabeen and the South Australia State Institute in Adelaide, both of which provide valuable lessons for our regional institutes of sport. I saw and studied the Australian cricket academy at Port Henley, near Adelaide, and the Rugby League academy inside, as it were, the New South Wales State Institute at Narrabeen, both of which provide valuable lessons on how academies of individual sports that are owned and run by the governing bodies for those sports might work in this country.
  I do not want to copy everything that I saw in Australia, because the opportunities and problems there are different from those we have, but I pay tribute to what Australia has achieved. I have learnt a great deal from its excellent example.
  The policy document recognised that much of what is needed to help our sportsmen and sportswomen to develop to the highest level of achievement and sporting excellence is already in place. However, it is clear that we lack a vital asset for all national sport—a British academy of sport of world-class standards, and a coherent and unified programme to allow those with the greatest talent to use that talent to best effect.
  "Raising the Game" set out the Government's proposals. We want to ensure that the academy provides a range of services for sportsmen and sportswomen and, very importantly, their coaches—top-class training facilities; expert support services in sports science and sports medicine, including advice on training techniques, nutrition and sports injuries; good-quality accommodation for short or long-stay training camps or courses; financial support for individual athletes; access to local education facilities for long-stay students; personal development programmes; use of up-to-date laboratories; and advice and access to information using the latest audio-visual techniques. The academy will be a specialist centre for the training of coaches and those in the fields of sports science and sports medicine and also a centre of excellence in research and development.
  The British academy of sport will work co-operatively with the regional institutes of sport and sports-specific academies, although such regional institutes will not be owned or run by those who will own and run the British academy of sport—or if that were to happen, I should be surprised. Of course, there is nothing to stop people attempting to do that, but at the moment we are inviting bids only for the academy.
  The Government are not in the business of nationalising sport or overly centralising it. The regional institutes will offer locally accessible, high-quality sports training and facilities; high standards of sports science, medicine and coaching; links to the British academy of sport for sportsmen and sportswomen and their coaches; and scholarships and sponsorships for individual athletes.
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  The academies of particular sports—for example, the academy of cricket, the academy of rowing or the academy of cycling—will be run by the sport's governing body; provide coaching in technical skills in their particular sport at the highest level; make use, as appropriate, of the general facilities of the British academy of sport and the regional institutes; and offer scholarships and sponsorship for individual athletes.
  In December 1995, the Sports Council conducted a wide-ranging consultation exercise on the academy with the United Kingdom's top performers, coaches and administrators, to ensure that what is put in place will have a direct impact on performance on the world stage. Written responses were invited and 12 open meetings were held in different parts of the UK. Some 1,600 people attended the open meetings and about 600 written responses were received. The responses were analysed by an independent consultancy firm and confirmed wide support for the concept, set out in "Raising the Game", of the academy as the pinnacle of a network of regional institutes and academies for particular sports.
  In addition, there was overwhelming support for three key functions proposed for the academy: that it should be an integral part of the existing programme for the overall development of excellence in UK sport; that it should provide what is needed by different sports, their national governing bodies and their top-level performers; and that it should focus primarily, but not entirely, on the needs of top-level performers.
  On 24 July this year, just over a year after "Raising the Game" was published, the Department of National Heritage and the Sports Council jointly published the prospectus inviting bids to set up the British academy of sport. Tomorrow is the closing date for bids by different consortiums, typically comprising a couple of private sector companies, a local university, a local authority and a group of well-known sportsmen and sportswomen who might be the trustees of the charitable trust that will be set up to own and run the academy.
  The prospectus is based on the proposals set out in "Raising the Game" and conclusions reached following the consultation process. It contains details of how to draw up a bid which may, at a later stage, be eligible for funding from the national lottery. The prospectus sets out a number of principles for the academy, including the following: that the successful consortium will form itself into a charitable trust, which will run the academy in the interests of British sport as a whole; that it shall have the highest standards in sports facilities and services, including training, coaching, sports medicine and sports science and other relevant matters; that it shall work closely with other sports organisations and, in particular, with the new United Kingdom Sports Council—which I hope will get off the ground as soon as the lawyers can work out the difficult details—with regional sports institutes, academies for individual sports and other bodies involved in sports-related matters; that it shall be run primarily, but not exclusively, for elite athletes, including athletes with disabilities; that it shall provide residential accommodation; and that it shall provide scholarships for athletes and encourage other bodies to provide scholarships for athletes at the academy.
  What I intend to say next will answer many of the proper questions asked by the hon. Member for Vauxhall. Unfortunately, there will not be time to deal with all her questions, but if she so wishes I can respond to them in

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  writing. The essential point about the prospectus is that it is not intended to be rigidly prescriptive about what the academy should be in every detail. It is our expectation—from what I have heard about a number of the bids, it is an expectation about to be fulfilled—that bidders will come forward with their own innovative ideas, adding value to the original concept, on how the principles I set out earlier can best be achieved.
  The hon. Lady raised important matters, such as the arrangements with local schools for young athletes. For example, young girl gymnasts reach their prime earlier than other athletes, so they are likely to be at the academy at an early age and schools must be provided for them. Depending on where the winning bid is, the winning consortium will form relationships with local authorities, grant-maintained schools, independent schools or whatever. The precise details will depend on which consortium is declared the winner.
  We are dealing with unsealed bids. It may be that a consortium that we do not think will win will actually have a good idea that, with general agreement, we will mix and match with another bid. I do not want to say what the academy will be in every detail. From what I know already about the bids, people will come forward with good, innovative ideas which I do not want to shut out. That is why the prospectus is not intended to be rigidly prescriptive.
  The assessment process will be carried out by the new United Kingdom Sports Council and the Department of National Heritage. Once a decision has been reached, the successful organisation or a shortlist of organisations will be eligible to apply to the home country sports councils for funding from the national lottery. Because of the
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  possibility of an application for lottery funding, the home country sports councils will play no part in the evaluation process.
  Miss Hoey: I asked two specific questions which I would like the Minister to answer. The first relates to the charter of the home country sports councils. Is it possible that they will have a veto? Will the Minister talk us through how he thinks that will work? Secondly, will the hon. Gentleman clarify his role? What is his job in all this?
  Mr. Sproat: The hon. Lady raises an important point about the home country sports councils. The initial judgment on who we reckon is the best contender—there may be three contenders; it depends what happens with the lottery application—will be made by my Department and the United Kingdom Sports Council. The UK Sports Council, as the hon. Lady knows, has on its board the chairmen of all the home country sports councils, so their involvement and judgment are already involved. If I may mix metaphors, the process involves quite a fine Chinese wall, but I have every expectation that, given the fact that the British Olympic Association and each of the home country sports councils are represented on it, the UKSC recommendations will be generally acceptable to the sports world.
  As for my role, much of the vision, such as it is, is my own—getting sport back into the heart of schools and recognising the importance of identifying talent at an early age and fostering it through primary and secondary school, at county and under-21 level—
  Mr. Deputy Speaker (Mr. Michael Morris): Order. We shall now proceed to the next debate, on taxation of the racing industry.

  Racing Industry (Taxation)
  1.30 pm
  Mr. Richard Spring: I am grateful to you, Mr. Deputy Speaker, for giving me the opportunity to introduce this Adjournment debate this afternoon. I thank my hon. Friend the Exchequer Secretary to the Treasury for being here to reply. This is the first opportunity I have had to congratulate him formally on his new appointment—I know that he will perform the job with his characteristic panache.
  In 1668, King Charles II commissioned the construction of a palace at Newmarket. He was the first individual to establish racing stables in the town—the first proper racing and training establishment in the world. Today, Newmarket is synonymous with racing, which has developed there successfully for more than 300 years. I have the privilege to represent the town of Newmarket in this House.
  At the State Opening last week, the Sovereign came to the Palace of Westminster in a horse-drawn carriage. The horse has played a central role in our military past, and does so now in our pageantry. At the other end of the spectrum, millions of children have learnt to enjoy riding at pony clubs. Affection for this frail, beautiful and temperamental animal lies deep in the hearts of a wide cross-section of the British public.
  Out of all that has evolved the best-ordered racing and finest bloodstock industry in the world. Recently, the industry was threatened by the arrival of the single European market and by unbridgeable VAT differentials. In Newmarket, one in three people are directly or indirectly employed in racing. The potential damage to the town and to the industry in general would have been immeasurable had the battle on VAT been lost. I therefore express again my profound gratitude to the Treasury for facilitating the introduction of the VAT registration scheme. The arrival of Sunday racing also helped.
  Last year, in response to the impact of the national lottery, my right hon. and learned Friend the Chancellor cut general betting duty by 1 per cent. I express to my hon. Friend the Exchequer Secretary, on behalf of the industry and my constituents, my thanks for the Government's action, which showed their understanding and support for the industry. It is much appreciated.
  What is not clearly understood is the immense economic importance of the British horse racing and breeding industry. It directly employs 31,600 people; if we add all those employed in ancillary services and in on-course and off-course betting activities, the total figure is 100,000 people. Income generated by the industry is more than £600 million, with substantial additional sums being spent by race course visitors away from the course.
  It is estimated that exports total £90 million, and that tax revenues, excluding general betting duty, amount to £142 million. Training and breeding employ the equivalent of one in eight agricultural workers. We are therefore debating a highly significant employer and generator of wealth and of tax revenues.
  The linchpin, of course, is the race horse itself. It is a simple equation: there has to be some incentive to become and to remain a race horse owner. After the initial purchase price, the average training cost is now £13,700 per annum. Of course, there are those to whom such a
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  sum is insignificant, but they are a small minority. The industry's viability ultimately depends on a broad and deep base of race horse ownership. I have part-owned two race horses, so I speak from personal experience. The blunt truth is that, in Britain, the risk-reward ratio is, absolutely and relatively, disastrously unfavourable and worsening.
  It has become fashionable to produce international league tables. This country, for all its long history of racing and the industry's excellent reputation, is now increasingly in the relegation zone. Nothing could more graphically illustrate that than the fact that present or potential British race horse owners are simply voting with their feet.
  This week, the second biggest individual British race horse owner announced that he was substantially scaling back the number of horses he has in training, and others, in the past few days, have made similar depressing indications of intent. Indeed, the number of owners with horses in training has fallen since last year, and the number remains below the effective threshold necessary to develop a full race programme.
  One especially clear indication that the long-term health of the industry is under threat is the fact that ownership of the key two-year-olds in training is falling. The number has fallen 21 per cent. since 1988. and, tellingly, it has fallen almost 5 per cent. in the past 12 months. About 30 per cent. of owners drop out each year.
  The reason is simple: prize money in this country is now ludicrously low, even for our most famous races. The Derby is ranked only 21st in the world. Although £850,000 might seem a considerable sum, it pales into insignificance when compared with the Dubai cup, at £2.6 million, the Japan cup, at £2.5 million, and the United States Breeders cup, at £1.8 million.
  Some years ago, the Japanese sent shock waves through the art market by purchasing impressionist paintings for record prices; they are now doing exactly the same in respect of bloodstock, much of it originally British. Today, the average flat race in Japan is worth £170,000, whereas a similar race meeting here might offer prizes of about £5,000—a truly staggering differential. Every other sport, no matter how belatedly, has had to react to the finite life of its participants—even cricket has succumbed.
  Although owners contribute the vast bulk of racing's financial input, racing does not have direct control of its financial destiny. Out of 40 countries examined, Britain languishes joint 36th in the prize money league. Expressed as a percentage of keep and training costs, prize money per horse recovered in Britain is only 21 per cent. In Japan the rate stands at 95 per cent., in Hong Kong at 143 per cent and in the United States at 47 per cent: our European neighbours in Italy and France enjoy a rate of 49 per cent., and those in Germany a rate of 45 per cent.—all more than double the UK percentage. In any given year, only 6 per cent. of new owners and 6 per cent. of all active owners cover their costs.
  This autumn, Tattersalls in my constituency recorded some remarkable auction prices for bloodstock. There is no doubt that there is more optimism in the world industry. However, 75 per cent. of the turnover was due to foreign buying. Perversely, that will exacerbate the negative impact on Britain flowing from the greater internationalisation of racing. In 1991–95, the number of British-trained horses that won or were placed in overseas

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  race meetings increased by 57 per cent. Here, in the same period, foreign-trained entrants actually decreased by 20 per cent.
  With higher prices of quality bloodstock and our low prize money returns, those deteriorating trends will become worse. The warning signs are everywhere. Owners will be less motivated to race their horses here. Ultimately, that will affect fixture lists and crowd attendance, and therefore betting levels. It is a disturbing outlook. No other industry could be more aptly described as having flesh that is willing, but a spirit that is weak.
  At the heart of the industry's dilemma is the wholly inadequate return to racing from betting turnover, which is based on a complex system that in practice brings little stability and certainty. The percentage of horse race betting turnover returned to the industry in the United States is 8.9 per cent. In France it is 6 per cent., in Ireland it is 5.7 per cent., and in Germany it is fully 14.9 per cent. In Britain, it is a derisory 1.2 per cent.
  The very success of the national lottery has had a negative impact on racing's viability. Some months ago, the Home Office produced a publication called "The Impact of the National Lottery on the Horse Race Betting Levy". It started with a reminder that the Home Office had made a commitment to monitor the impact of the lottery on the levy. The levy board prize money contribution is expected to fall in 1996–97 by £2.7 million to £27.5 million.
  In May last year, a survey suggested that three quarters of betting shop customers purchase national lottery tickets, and that between 6 and 7 per cent. now stake less money in betting shops. In consequence, the Henley centre reported that betting office turnover was down by 3.2 per cent. in 1995, or 5.8 per cent. lower than it would have been without the national lottery.
  Happily, this year, following the Chancellor's most welcome I per cent. cut in general betting duty in the Budget, the situation has begun to stabilise. Turnover for the first six months of 1996 showed a small rise of 1.8 per cent. on the same period last year. However, the announcement by Camelot last week will effectively eliminate the benefits of the cut and abort any betting turnover recovery. Many hon. Members have greyhound stadiums in their constituencies, as I do, and their future is under a cloud, too.
  I have absolutely no quarrel with the introduction of the national lottery. On the contrary, it has produced significant sums for good causes, not least in my constituency. Its inception was long overdue, but it puts an onus on the Government to consider carefully its impact. Because of the lottery, there are 3,400 fewer jobs in the betting industry than would otherwise have been the case, and 4,000 jobs are in jeopardy. By Christmas, 650 betting offices will have closed, and another 1,300 are vulnerable. The second weekly draw probably makes those figures look like an underestimate. Fresh applications for betting office licences are at their lowest since legalisation 35 years ago.
  Betting shops should, at a minimum, be able to sell lottery tickets. Equally, there is a clear inconsistency whereby punters can bet on Irish lottery numbers but not on the outcome of our national lottery. General betting duty currently stands at 6.75 per cent., and the effective
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  rate of tax on horse racing is 30 per cent. Some interested parties have called for a cut to 5 per cent.; that would at least bring the effective tax rate down to 22 per cent., compared with the pools and lottery rate of 24 per cent. and the casino rate of 17 per cent.
  I have bombarded the Minister with a plethora of statistics. Last year, when Madam Speaker gave me permission to draw attention to this problem in an Adjournment debate, I painted a rather more impressionistic picture, but in the past 12 months, as these figures starkly show, the reality has become all too apparent. The help given by the Chancellor in last year's Budget of a 1 per cent. cut in general betting duty has, to all intents and purposes, been wiped out by the new, second weekly lottery draw. The figures I have presented spell out the severe impact that the national lottery is having and will have on the racing industry.
  Some weeks ago, the jockey Frankie Dettori won seven races in a row at Ascot, which resulted in one very happy and exuberant jockey and one infinitely richer punter. But it was also a magical moment for the whole nation—a nation which throughout its history has cherished the horse in whatever shape, size or form. At the top of this equine pyramid stands the British race horse, whose future, I fear, is at best uncertain.
  I fervently hope that a material cut in general betting duty can be effected on 26 November and that my right hon. and learned Friend the Chancellor will spell out specifically that there should be a clearly defined division between help to the punter and help to racing via the levy. The Minister of all people knows that this is a remarkably successful time in Britain, with the renaissance of so many skills and industries. Sadly, however, the racing industry is proving an exception and its position and world excellence is under real threat from forces that the industry itself simply cannot control.
  I appreciate that, at this time, my right hon. and hon. Friends at the Treasury are besieged with requests for special help. I hope that I have demonstrated that racing has an unassailable case that ought to be heard sympathetically. I earnestly beseech the Minister to give the matter his generous and urgent consideration.
  1.45 pm
  Mr. William McKelvey: The hon. Member for Bury St. Edmunds (Mr. Spring) makes a most eloquent and unanswerable case for assistance for an industry that he obviously knows well and loves. Perhaps I should declare an interest, because I wish to speak briefly on the greyhound industry. I am chair of the all-party greyhound group and was recently elected as a director of the British Greyhound Racing Board-unpaid, of course. I own and run greyhounds at Shawfield, and although they may not be as expensive to run as horses, I should not like to mention exactly what it costs me to run those three greyhounds, lest my wife reads Hansard some time.
  Greyhound racing, like horse racing, has had a difficult time this year. We have lost tracks at Cradley Heath, Ramsgate and Sittingbourne. Middlesbrough is due to close in November, and the threat of imminent closure hangs over Bolton, Canterbury and Hackney. The ground on which the greyhounds run is more valuable for other uses, and we must try to reverse that trend.
  The Gerald Eve report makes it clear that greyhound racing has already spent £6.6 million on safety measures, and still has to spend another £4.8 million and

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  £1.1 million a year to obtain certification under health and safety at grounds legislation. The greyhound industry, unlike the owners of football stadiums, has no additional help to meet the cost of those measures.
  Once again, the off-course betting industry is asking that a betting duty reduction should go straight to punters. A similar duty cut last year added £27 million to the profits of the betting industry, but that industry still refuses to pay £2 million per year to the British greyhound racing fund, because its contributions are designated by the Government as voluntary. We collect an average of only 65 per cent. of the possible tally that is due.
  What I would call the respectable bookies—the big firms such as Ladbroke, Hill and Coral—pay their share, although recently some of them have argued that they may resist paying unless they get their way in some of the fund meetings. The British Greyhound Racing Board seeks a reduction of 1 per cent. in the general betting duty, with the benefits of that reduction being passed to greyhound racing and horse racing. It also wants a statutory mechanism to ensure that all moneys that are intended to benefit greyhound racing are passed to the sport and do not form part of the betting industry's retained profits.
  I know that the Government say that they are a liberalising body, but unless we in the greyhound industry have the statutory requirement, bookmakers will resist paying the full amount of money due, and they can always threaten to withhold that fund unless they get their own way.
  The British Greyhound Racing Board has been unsuccessful in obtaining a meeting with the Minister and his assistants. May I ask him—I will write to him in any case—to give the board the opportunity for a brief meeting? I know that he has been given all the relevant articles, and I am sure that he has read and understood them, but it is important that such an important part of the racing industry receives the opportunity, just as the horse racing industry has done, for a meeting with him to explain the details of what we are asking.
  I am grateful for the opportunity for this short speech; this is an important issue for us in the greyhound racing industry.
  1.50 pm
  Sir Fergus Montgomery: I congratulate my hon. Friend the Member for Bury St. Edmunds (Mr. Spring) on raising this important issue. I must also declare an interest: I am a consultant to the National Association of Bookmakers Ltd.
  My hon. Friend's point is of great importance to bookmakers throughout Britain, because the yearly drop in the number of betting shops causes great concern. I am told that there are about 9,000 betting shops, whereas, in the late 1960s, after betting shops had been legalised, there were about 16,000. The betting industry is having great difficulty in sustaining a profit level. If it cannot sustain that level, there will be more betting shop closures and more job losses.
  My hon. Friend cited the example of Franco Dettori the other Saturday at Ascot, who went through the card and rode seven winners. That was phenomenal. A racing tipster studying all the form, receiving information and going through the card on any day happens once in a blue moon. For a jockey to have done that was incredible. I
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  cannot believe the number of people who apparently back every horse that Franco Dettori rides. Some people backed all seven horses, in all sorts of combinations and permutations, and won a great deal of money.
  The barber I go to in Victoria street does the horses, and he told me, in great rage, that he had backed only six of Franco Dettori's horses. The barber had spent about £5. If he had backed all seven, he would have won £15,000. Because he had backed only six, he won £2,000. I told him that, if I ever won £2,000, I would be grateful, because I had never won anything like £2,000 on the horses, the football pools, the national lottery, the premium bonds or anything. I can only think that I must be lucky in love.
  There is a need for a further cut in betting duty. My hon. Friend has stressed the concern over the proposed second weekly national lottery draw. The national lottery has had a devastating effect on the betting industry, but there is a simple solution, and I do not know why it has not been tried. It would help enormously if betting shops could sell tickets for the national lottery.
  I cannot understand why we cannot allow bookmakers to take bets on the national lottery. It is amazing that I can go into a betting shop, see the fact advertised that I can bet on the Irish national lottery, but not be able to put one on the United Kingdom national lottery. It does not make sense; if betting shops could sell tickets for the UK lottery, it would give bookmakers an enormous boost, and help to keep some of them in business.
  I am grateful for this chance to speak in the debate.
  1.53 pm
  Sir John Cope: I make little apology—but I do make a little one—for taking a little of the Minister's time, because the real reply to this debate will come on 26 November, from my right hon. and learned Friend the Chancellor of the Exchequer. I was the Treasury Minister involved in the VAT change to which my hon. Friend the Member for Bury St. Edmunds (Mr. Spring) referred, so I have an interest in the matter. I am chairman of a joint taxation committee of the British Horseracing Board, the British Horse Society and other equine interests.
  My hon. Friend has set out well what, in some respects, is a specialised example of the problems of globalisation in many other sectors, but when I was in the Treasury, we thought that it was important to preserve horse racing in Britain and to adjust the taxation system to achieve that end. Horse racing is something that we do extremely well. As he pointed out, it is of great economic importance and many jobs depend on it. It is in the national and, ultimately, in the Treasury's interest that my hon. Friend the Minister and his colleagues should consider carefully the arguments that have been advanced.
  1.54 pm
  The Exchequer Secretary to the Treasury (Mr. Phillip Oppenheim): May I first thank my hon. Friend the Member for Bury St. Edmunds (Mr. Spring) for his kind words? He is recognised in the House as a tireless and effective advocate for the horse racing industry. He said that he had made an unassailable case. I must warn him that that adjective has been somewhat devalued in not so distant years, but I catch his drift and agree that he made a strong case.

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  I also thank my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery), my right hon. Friend the Member for Northavon (Sir J. Cope), my predecessor, in a manner of speaking, and the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey). I should be delighted to meet the British Greyhound Racing Board. I am just about old enough to remember when dogs ran at Stamford Bridge when I was a child, so I have a particular love for that industry.
  I acknowledge the importance of the racing industry, in all its various forms, in our national life. It is an intrinsic, colourful and particularly beautiful part of our national life. It is important and has been a success.
  I am grateful for the acknowledgment by my hon. Friend the Member for Bury St. Edmunds of what the Government have done in recent years. The allowance for owners to register for and to reclaim VAT has been important. The duty cut in the last Budget has been mentioned, and the deregulation of betting shops, which can now open on Sundays and weekends, has also been important. Many of the points that have been made have been put to me in representations from the British Horseracing Board and other parts of the betting industry.
  I want to touch briefly—to the extent that I may—on the points made about the national lottery's impact. I hope that hon. Members will understand the limitations on what I can say, because this is primarily the responsibility of my right hon. Friend the Secretary of State for National Heritage. I am aware of the many arguments that the lottery has been given special privileges, and that it unfairly distorts a sector of the economy. I think that everyone acknowledges the money that has been given to good causes as a result of the lottery, but, at the same time, it has created a large vested interest.
  There are also people who say that a Government who believe in open markets and free choice should perhaps be more sympathetic to allowing the laying of bets on lottery results. The anomaly has been raised that it is legal to take bets on the Irish lottery, but not our own. I merely report those views rather than endorse them, because, as I hope my hon. Friends understand, the difficulty of my position is that I am not directly responsible for that sector, but I hope that the Secretary of State for National Heritage will carefully consider hon. Members' points on those issues.
  I hope that the House will understand that, with the Budget only four weeks away, there is little more that I can say, but I assure hon. Members on both sides of the House that their comments will be taken into careful consideration in the run-up to the Budget.
  It being three minutes to 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.

  BILLS PRESENTED
  CITY OF EDINBURGH COUNCIL ORDER CONFIRMATION
  Mr. Secretary Forsyth presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to City of Edinburgh Council: And the same was read the First time; and ordered to be read a Second time upon Tuesday 5 November and to be printed. [Bill 4.]
  EDINBURGH MERCHANT COMPANY ORDER CONFIRMATION
  Mr. Secretary Forsyth presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Edinburgh Merchant Company: And the same was read the First time; and ordered to be read a Second time upon Tuesday 5 November and to be printed. [Bill 6.]

Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS

    Kashmir (British Hostages)
    Mr. Simpson: To ask the Secretary of State for Foreign and Commonwealth Affairs when was the last time that direct information was received about the condition of the British hostages in Kashmir; and if he will make a statement. [683]
    The Minister of State, Foreign and Commonwealth Office (Sir Nicholas Bonsor): I apologise for the absence of my right hon. and learned Friend the Foreign Secretary, who is accompanying Her Majesty the Queen on the state visit to Thailand.
    We are deeply concerned about Keith Mangan and Paul Wells. The last proof of life we received was on 29 August 1995. We continue to work closely with all the countries concerned, in a joint attempt to find the kidnap victims.
    Mr. Simpson: This is the 485th day that my constituents, Paul Wells and Keith Mangan, have been in captivity. Will the Minister explain why, in all that time, no Minister has come before the House to give us a detailed statement on the Government's knowledge on the hostages' state of health or state of existence? Why has no information been given to the House about the organisations with which the Government are working, about the nature of their contacts with the Kashmiri community and about the specific action that is being taken to secure the hostages' prompt release? Will the Minister assure us that—before the hostages reach an anniversary of 500 days in captivity—a Minister will come before the House to give us an opportunity to know in detail what the Government are doing to secure the hostages' safe release?
    Sir Nicholas Bonsor: I am extremely surprised to hear those comments from the hon. Gentleman. My office has made every effort to keep him fully informed of our efforts to find out about, and, we hope, obtain the release of, the hostages. It would not help the hostages if we were to release all the information available to us. I have told the hon. Gentleman and the House that we have had no proof of life since August 1995. We are making every effort—with other members of the G4, our allies—to find the hostages. We have kept constantly in touch with the families, who know absolutely what the Government are doing. We are working to the best of our abilities with America, Germany and Norway to find the hostages, and the hon. Gentleman is being extremely unfair if he is implying that there is something that we should be doing that we are not doing. It is open to him, or to anyone else who has a suggestion, to make it.
    Mr. Devlin: I thank my hon. Friend for that suggestion, because there is a feeling on Teesside that Keith Mangan has been neglected. Although I know that my hon. Friend and his colleagues have made great efforts to keep me informed of the efforts that are being made in Kashmir—for which the Mangan family and I are deeply grateful—
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    the public perception is increasingly that more could be done. Now that we have reached the 485th day, I should very much welcome an opportunity to visit the Minister and his officials to discuss specific measures—before we reach the two-year mark, when it will be even more difficult to find those people.
    Sir Nicholas Bonsor: My right hon. Friend the Minister of State has frequently been in touch with the families, and my hon. Friend the Under-Secretary met them last week in India. There is no question of any members of either family being unaware of the Government's efforts. We keep in touch with them arid listen carefully to what they have to say to us. We have also kept my hon. Friend the Member for Stockton, South (Mr. Devlin) fully informed. If he wishes to come to see me or any of my ministerial colleagues, as he knows, our doors are always open.
    Mr. Madden: Will the Minister confirm that well-known Kashmiri political leaders have condemned hostage taking and have demanded the immediate release of hostages alive and well? Those concerns have been reinforced by numerous public demonstrations by the people of Kashmir against hostage taking. Will the Minister explain why several offers by Kashmiri political leaders to mediate and to attempt to locate the hostages have not been taken up?
    Sir Nicholas Bonsor: I am not aware that any such offer that could be taken seriously has not been taken up. The Government are in close contact with Kashmiri leaders. We have had unsubstantiated reports of sightings of the hostages. We have also had unsubstantiated reports of their death. It is difficult to get to the truth in that troubled province of India. We have made every effort to find the hostages and we shall continue to do so.

    Cyprus
    Sir Sydney Chapman: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Government's initiatives in respect of ending the partition of Cyprus. [684]
    The Minister of State, Foreign and Commonwealth Office (Mr. David Davis): We are working closely with the United States, our European Union partners and others in support of the United Nations-led effort to achieve a political settlement. My right hon. and learned Friend the Foreign Secretary has appointed Sir David Hannay as the British Government's special representative for Cyprus. My right hon. and learned Friend plans to visit Cyprus before Christmas for talks with both leaders.
    Sir Sydney Chapman: I welcome what my hon. Friend has said. It is clear in retrospect that the partition of Cyprus after the invasion by Turkey 22 years ago should not have been tolerated. Will the Minister give an assurance that the United Kingdom Government, as a co-guarantor, the United Nations, the European Union and the United States will make the reunification of Cyprus the top international political priority in the coming 12 months?
    Mr. Davis: We take our duties as a co-guarantor seriously. Our appointment of Sir David Hannay and the

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    visit of my right hon. and learned Friend the Foreign Secretary—the first bilateral visit of a Minister to Cyprus for decades—show how seriously we take the issue. Although the task will be incredibly difficult, there may be an opportunity in the coming year.
    Mr. Cox: The House will welcome the forthcoming visit to Cyprus of the Foreign Secretary. Will his discussions with Mr. Denktas centre on the return of Famagusta-something that, as the Minister knows, has long been promised but has sadly never happened?
    Mr. Davis: I am sure that my right hon. and learned Friend will focus on every issue relating to making Cyprus a single country again, guided by the ideas of the United Nations Secretary-General. I am sure that all those matters will be in front of him when he sees Mr. Denktas and Mr. Klerides.
    Mr. Waterson: Does my hon. Friend agree that, when Cyprus accedes to membership of the European Union, it would be preferable if it did so as a whole island which was no longer partitioned? Will he also confirm that no party has a right of veto over the accession negotiations moving forward?
    Mr. Davis: My right hon. and learned Friend the Foreign Secretary said last week that it would be much more difficult to arrange entry to the European Union for a divided Cyprus. Reunification is therefore clearly desirable for that reason, but it is also desirable for its own sake to return Cyprus to what the United Nations Secretary-General has described as a bizonal, bicommunal federation. Every effort will go into that. My hon. Friend is right that, in maintaining that policy, we must ensure that no party has a veto
    Mr. Trimble: I welcome the fact that the Foreign Secretary, on his visit to Cyprus, is for the first time to meet the leader of the Turkish Cypriot community. It is right that the two communities in Cyprus should be treated equally. I urge the Minister to persuade our colleagues in the European Community to afford them similar status and to ensure that the European Community is not used by the Greek Cypriot community in Cyprus as a tool with which to beat the Turkish Cypriots.
    Mr. Davis: We have always made balanced contacts with both communities without, of course, recognising the Turkish Republic of Northern Cyprus; we recognise the proper Government of Cyprus and will continue to do so. We shall do everything possible to ensure that the European Union does everything in its power to bring that divided country together again.

    Middle East Peace Process
    Mr. Batiste: To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the progress of the middle east peace process. [685]
    The Minister of State, Foreign and Commonwealth Office (Mr. Jeremy Hanley): Redeployment from Hebron was scheduled for the end of March in the interim agreement. Both sides must abide by commitments under
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    the interim agreement. Prime Minister Netanyahu and President Arafat have both said they will do so. Concrete steps are necessary soon or there is a risk of the peace process slipping backwards. We also wish to see the reopening of the Syrian track.
    Mr. Batiste: Does my right hon. Friend agree that, since the democratic process produced a change of Government in Israel, all parties have had to adjust to changes in priorities and in the nuances with which they approach the peace process? Nevertheless, is he satisfied that all parties remain committed to its success? What steps have the British Government taken since the House rose in the summer to assist that process?
    Mr. Hanley: I agree with my hon. Friend that, in the time scale following elections, such as those in Israel, one may need to reflect. However, agreements such as the one on Hebron have already been made between the parties. They have agreed not just that Hebron should be returned, but on the other outstanding elements of the Oslo accords: redeployment from areas B and C, the rural west bank; the release of Palestinian prisoners; and free passage between the west bank and Gaza. Those are issues that have been agreed, and although I understand that the security situation changes from day to day and needs to be addressed seriously, we also need to see progress very soon.
    Mr. Kaufman: I congratulate the Minister on the reply that he has just given. Does he agree that, amid all the discourtesies and incompetences that accompanied President Chirac's visit to Israel and to Palestine, it was somewhat curious that the Israeli regime was willing to accept European Union aid, but not to accept a European Union role in the peace process? Taking into account the fact that, as the Minister has pointed out, those agreements are international, ought it not to be pointed out to the Israeli regime that, if it accepts international aid, it should also pay attention to international views on an international agreement?
    Mr. Hanley: The European Union is the largest aid donor to the Palestinians and we favour a strong European Union role supporting the peace process. We are ready to play an active part, commensurate with the scale of European Union interests and economic support for the peace process. That is why we welcome the decision to appoint Ambassador Moratinos as the European Union's special envoy. That will help the European Union to have a stronger role within the peace process. The mandate makes it clear that there is no intention to cut across the mediation role of the United States, but that we should support and complement the United States' role.
    I say to my hon. Friend the Member for Elmet (Mr. Batiste) that Britain has taken a very firm line with the European Union and with the United Nations, as my right hon. and learned Friend the Foreign Secretary made clear in his recent speech to the United Nations General Assembly. It is important that the international community works together to bolster the peace process. There is nothing inconsistent in President Chirac's visit—it was clearly part of an attempt which has been co-ordinated with actions by allies, such as the visit by my right hon. and learned Friend to Israel next week.
    Sir Mark Lennox-Boyd: Does my right hon. Friend agree that, in the light of the Israeli Government's

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    extraordinary and unacceptable pursuit of the peace process, a visit by any British Foreign Secretary to Jerusalem gives the opportunity for a visit to Orient house, and that our right hon. and learned Friend should be strongly urged to make such a visit because, by doing so, he would send a message without having to use offensive language, which would offend him as our foremost diplomat?
    Mr. Hanley: My right hon. and learned Friend's decision not to visit Orient house next week is in line with European Union policy that short working visits need not include a call on Orient house. That in no way changes our firm policy that visits are important in maintaining the European Union position of principle on Jerusalem. I paid a longer visit to Israel earlier this year and I called on Orient house. That was completely consistent with the European Union position, as is the action of my right hon. and learned Friend.
    Mr. Menzies Campbell: Last week, the Secretary of State told the House that he would not indulge in megaphone diplomacy when he visited the middle east, and that, I think, gained general acceptance throughout the House. Notwithstanding that, may we have an undertaking that he will pursue robustly the case against any further settlements in the occupied territories, not least because they are extremely provocative and they provide ready fuel for fundamentalist action?
    Mr. Hanley: Those who know my right hon. and learned Friend know that he needs no megaphone, nor will he seek to use one in the way that the hon. and learned Gentleman suggests. He will state firmly to the Israelis our position on Israeli settlements in the occupied territories. Under the fourth Geneva convention, all settlements in the occupied territories are illegal and an obstacle to peace. We have regularly raised that issue with the Israeli Government and the expansion of settlements can prejudice the final status talks. My right hon. and learned Friend will make that clear.
    Sir Timothy Sainsbury: Does my right hon. Friend agree that successful economic co-operation between Israel and her neighbours, including the Palestine entity, is an effective way of progressing and strengthening the peace process? Will he therefore consider the obstacles that exist to the use of public or private finance from the United Kingdom and the United Kingdom's considerable expertise to help that economic co-operation? For example, there are a number of obstacles which he might like to discuss with his right hon. and hon. Friends at the Department of Trade and Industry.
    Mr. Hanley: Yes, I thoroughly agree that trade can help to underpin the peace process. I have said before in the Chamber that a prosperous Palestine is a peaceful Palestine, and there is no doubt that a prosperous Israel, which is self-confident, with the freedom to trade with its neighbours and beyond, is an Israel which will maintain the peace. Trade relations between our two countries have increased greatly during the past three or four years and it would be tragic if any reduction of effort or reversal in the peace process caused a reversal in economic relations, which are so valuable to all people within the region.
    Mr. Robin Cook: The Minister will be aware that I visited Hebron and Orient house last month. Anyone who
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    has seen Hebron must be aware that there can be no peace progress so long as a city of 100,000 Palestinians is dominated by the presence of Israeli military and by road blocks around the city centre. In view of the question of the hon. Member for Elmet (Mr. Batiste), will the right hon. Gentleman confirm that the Oslo accords have the status of an international treaty and are binding on the new Government of Israel, who must now honour the commitment to withdraw the military occupation of Hebron? Finally, will he press the new Israeli Government to recognise that their legitimate aim of peace with security for Israelis can be achieved only on the basis of peace with justice for Palestinians?
    Mr. Hanley: I agree with every word that the right hon. Gentleman has said. He is absolutely right about Hebron. Unless there is a solution there before long, there will be no peace. It is the next step, but other steps clearly must follow. The right hon. Gentleman is absolutely right to say that the Israelis and any Government of the Israelis must make security a priority. It is vital for them. They must take that into account. That is why we urge restraint upon all those who might be tempted to loosen their tempers in reaction to what has happened during the last few weeks and months. Remarkable restraint is being shown. Therefore, the right hon. Gentleman is correct.
    The Oslo accords have been agreed by the parties. Prime Minister Netanyahu told my right hon. Friend the Prime Minister that he would stand by the Oslo accords—by any agreement that had been signed by Israel. I believe that he means what he says.
    Mr. Cyril D. Townsend: Has my right hon. Friend made any representation to the Israeli authorities, perhaps through our excellent consul general in Jerusalem, over the recent killing of a Palestinian youth who was throwing stones at an Israeli settler? Is it not extremely important that justice should be done in such a situation? Is he aware that the settlers, who are armed to the teeth, frequently behave in an offensive and ridiculous way?
    Mr. Hanley: I agree with my hon. Friend about that tragic action. Indeed, I regret the death of anyone in that area. I regret, too, the deaths of two Israeli soldiers in the past couple of days in south Lebanon. I regret any death. We must have peace. I admire those who do not over-react or even react in anger to such tragic actions. We need calm, peace and justice. My hon. Friend is right: justice should flow from that tragic act.

    Intergovernmental Conference
    Mr. Charles Kennedy: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress within the intergovernmental conference. [686]
    Mr. David Davis: The intergovernmental conference is progressing extremely well.
    Mr. Kennedy: I am sure that hon. Members from all parts of the House will warmly welcome such an upbeat assessment. Will the Minister clarify the Government's position in one respect? We have heard the recent contributions from France and Germany and the comments of the Foreign Secretary. If, as seems likely, a

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    federal core involving Germany and France develops for the purposes of deepening integration, what will be the Government's stance towards such a development? Will their stance be to stand to one side and wave it through but not to participate, or to stand in the way and block it? What will be the approach?
    Mr. Davis: The hon. Gentleman will have heard my right hon. and learned Friend the Foreign Secretary place the formula of the Government's policy before the House last week—that is, any proposal for flexibility must in its implementation be agreed by all and open to all. That means that any proposal can be assessed in terms of its impact on Britain's national interest at the time. That decision can be taken with respect to general or detailed proposals.
    Mr. Harris: When does my hon. Friend expect the intergovernmental conference to consider the important amendments that the Government have tabled to the treaty to deal with the scourge of quota hopping? What support have the Government received from other member states to see that that practice, which is wrecking our fishing industry, is put to an end?
    Mr. Davis: My hon. Friend raises a matter of considerable importance to the entire country and especially his part of the country. We have raised the matter with the Union and tabled our proposals. We have made it clear that we require those proposals to be discussed and debated fully, and that will probably occur towards the end of this year or early next year. It must be done well before the end of the conference so that—to answer the second part of my hon. Friend's question—we can get a clear idea of how much support we have and of what detailed argument there is in any direction. The argument will be conducted in detail and in parallel with discussions outside the IGC, which also may yield results.
    Mr. Watson: What is the Government's attitude to the Swedish Government's proposed amendment with regard to convergence for economic and monetary union? It is proposed that an employment chapter should be added to the Maastricht treaty. The United Kingdom Government are almost alone in opposing that suggestion. Will the Minister explain why they do not consider it important for the intergovernmental conference to deal with protection for jobs, and why once again they are swimming against the tide in Europe?
    Mr. Davis: The hon. Gentleman is wrong to say "almost alone". The first comment I heard on that matter came from the reflection group, in the form of a cryptic remark from a member of that group who said, "Oh my God! Not reconstructed Keynesianism again." The fact is that a number of countries are concerned about that proposal, for a simple reason. The Labour party has clearly not yet learnt that jobs are created not by Governments but by businesses and individuals. The job of government is to make it easier for that to happen—not harder by increasing bureaucracy.
    Mr. Bernard Jenkin: I thank my hon. Friend for being careful about the doctrine of flexibility. The danger, surely, is that if other countries proceed with a federal Europe, we may find them hijacking the European
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    institutions in whose jurisdiction we are included, so we are in danger of being dragged along in the slipstream of federalism unless we provide ourselves with adequate protections for the sovereignty of this kingdom.
    Mr. Davis: My hon. Friend is right. That is precisely the sort of argument, both detailed and general, that will apply when any practical proposal on flexibility comes up. It will apply not just in terms of the IGC but, if we decide on a flexible outcome, at each stage thereafter. It is only at those stages that we shall be able to assess the effects of a smaller group's actions both for that group and for the Union at large and the countries outside the group. It is critical not to lose sight of that point.

    Sudan
    Mr. Flynn: To ask the Secretary of State for Foreign and Commonwealth Affairs what contacts he has made recently with the Government of Sudan on the war there. [687]
    Mr. Hanley: I discussed the continuing civil war with the Sudanese ambassador on 2 July.
    We are in frequent touch with the various parties to the conflict and consistently tell them we look to all sides in the Sudanese civil war to make genuine moves towards peace.
    Mr. Flynn: Will the Minister recognise the work of human rights campaigner Rev. Richard Rodgers, who is fasting at this moment outside the Foreign Office to draw attention to this war, which has received very little attention—possibly because the television cameras have not witnessed the dreadful events of that war, including flagrant abuses of human rights, tens of thousands of deaths and possible attempted genocide? Is this not the right moment for Britain to use her good standing and reputation with both sides, as a post-colonial power, and to act as an honest broker by intervening to bring the conflict to a peaceful end?
    Mr. Hanley: I thank the hon. Gentleman for mentioning the work of Dr. Rodgers, of Light and Hope for Sudan. I was pleased to ask him to come and discuss his proposal with me on the 10th of this month. We had a good discussion and I asked officials to follow up his ideas with him.
    However, I must admit that, despite the excellent work of our ambassador in Khartoum, Alan Goulty, and the work of officials and others—including my noble Friend the Minister for Overseas Development, who has been in discussion with the parties—we do not believe this to be the right time to introduce a British initiative. We do not think it would be fruitful at the moment. We look for greater progress between the parties. If both sides ask us to undertake such an initiative, we shall of course willingly consider it.
    Mr. Rowe: Does my right hon. Friend have any advice for the growing number of hon. Members in this place and the other place, including the Archbishop of Canterbury, who are increasingly anxious about the

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    effects of the war on southern Sudan and who wash to give him effective assistance in the difficult task that he has to undertake?
    Mr. Hanley: My hon. Friend is absolutely righi. We are of course gravely concerned about southern Sudan. The United Kingdom, after all, is one of the largest bilateral donors of emergency aid. We have committed more than £95 million, which includes the United Kingdom's share of EC food aid to Sudan and Sudanese refugees, since 1991. The bulk of that aid is distributed through non-governmental organisations and the UN operation Lifeline, in the south. We continue to call on the Sudanese Government not to obstruct their excellent work.

    Intergovernmental Conference
    Mr. Betts: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the timetable for the intergovernmental conference. [688]
    Mr. David Davis: The intergovernmental conference is expected to conclude in mid-1997. This objective was agreed at the Special European Council in Dublin on 5 October.
    Mr. Betts: Is the Minister aware of a recent survey by the Institute of Management which showed that 68 per cent. of United Kingdom managers feel that the Government's policies have weakened the United Kingdom's position in Europe and that 56 per cent. of those managers believe that, as a result, we need a change of Government? As well as setting a timetable for the IGC, should not the Government also set a timetable for the general election to give the British people and British managers the chance to vote for a Labour Government who will be willing to give this country a new start in Europe?
    Mr. Davis: The most terrible timetable this country could face would be under a Labour Government, when we would see the shortest and fastest loss of sovereignty that the country has faced in many years.
    Mr. Cash: Will my hon. Friend take the opportunity to rule out a single currency before the Labour party does so, in line with the comments made by the shadow Foreign Secretary during the "On the Record" programme last weekend?
    Mr. Davis: I was a Maastricht Whip for too long to get sucked into the Labour party's problems.
    Mr. Robin Cook: I congratulate the Minister on having at least reached an agreement that the IGC should end by mid-1997. It is one of his few areas of agreement and he has been able to reach it only because he does not expect to be in office in mid-1997. Can the hon. Gentleman enlighten the House about the timetable for ending the beef ban? Does he recall the Prime Minister telling the House that a start would be made on lifting the ban by October and that most of the ban would be lifted by November? Will the Minister confirm that tomorrow is the last day of October and that Ministers now have no
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    idea when the ban will be lifted because they have broken the commitments they made in Florence and the promises they made to British farmers?
    Mr. Davis: I congratulate the right hon. Gentleman on his optimism, if nothing else. The Prime Minister made clear yesterday the position about Florence; I was there, so I remember it too. The decision at Florence was to make any moves on the basis of the best science available. No doubt the right hon. Gentleman has read the Anderson report on the BSE epidemic and how long it will be before it is complete. That is the best science available. When the right hon. Gentleman has read that report, I will talk to him again about the timetable before us.
    Mr. Forman: In the context of the IGC timetable, is my hon. Friend aware that many Conservative Members, from different points of view, believe that the Franco-German idea of a flexibility pact, in whatever form, would be dangerous to the interests of this country and would be a snare and a delusion from the British point of view? I make that comment because it would deprive us of the leverage that we now have in prospect of using our national veto on all those important constitutional issues where we want the principle of subsidiarity to work and we do not want to see further creeping European competence.
    Mr. Davis: I could not agree more with my hon. Friend. Two years ago, the Prime Minister made a speech at Leiden talking about variable geometry and flexibility. He did not have in mind the idea of creating some sidestep around the British veto, particularly on constitutional matters, which will change things for all time in the relationship between Europe and its constituent countries. I agree with everything that my hon. Friend said.

    Sir James Goldsmith
    Mr. Campbell-Savours: To ask the Secretary of State for Foreign and Commonwealth Affairs on what dates in the past 18 months Government Ministers met Sir James Goldsmith in their official capacity to discuss matters relating to a referendum. [689]
    Mr. David Davis: None, Madam Speaker.
    Mr. Campbell-Savours: This is intended to be a helpful question. Is there nothing that the Government can do to appease further Sir James Goldsmith's escalating demands? Is there not something more that they could concede?
    Mr. Davis: I have a great fondness for the hon. Gentleman—he and I met frequently in the past at various human rights meetings—so I shall be more charitable than I might otherwise be. However, he has not yet listed any concessions that we have made.
    Mr. Marlow: On the subject of referendums, am I right in believing that the general election result would not be sufficient for a Conservative Government to seek to enter a single currency in the next Parliament, whereas that is not the case for the Labour party? If the Labour party won the election—which God forbid—it might think that that would be sufficient and adequate instruction from the

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    British people to join a single currency. Is there not, therefore, a great deal of clear blue water between ourselves and the Labour party?
    Mr. Davis: My hon. Friend is right, certainly in one respect. We are the real referendum party in the House. The muddle in the Labour party has been the most confusing thing that the British public have seen in the past couple of days.
    Ms Quin: Can the Minister give us a little more information about the contact between the Foreign Office team and Sir James Goldsmith? I understand that the Minister of State, Foreign and Commonwealth Office, the right hon. Member for Richmond and Barnes (Mr. Hanley), has been targeted by the Referendum party at the next election and that the Minister of State, Foreign and Commonwealth Office, the hon. Member for Boothferry (Mr. Davis), was reported to have been involved in discussions with Sir James, and we know that the Minister of State, Foreign and Commonwealth Office, the hon. Member for Upminster (Sir N. Bonsor), was sharpening his Euro-sceptic credentials in the summer with his attack on the Chancellor of the Exchequer. Is not the Foreign Office team of Ministers a vivid microcosm of the huge split on Europe in the Tory party? How does the Foreign Secretary intend to hold his warring Ministers together?
    Mr. Davis: I suppose that there could be a problem if a single fact that the hon. Lady has stated were true. I have had no contact with Sir James Goldsmith and I have no such intention now or in the future.

    Hong Kong
    Mr. Tredinnick: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the Governor of Hong Kong to discuss arrangements for transition; and if he will make a statement. [690]
    Mr. Hanley: My right hon. and learned Friend the Foreign Secretary and I met the Governor of Hong Kong on 21 October. We noted that there had been useful progress this year in our exchanges with the Chinese on transitional issues.
    Mr. Tredinnick: Does my right hon. Friend agree that five years ago few would have predicted the phenomenal success of the economy of Hong Kong? Does not that success and the stability that Governor Patten has created mean that we shall be handing over the colony in very good shape next July? Is not one outstanding issue the 4,000 stateless British nationals? Does my right hon. Friend have any plans to review their position, given that some of them have served the British Crown for 30 years or more?
    Mr. Hanley: I agree entirely with the first part of my hon. Friend's question. Five years ago, when the Hang Seng stood at about 4,000, few would have envisaged that it would now be 300 per cent. higher—in the 12,000s. That is a great sign of confidence among the international business community in Hong Kong—present and future. We should be grateful to the Governor for his work in helping to create the Hong Kong that we wish to continue.
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    As for ethnic minorities, my right hon. Friend the Prime Minister announced in Hong Kong that we shall guarantee to British nationals admission and settlement in Britain in the unlikely event that they are under pressure to leave Hong Kong after the transfer of sovereignty.
    I should make it clear to my hon. Friend that no member of that community will be stateless after the transfer of sovereignty. They can apply for British national overseas passports before 1 July 1997. If they do not, and would otherwise be stateless, they will automatically become British overseas citizens. Moreover, their position in Hong Kong is secure. The Joint Declaration and the Basic Law guarantee them the right of abode in the special administrative region after handover.
    Mr. Faulds: Why have the Government allowed the Governor to wreck the through-train arrangements that had been earlier agreed?
    Mr. Hanley: The Governor has helped to create modern Hong Kong. His popularity there is quite remarkable. He continues to do an outstanding job and he enjoys enviable support in Hong Kong. His approval rating is now more than two thirds. That is pretty high by any standards in any country in the world. We have made substantial advances with the Chinese over the past two years on a wide range of transitional issues against a background of an improving Sino-British relationship and intensified ministerial contact. Therefore, I do not believe that the effect that the hon. Gentleman gives to the so-called through train is valid.
    Sir Patrick Cormack: May I revert to the matter of the 4,000 people to whom my hon. Friend the Member for Bosworth (Mr. Tredinnick) referred? Does my right hon. Friend accept that no gesture that the British Government can make between now and 30 June will be more greatly appreciated in Hong Kong? Therefore, will he think again?
    Mr. Hanley: There is no change in the Government's position. I have mentioned that my right hon. Friend the Prime Minister clarified the Government's commitment to the group. I believe that his statement has removed doubts about whether members of the group would be admitted to the United Kingdom in the unlikely event of their coming under pressure to leave Hong Kong. We are not, therefore, planning primary legislation for that purpose.

    United States of America
    Mr. MacShane: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on United Kingdom relations with the United States of America. [691]
    Sir Nicholas Bonsor: Relations between the United Kingdom and the United States are excellent.
    Mr. MacShane: After the Prime Minister's disastrous intervention four years ago in the United States election campaign and the phalanx of Tory officials sent from central office to help the Conservative candidate, Robert Dole, to his great election result next week, is it not a fact that on key economic issues, whether raising the

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    minimum wage or ensuring that child labour and social questions are discussed at the World Trade Organisation, we are right out of line with the US, and that the American Administration cannot wait for a change of government here in the United Kingdom, for an Administration that will speak a modern language?
    Sir Nicholas Bonsor: No. The United States and the United Kingdom are in line on almost every aspect of international affairs. We work closely together in, for example, Bosnia and in the United Nations in trying to secure reform of that organisation. We are trying to move forwards towards the liberalisation of world trade. We think alike in all major areas of international policy. The point that the hon. Gentleman has made for the second time in Question Time about support given by certain members of the Conservative party to opposition to President Clinton at the last election is fatuous. The relationship between the United States, my right hon. Friend the Prime Minister and the Government are extremely good.
    Mr. Dykes: Bearing in mind the fact that the career of the present American Secretary of State has been tangibly underwhelming, to put it mildly, will my hon. Friend promise that on Wednesday 6 November Foreign Office Ministers will contact President Clinton's staff to insist that the United States accepts European participation in the middle east peace process, and that it will put necessary pressure on some of the few extremists in Israel to ensure that a proper middle east peace process emerges from Israeli co-operation, as is desired by millions of moderate citizens?
    Sir Nicholas Bonsor: Certainly not.

    Indonesia
    Mr. Ainger: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met (i) the Indonesian ambassador and (ii) Indonesian Government representatives to discuss human rights.[693]
    Mrs. Bridget Prentice: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on United Kingdom-Indonesia relations. [694]
    Mr. Hanley: With permission, Madam Speaker. I should like to answer Questions 10 and 11 together.
    My right hon. and learned Friend the Foreign Secretary last discussed human rights issues with the Indonesian Foreign Minister in New York in September 1996, as I did with him in July this year in Jakarta. We meet the Indonesian ambassador and his staff regularly to discuss a wide range of issues, including human rights.
    Mr. Ainger: Can the Minister explain to the House why he continues to believe one word or any assurance given to the Government by the Indonesian regime, which is clearly responsible for the deaths of up to 200,000 East Timorese? Why will he not believe the words of Jose Ramos Horta, the 1996 Nobel peace prize winner, who said in the course of a Liverpool trial in July that British Hawk aircraft fly low over East Timor and attack
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    unprotected peasant people? If the Minister does not believe Mr. Ramos Horta, why does he not believe Bishop Carlos Belo, who said—
    Madam Speaker: Order. The hon. Gentleman must not make a speech. We are not on an Adjournment debate. We need brief questions. We are not making the progress that we normally make with Foreign Office questions. Let us get on quickly.
    Mr. Ainger: Why does the Minister not believe the words of Bishop Carlos Belo, who in relation to arms supplies to the Indonesian regime that such supplies were in the interests only of industrialised countries? Why does he not accept—
    Madam Speaker: Order. I think that the Minister has got the message.
    Mr. Hanley: We do not take the assurances of Indonesians alone. We take evidence also from a number of other sources. As for arms to Indonesia, or any defence equipment, under article 51 of the United Nations charter all sovereign states enjoy the right to self-defence. All applications to export defence equipment are examined case by case in the light of established criteria and internationally agreed guidelines.
    We do not allow the export of arms and equipment likely to be used for internal repression in Indonesia or East Timor. I discussed these issues with Mr. Ramos Horta when I met him on 24 April. I believe, therefore, that we are taking our responsibilities extremely seriously.
    Mrs. Prentice: Even if we accept the Minister's guarantees about meetings with the Indonesian Government, how can he convince us that there are regular and rigorous checks on whether that Government are telling the truth? What assurance can he give us that the Government's commitment is genuine and has not abated since the cheque has been banked?
    Mr. Hanley: As I have said, we use the diplomatic staff at our post in Jakarta to check on actions in a wide-ranging way, throughout their normal working year. Indonesia, after all, is not subject to international sanctions, and the key point when selling arms is human rights. We raise that point directly with the Indonesians and we do not sell them weapons that are likely to be used for internal repression.
    Mr. Fatchett: What about water cannon?
    Mr. Hanley: If water cannon is used to try to stop peaceful demonstrators, that is of course totally unacceptable; if it is used to stop rioters, that may be acceptable. It is totally unacceptable to use chemicals or dyes with the water cannon. The only admission that the Indonesians have been made about equipment that they have used concerned armoured vehicles which I believe were supplied by the United Kingdom in the 1960s—I cannot say which Government supplied them—and were used to counter student demonstrations in April; the Indonesians have arrested, tried and sentenced those responsible.
    Mr. John Marshall: Will my right hon. Friend confirm that if we were to ban arms exports to Indonesia, the Indonesians would get their arms from someone else and the only sufferers would be those employed in defence industries in the United Kingdom?
    Mr. Hanley: While I am sure that my hon. Friend is right, I can assure him that we would not sell arms to any country merely because it could get them from somebody else. We use very special criteria to ensure that the arms are not used for repressive purposes. We approve the export of equipment on the ground that we do not believe that it is likely to be used for internal repression. We stick carefully to that extremely important principle.
    Mr. Jacques Arnold: Does my right hon. Friend nevertheless appreciate that there are severe human rights problems in East Timor, and will he discuss those issues with our Portuguese friends, who have a long-standing insight into that territory and into what is happening there?
    Mr. Hanley: We regularly discuss East Timor with the Indonesians and they are well aware of our views. As I have said, my right hon. and learned Friend the Foreign Secretary discussed the matter with the Indonesian Foreign Minister, Mr. Alatas, at their meeting in New York in September. I accept that there have been human rights violations in East Timor, but the EU common position, published in late June, called for a significant improvement in that situation, and we would be delighted if the award of the Nobel peace prize helped in the realisation of a comprehensive settlement that is acceptable to all parties, including the East Timorese.
    Mrs. Clwyd: The Minister will know, because we have discussed the matter, that in September last year—14 months ago—I submitted a detailed report to the National Audit Office on British aid to Indonesia linked with human rights abuses. Can he assure us that his Department is not deliberately blocking the publication of the NAO report for fear of political embarrassment?
    Mr. Hanley: I can give the hon. Lady exactly that assurance. We are not holding up the report, and I believe that the NAO review of aspects of the aid programme to Indonesia will be available soon. I do not know the report's contents, but I hope that the hon. Lady will stick by its findings, because the Government certainly will.
    Mr. Hawkins: Does my right hon. Friend agree that the Opposition are seeking to destroy the jobs of many people who work for British Aerospace? Before making their case, should not the Opposition first discuss with the leader of the Manufacturing, Science and Finance Union at British Aerospace Warton how much damage he believes their proposals would cause British workers and jobs, instead of flying in the face of the facts and suggesting that aircraft are carrying out actions that they do not have the capacity to carry out?
    Mr. Hanley: Yes, we have received assurances from the Indonesian Government that Hawk aircraft will not be used in Indonesia and East Timor, and there is no evidence to suggest that those assurances have not been respected. In fact, we have investigated thoroughly reports
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    that Hawk aircraft may have been used in East Timor but found absolutely no evidence from any source to support them. However, our standard licensing procedures apply to all defence exports. Hawk export licence applications are considered carefully in the light of established criteria—that is not only to protect jobs but to protect lives honourably.
    Mr. Fatchett: As the Minister has been less than fulsome, I take this opportunity on behalf of the House to congratulate Bishop Belo and Jose Ramos Horta on being awarded the Nobel peace prize and on their work on behalf of the people of East Timor, which is certainly appreciated by the Opposition. Is not Indonesia yet another example of the Government saying one thing about human rights but acting differently?
    Is the Minister not aware of recent authoritative reports which show that pro-democracy demonstrations in Indonesia this summer were suppressed by the use of electric shock batons and water cannons, all of which were supplied by British companies? Will he explain how such instruments of torture and repression can possibly be used to promote democracy and human rights? Is it not about time that the Government came clean on their record in Indonesia and their support for a regime which stands for the violation of human rights?
    Mr. Hanley: We certainly recognise the work done by Bishop Belo in defending the rights of the people of East Timor and I congratulate him and Jose Ramos Horta. They meet the Government regularly and I congratulate them most sincerely. As for the hon. Gentleman's comments about certain pieces of equipment being used in Jakarta earlier this year, I should be grateful if he could give me evidence, chapter and verse. Is the Labour party saying that it would break off diplomatic relations with Indonesia?

    European Union Decision Making
    Mr. Gallie: To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he will take to ensure that proposals to have the veto removed from European Union decision making are rejected; and if he will make a statement. [695]
    Mr. David Davis: I crave your indulgence for 30 seconds, Madam Speaker. I hear that my hon. Friend has had a happy event in the past day or two and the words, ''We are a grandfather" are probably in order. I offer my best wishes to him, his daughter and his grand-daughter Naomi.
    With regard to my hon. Friend's question, the case for extending the use of qualified majority voting has not been made and we shall continue to oppose such proposals at the intergovernmental conference.
    Mr. Gallie: I thank my hon. Friend for his kind remarks of a personal nature and also for his response to my question, as it was the response for which I had hoped. Does not the Government's approach contrast with the policies offered by the Lib-Lab Opposition? Does not their white-flag policy on the issue pose a great threat to the people of the United Kingdom in the years ahead?
    Mr. Davis: My hon. Friend is entirely right. The Liberal party is willing to give up our sovereignty in the form of the veto on many matters, including foreign affairs. It is willing to subordinate the Western European Union to the European Union and to do almost anything to advance the cause of federalism. The Labour party, in a rather more concealed way, is aiming in the same direction.
    As for qualified majority voting and vetoes, we have heard many arguments about the unanimity requirement holding up Europe, but on Monday this week we witnessed a demonstration of how it works, and works well, when the way in which the European Union should deal with the Helms-Burton proposal came before the Foreign Affairs Council. Denmark had serious constitutional, political and judicial problems with that proposal. Because it was a matter of unanimity, Denmark was not overridden-as it might have been with qualified majority voting-and we found a perfectly good and effective policy which met all its requirements. That happened because Denmark had the veto, and the same should apply to us.
    Mr. Shore: I welcome the Minister's assurance, but will he go beyond sticking by the veto where it now exists and turn his mind to persuading our European partners that in relation to qualified majority the votes should he re-weighted, so that Britain and other larger and more populous European states have a much larger share of the votes?
    Mr. Davis: I find myself mildly embarrassed, as I entirely agree with the right hon. Gentleman. A country such as Luxembourg has one vote for 400,000 people while we have one vote per 6 million people. That should be put right, and that is one of our objectives at the next intergovernmental conference.

    Century Date Change (Computers)
    Mr. David Atkinson: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will study the consequences for his Department of the effect of the century date change on computer systems; and if he will make a statement. [696]
    Mr. Hanley: While we are in congratulatory mode, I should congratulate my hon. Friend the Member for Woodspring (Dr. Fox), the Under-Secretary of State, as this is his first Question Time for the Foreign and Commonwealth Office. I regret that he has had no questions to answer and I should be grateful if hon. Members would give him plenty of work next month.
    In reply to my hon. Friend the Member for Bournemouth, East (Mr. Atkinson), the FCO diplomatic wing has completed an initial study which shows that 60 per cent. of FCO software applications will be affected in some way. Further study is taking place to determine the risks and costs. Remedial action will then be taken. The Overseas Development Administration is taking similar action.
    Mr. Atkinson: Does my right hon. Friend agree that our future security, and that of our allies, relies on all our computer systems being millennium compliant? Will he confirm that this country is well ahead of many other
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    countries in responding to the 2000 virus and can he say what discussions he is having with our allies to ensure that they are doing the same?
    Mr. Hanley: I am grateful to my hon. Friend for raising the subject. It is important that not only the FCO but all Government Departments should heed his warnings. I can confirm that the Foreign Office is well ahead in its programme to try to ensure that we are fully resilient to the 2000 problem by no later than 31 March 1999. We are also working closely with other countries on that issue.

    Queen's Speech
    Mr. Thurnham: To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received about the measures announced in the Queen's Speech. [697]
    Sir Nicholas Bonsor: None.
    Mr. Thurnham: Will the Government bear in mind the important work done by the BBC World Service and ensure that its work is properly funded? Is it not the most successful service of its kind in the world and should we not invest in its success?
    Sir Nicholas Bonsor: As the hon. Gentleman should be well aware, given where he sat in the House until recently, the Government give great support to the World Service, which does a magnificent job worldwide. We will continue to support it.
    Mr. Wilkinson: Can my hon. Friend reassure the House that the Government will be consistent with the commitment in the Queen's Speech to the pursuit of the liberal economy by the European Union? In particular, will he bear in mind the potentially disastrous consequences to our economy of the imposition of a working time directive by the European Union through the mechanism of the health and safety procedures? Were that to happen, could the Government exercise their veto and just ignore what the European Court of Justice would try to impose?
    Sir Nicholas Bonsor: As my hon. Friend knows, it is likely that the European Court of Justice will report later in November on the working time directive. The Government will have to review that report closely and consult industry to see what action needs to be taken. Should the working time directive give us difficulty, we shall work hard in the IGC to obtain an amendment of the European Union rules.
    Mr. Tony Lloyd: The Queen's Speech makes mention of the need to deal with human suffering at the international level. The tragedy that is unfolding on our television screens here, but in real life in Zaire, is one on which the attention of the whole House should be fixed. Does the Minister agree with the proposition put forward for many months by the aid agencies and by those on the ground that the answer to the situation involves not just humanitarian aid but political action by the international community? If he agrees with that proposition, will he tell the House why the Government, with other members of the Security Council, have done very little in that time to

    649
    bring the warring parties together? Will he ensure that Britain plays a leading role in bringing all the parties in Zaire, Rwanda and Burundi to the conference table to find a political solution, without which hundreds of thousands of lives will be lost?
    Sir Nicholas Bonsor: I agree that political as well as humanitarian aid and effort is required from the international community. I do not accept that this tragedy is unfolding because of the failure of the international community. There is a limit to what the international community can do to help those who will not help themselves. We will continue to strive extremely hard to try to bring this tragedy to a close.

  BILL PRESENTED
    EDUCATION
    Mrs. Secretary Shephard, supported by the Prime Minister, Mr. Chancellor of the Exchequer, Mr. Secretary Howard, Mr. Secretary Gummer, Mr. Secretary Hague, Mr. Forth and Mrs. Gillan, presented a Bill to amend the law relating to education in schools and further education in England and Wales; to make provision for the supervision of the awarding of external academic and vocational qualifications in England, Wales and Northern Ireland; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 8.]

Business of the House
Motion made, and Question proposed,
That—
(1) Standing Order No. 13 (Arrangement of public business) shall have effect for this Session with the following modifications, namely:
In paragraph (4) the word 'eight' shall be substituted for the word 'ten' in line 43; in paragraph (5) the word 'fifth' shall be substituted for the word 'seventh' in line 45;
(2) Standing Order No. 90 (Second reading committees) shall have effect for this Session with the following modification, namely:
In paragraph (2) the word 'fifth' shall be substituted for the word 'seventh' in line 23; and
(3) Private Members' Bills shall have precedence over Government business on 13th December, 17th, 24th and 31st January, 7th, 14th and 28th February and 18th April.—[Mr. Wells.]
3.31 pm
Madam Speaker: I have selected the amendment in the name of the hon. Member for Newham, South (Mr. Spearing).
Mr. George Stevenson: On a point of order, Madam Speaker. In yesterday's Hansard at column 468, in response to my question, the Secretary of State for Education and Employment is on record as saying that she had in her possession a letter from the chief education officer of Staffordshire county council stating that the council was extremely pleased with this year's education settlement in Staffordshire. The chief education officer has no knowledge of any such letter, despite a detailed examination and search. I have asked the Secretary of State to produce the letter, but as yet no such letter has appeared.
That information was, therefore, inaccurate and misleading. Is it in order, Madam Speaker, to ask you to request the Secretary of State for Education arid Employment to return to the Dispatch Box and either produce the letter or apologise to the House?
Madam Speaker: The matter that the hon. Member has raised is not a point of order. It is a question for argument and debate. I am afraid that he must use the Order Paper to get the answer from the Secretary of State that he seeks.
Ms Joan Walley rose—
Madam Speaker: The motion has been moved formally. I call Mr. Spearing to move the amendment.
Mr. Nigel Spearing: I beg to move, as an amendment to the motion, after paragraph (3), to add,
(4) Private Members' Notices of Motions shall have precedence over Government business until Seven o'clock on Monday 18th November, Monday 16th December, Monday 27th January and Monday 24th February, and ballots for these Notices shall be held after Questions on Thursdays 7th November, 5th December, 16th January and 13th February.
(5) No Notice of Motion shall be handed in for any of the days on which Private Members' Notices have precedence under this Order in anticipation of the ballot for that day.
652
The fact that my amendment has been selected has caused some astonishment, particularly in view of the important debate on the economy that is to follow. I shall deal with the amendment almost as if it were a ten-minute Bill to follow later in the Session.
The debate to follow this one will be about taxation, and possibly about what may be included in the Budget. This issue is about the future of Parliament. Those who are astonished at the selection of my amendment convey their ignorance of the basis of Parliament. The rules of the House, what individual Members can do arid the power that they have to move motions should concern all of us. It is not a matter of prerogative of the Crown in the form of the Government of the day. The ability to move motions—this amendment, in my case—on only four Mondays for three hours each Monday between now and next summer or the general election is crucial. For two years, we have not had that ability, because of a misunderstanding by the Government, and perhaps others, of the role of the Back Bencher. We are here as individuals.
The Leader of the House may take an opposite view, but I think that he is under a misapprehension. This is an all-party issue that concerns all hon. Members. It is not a matter only for Parliament; it concerns the voters whom we represent. If the voice and vote of Back Benchers are restricted, so are the rights of the voters whom we represent.
A private Member's motion is different from an Adjournment debate. We may have time on a Wednesday to discuss the Adjournment, but as hon. Members know, the Adjournment debate is no substitute for the ability to bite in a vote if required. The leverage available to Back Benchers is being taken away.
I think that we can apply the Hacker test. Both hon. Members and those outside are amused by Jim Hacker. Let us suppose that Jim Hacker has just produced a form for benefit claimants-nothing to do with party politics. Let us suppose that he has run amok and gone wrong, and that lots of ladies who fill up the form cannot get the benefits that they want. There are letters all over the place. "Oh," says the official, "there's going to be a debate." "It's all right," says Jim. "On the Adjournment, I can get away with it. It will be late at night; I shall say I'm sorry, and they will not be able to do anything." "No," says the official. "A private Member's motion has been accepted, and they are going to reduce your income by £5,000." That is another matter.
"Moreover," says the official, "there is Question Time. Next week you must deal with Question Time, and this issue will come up. Who do you think is No. 3 on the list? Tam Dalyell." "Is that the worst?" asks the Prime Minister. "No," replies the official. "No. 6 is Tony Banks." The ability to provide enlightenment when a debate is going on makes questions very important.
Those who are Ministers now will not be Ministers for much longer. They will soon be candidates. Are they going to go back to the electors of Huntingdon, for instance—the Roundhead electors of Huntingdon—and say, "We took away the rights of Back Benchers"? Will they go to Braintree, with its Huguenot traditions, and say, "We shall not allow you to do this"—or, indeed, to the constituency of the Government Chief Whip, the right hon. Member for Eddisbury (Mr. Goodlad)?

653
In a tennis club, or indeed any club, people should not be denied the right to table motions; but here, even early-day motions—which are treasured by people who think that they are important—cannot be debated. It used to be possible, although it involved a ballot and a queue. Have we really been reduced to not even having the ability to do what is possible in the national lottery? Can we not even "put in for" a motion? That ends all the history of the House, and prevents voters from having their say through Members of Parliament.
Whatever may have happened in the past, let me ask hon. Members on both sides of the House what reply they will give if, when they go before the electorate as candidates in the election, a member of Charter 88, or any other organisation, says, "You voted to deny the rights of Back Benchers, and thence the voice and votes of the electorate." "Oh, we have Wednesdays and a few Adjournment debates," cannot be a good reply. If the Chief Whip or the Lord President is advising his friends to vote down our amendment, he must think again. Most of us will be candidates in the next election.
The relationship between the electorate and the House is now a national issue. There is a lack of confidence in our ability to deal with issues of the day, which may not be party issues, but which the electorate think that we should be able to discuss. Clearly, if we have no ballot for motions, we shall not be able to discuss them. I suggest that we diminish our democracy thereby. We diminish parliamentary procedures, and we diminish the quality of democracy of which this country has so far been proud.
The power of Back Benchers has diminished. It is diminishing. It ought to be increased.
3.38 pm
The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): The hon. Member for Newham, South (Mr. Spearing) has courteously and reasonably acknowledged that the House is anxious to proceed with the important economic debate that will follow, and I am sure that his view is widely shared in the House. I shall therefore speak briefly, making just three main points.
First, I personally have no doubt that the new arrangements give private Members—Back Benchers—a better deal than the old ones. Private Members will have more time: about twice as many opportunities to raise subjects. That time is better structured, and does not give rise to the occasions that, as we all know, used to occur, when an issue was discussed endlessly to prevent the next subject from being reached. That was not a very sensible use of parliamentary time. Private Members' time now comes at more convenient hours than was the case with many previous opportunities, including the Consolidated Fund debate, which used to come at a time when all normal citizens were in bed.
Sir Patrick Cormack: I am intervening now because I do not want to speak later and detain the House. The essential point made by the hon. Member for Newham, South (Mr. Spearing) is that with the old motions we could hold the Executive to account by having a vote. A series of Adjournment debates on a
654
Wednesday morning, welcome and helpful as they may be—and I pay tribute to my right hon. Friend for all that he has done as Leader of the House—are not an effective substitute.
Mr. Newton: I think that my hon. Friend's point will be covered by my next point.
Secondly, the changes were made following a very carefully considered report of a Select Committee of this House—the Jopling report. It was seen as a balanced package and was accepted by the House by a very large majority. That is not to say that it is immutable and that no changes can be made. However, if there are to be changes, they should not be made piecemeal, but should be made as part of a properly considered review. They should not be made in haste at this late stage in this particular Parliament.
Thirdly, the House may recall that in last November's debate, when we turned Sessional Orders into Standing Orders, the hon. Member for Newham, South moved an amendment in precisely the same terms, although not with the same dates, as the amendment that he moved today. That amendment was defeated by 116 votes to 19. In my view, the considerations that led to that outcome on that occasion are exactly the same today. If the hon. Gentleman pushes his amendment to a vote, I hope that the House will reject it again.
3.41 pm
Mr. Spearing: With the leave of the House, Madam Speaker—just three sentences. First, just one Opposition Member voted against my previous amendment. Secondly, the Consolidated Fund debate is now on the Adjournment, but that was not the case previously as it used to be the Second Reading of a Bill. That procedure has been diminished. Thirdly, I am advocating only another 12 hours for private Members. Cannot we afford that between now and next summer? It is more power, not less.
Question put, That the amendment be made:—
The House divided: Ayes 87, Noes 274.

Division No. 2]

[3.41 pm

AYES

Abbott, Ms Diane

Evans, John (St Helens N)

Ainger, Nick

Ewing, Mrs Margaret

Ashton, Joseph

Faulds, Andrew

Austin-Walker, John

Flynn, Paul

Beggs, Roy

Forsythe, Clifford (S Antrim)

Biffen, John

Fyfe, Mrs Maria

Callaghan, Jim

Galloway, George

Campbell, Ronnie (Blyth V)

Gapes, Mike

Campbell-Savours, D N

Graham, Thomas

Canavan, Dennis

Grant, Bernie (Tottenham)

Clapham, Michael

Hardy, Peter

Clwyd, Mrs Ann

Hendron, Dr Joe

Cook, Frank (Stockton N)

Hill, Keith (Streatham)

Corbett, Robin

Hogg, Norman (Cumbernauld)

Corston, Ms Jean

Hood, Jimmy

Cunliffe, Lawrence

Hughes, Robert (Ab'd'n N)

Cunningham, Jim (Cov'try SE)

Hughes, Roy (Newport E)

Dafis, Cynog

Jackson, Mrs Helen (Hillsborough)

Davies, Denzil (Llanelli)

Jenkins, Brian D (SE Staffs)

Davis, Terry (B'ham Hodge H)

Jones, Barry (Alyn & D'side)

Dixon, Don

Jones, Ieuan Wyn (Ynys Môn)

Donohoe, Brian H

Jones, Dr L (B'ham Selly Oak)

Dunwoody, Mrs Gwyneth

Kaufman, Gerald

655

Lewis, Terry

Salmond, Alex

Llwyd, Elfyn

Sheldon, Robert

Loyden, Eddie

Shepherd, Richard (Aldridge)

McAllion, John

Simpson, Alan

McKelvey, William

Skinner, Dennis

Mackinlay, Andrew

Spearing, Nigel

McNamara, Kevin

Steinberg, Gerry

MacShane, Denis

Stevenson, George

Madden, Max

Taylor, John D (Strangf'd)

Mahon, Mrs Alice

Thompson, Jack (Wansbeck)

Marek, Dr John

Trimble, David

Marshall, David (Shettleston)

Walley, Ms Joan

Michie, Bill (Shef'ld Heeley)

Welsh, Andrew

Miller, Andrew

Wigley, Dafydd

Molyneaux, Sir James

Williams, Alan (Swansea W)

Morris, Alfred (Wy'nshawe)

Wise, Mrs Audrey

Pickthall, Colin

Wray, Jimmy

Powell, Sir Raymond (Ogmore)

Young, David (Bolton SE)

Prentice, Gordon (Pendle)

Randall, Stuart

Tellers for the Ayes:

Ross, William (E Lond'y)

Mr. Harry Barnes and

Rowlands, Ted

Mr. David Winnick.

NOES

Ainsworth, Peter (E Surrey)

Clarke, Eric (Midlothian)

Ainsworth, Robert (Cov'try NE)

Clarke, Kenneth (Rushcliffe)

Aitken, Jonathan

Coe, Sebastian

Alexander, Richard

Congdon, David

Alison, Michael (Selby)

Conway, Derek

Allason, Rupert (Torbay)

Coombs, Anthony (Wyre F)

Allen, Graham

Coombs, Simon (Swindon)

Alton, David

Cope, Sir John

Amess, David

Couchman, James

Arbuthnot, James

Cran, James

Arnold, Jacques (Gravesham)

Cummings, John

Ashby, David

Currie, Mrs Edwina

Ashdown, Paddy

Davies, Bryan (Oldham C)

Atkinson, David (Bour'mth E)

Davies, Chris (Littleborough)

Atkinson, Peter (Hexham)

Davies, Quentin (Stamf'd)

Baker, Nicholas (N Dorset)

Davis, David (Boothferry)

Baldry, Tony

Day, Stephen

Banks, Matthew (Southport)

Devlin, Tim

Banks, Robert (Harrogate)

Dewar, Donald

Bates, Michael

Dorrell, Stephen

Batiste, Spencer

Douglas—Hamilton, Lord James

Beith, A J

Duncan, Alan

Bellingham, Henry

Duncan Smith, Iain

Beresford, Sir Paul

Dunn, Bob

Betts, Clive

Elletson, Harold

Blunkett, David

Emery, Sir Peter

Bonsor, Sir Nicholas

Evans, Jonathan (Brecon)

Booth, Hartley

Evans, Roger (Monmouth)

Bottomley, Peter (Eltham)

Evennett, David

Bowden, Sir Andrew

Faber, David

Bowis, John

Fabricant, Michael

Boyson, Sir Rhodes

Fenner, Dame Peggy

Brooke, Peter

Fishburn, Dudley

Brown, Michael (Brigg Cl'thorpes)

Forman, Nigel

Brown, Nicholas (Newcastle E)

Forsyth, Michael (Stirling)

Browning, Mrs Angela

Forth, Eric

Bruce, Ian (S Dorset)

Foster, Don (Bath)

Bruce, Malcolm (Gordon)

Fox, Dr Liam (Woodspring)

Burns, Simon

Freeman, Roger

Burt, Alistair

French, Douglas

Butcher, John

Fry, Sir Peter

Butler, Peter

Gale, Roger

Butterfill, John

Gallie, Phil

Campbell, Menzies (Fife NE)

Gardiner, Sir George

Carlisle, Sir Kenneth (Linc'n)

Garel—Jones, Tristan

Carrington, Matthew

Garnier, Edward

Cash, William

Gill, Christopher

Channon, Paul

Gillan, Mrs Cheryl

Chidgey, David

Goodlad, Alastair

Churchill, Mr

Goodson—Wickes, Dr Charles

Clappison, James

Gorman, Mrs Teresa

Clark, Dr David (S Shields)

Gorst, Sir John

656

Grant, Sir Anthony (SW Cambs)

Mitchell, Andrew (Gedling)

Greenway, Harry (Ealing N)

Mitchell, Sir David (NW Hants)

Greenway, John (Ryedale)

Moate, Sir Roger

Griffiths, Peter (Portsmouth N)

Monro, Sir Hector

Grylls, Sir Michael

Montgomery, Sir Fergus

Hamilton, Sir Archibald

Mudie, George

Hamilton, Neil (Tatton)

Murphy, Paul

Hampson, Dr Keith

Nelson, Anthony

Hanley, Jeremy

Newton, Tony

Hannam, Sir John

Nicholson, David (Taunton)

Hargreaves, Andrew

O'Brien, William (Normanton)

Harris, David

Onslow, Sir Cranley

Haselhurst, Sir Alan

Oppenheim, Phillip

Hawksley, Warren

Ottaway, Richard

Heald, Oliver

Page, Richard

Heath, Sir Edward

Paice, James

Heathcoat—Amory, David

Patnick, Sir Irvine

Heseltine, Michael

Pawsey, James

Hicks, Sir Robert

Peacock, Mrs Elizabeth

Hill, Sir James (Southampton Test)

Pickles, Eric

Horam, John

Pope, Greg

Howard, Michael

Porter, David (Waveney)

Howell, David (Guildf'd)

Powell, William (Corby)

Howell, Sir Ralph (N Norfolk)

Prentice, Mrs B (Lewisham E)

Hughes, Kevin (Doncaster N)

Rathbone, Tim

Hughes, Robert G (Harrow W)

Redwood, John

Hunt, David (Wirral W)

Reid, Dr John

Hunter, Andrew

Renton, Tim

Hurd, Douglas

Richards, Rod

Illsley, Eric

Riddick, Graham

Jack, Michael

Robathan, Andrew

Jackson, Robert (Wantage)

Roberts, Sir Wyn

Jenkin, Bernard (Colchester N)

Robertson, Raymond S (Ab'd'n S)

Jessel, Toby

Robinson, Mark (Somerton)

Johnson Smith, Sir Geoffrey

Roe, Mrs Marion

Jones, Jon Owen (Cardiff C)

Rooker, Jeff

Jones, Nigel (Cheltenham)

Rowe, Andrew

Jones, Robert B (W Herts)

Sainsbury, Sir Timothy

Jopling, Michael

Scott, Sir Nicholas

Kellett—Bowman, Dame Elaine

Shaw, David (Dover)

Kirkhope, Timothy

Shaw, Sir Giles (Pudsey)

Kirkwood, Archy

Shephard, Mrs Gillian

Knapman, Roger

Shepherd, Sir Colin (Heref'd)

Knight, Mrs Angela (Erewash)

Sims, Sir Roger

Knight, Greg (Derby N)

Skeet, Sir Trevor

Kynoch, George

Smith, Sir Dudley (Warwick)

Lait, Mrs Jacqui

Smith, Tim (Beaconsf'ld)

Lamont, Norman

Spencer, Sir Derek

Lang, Ian

Spicer, Sir Michael (S Worcs)

Lawrence, Sir Ivan

Spring, Richard

Legg, Barry

Sproat, Iain

Lester, Sir Jim (Broxtowe)

Squire, Robin (Hornchurch)

Lidington, David

Stanley, Sir John

Lord, Michael

Steel, Sir David

Lynne, Ms Liz

Steen, Anthony

MacGregor, John

Stephen, Michael

MacKay, Andrew

Stern, Michael

Maclean, David

Streeter, Gary

McLoughlin, Patrick

Sumberg, David

McNair—Wilson, Sir Patrick

Sweeney, Walter

Maddock, Mrs Diana

Sykes, John

Madel, Sir David

Tapsell, Sir Peter

Maitland, Lady Olga

Taylor, Mrs Ann (Dewsbury)

Malone, Gerald

Taylor, Ian (Esher)

Mandelson, Peter

Taylor, John M (Solihull)

Mans, Keith

Taylor, Sir Teddy

Marland, Paul

Thompson, Sir Donald (Calder V)

Marshall, John (Hendon S)

Tipping, Paddy

Marshall, Sir Michael (Arundel)

Townend, John (Bridlington)

Martin, David (Portsmouth S)

Townsend, Cyril D (Bexl'yh'th)

Martlew, Eric

Tracey, Richard

Mates, Michael

Tredinnick, David

Mawhinney, Dr Brian

Trend, Michael

Meale, Alan

Turner, Dennis

Merchant, Piers

Twinn, Dr Ian

Mills, Iain

Vaughan, Sir Gerard

657

Waldegrave, William

Wiggin, Sir Jerry

Walker, Bill (N Tayside)

Wilkinson, John

Waller, Gary

Willetts, David

Ward, John

Wilshire, David

Wardle, Charles (Bexhill)

Wood, Timothy

Waterson, Nigel

Yeo, Tim

Watts, John

Young, Sir George

Wheeler, Sir John

Whitney, Ray

Tellers for the Noes:

Whittingdale, John

Mr, Bowen Wells and Mr. Gyles Brandreth.

Widdecombe, Miss Ann

Question accordingly negatived.
Main Question put and agreed to.
Resolved,
That—
(1) Standing Order No. 13 (Arrangement of public business) shall have effect for this Session with the following modifications, namely:
In paragraph (4) the word 'eight' shall be substituted for the word 'ten' in line 43; in paragraph (5) the word 'fifth' shall be substituted for the word 'seventh' in line 45;
(2) Standing Order No. 90 (Second reading committees) shall have effect for this Session with the following modification, namely:
In paragraph (2) the word 'fifth' shall be substituted for the word 'seventh' in line 23; and
(3) Private Members' Bills shall have precedence over Government business on 13th December. 17th, 24th and 31st January, 7th, 14th and 28th February and 18th April.

SITTINGS OF THE HOUSE
Ordered,
That—
(1) Standing Order No. 11 A (House not to sit on certain Fridays) shall have effect for this Session with the following modification, namely:
In paragraph (1) the word 'eight' shall be substituted for the word 'ten'; and
(2) the House shall not sit on the following Fridays:
8th and 22nd November, 21st February, 7th. 14th and 21st March and 4th and 11th April.—[Mr. Wood.]

Orders of the Day

  Debate on the Address
  [SIXTH DAY]
  Order read for resuming adjourned debate on Question [23 October],
  That an humble Address be presented to Her Majesty, as follows:
  Most Gracious Sovereign,
  We, your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.—[Sir Norman Fowler.]
  Question again proposed.

  The Economy
  Madam Speaker: I have selected the amendment standing in the name of the Leader of the Opposition. The amendment standing in the name of the right hon. Member for Yeovil (Mr. Ashdown) will be called at the end of the debate for Division. Speeches between 7 o'clock and 9 o'clock will be restricted to 10 minutes.
  3.54 pm
  Mr. Gordon Brown: I beg to move, as an amendment to the Address, at the end of the Question to add:
  "but note that since 1979 the Government has broken each one of its central promises: to reverse national economic decline, to cut unemployment which stood at one million when it took office, to raise investment in the United Kingdom's manufacturing industries, to cut tax, spending and debt and to build a cohesive society; regret the absence from the Gracious Speech of measures that will strengthen the supply side of the economy, expand the United Kingdom's long term capacity, ensure high levels of sustainable growth and heal social division; call for a new employment policy which moves people from welfare to work, a new education policy which equips people for the future, a new industry policy for investment that will increase small business and high technology investment in all regions of Britain; and note that these measures are the only sure way of ensuring opportunity for all and a durable recovery that will keep inflation and interest rates low, and bring long term prosperity for all."
  As we begin the last day of the debate on the Queen's Speech, let us be clear about the reasons for the interest rate rise this morning. That rise was an inevitable result of the Government's policies, and it is happening in no other country. The Government are pushing interest rates up not because of international pressures but because of a problem in Britain.
  That cannot be justified or explained by saying that we have lower interest rates than our competitors, and that Britain is merely catching up. We do not have the lowest rate in Europe or even the second, third or fourth lowest. Interest rates are already higher in Britain than in 10 other European countries. We are 11 th out of 15 for interest rates in Europe. Only Spain, Portugal, Greece and Italy have higher rates.
  The rise, which is from a higher base than that of other European countries, comes from domestically created problems which are internal to the British economy, and which the Government must explain in the debate. The rise cannot be justified by the huge strength of the economy. The Chancellor has already downgraded his

  659
  growth forecast for this year from 3 to 2.5 per cent., and in his Budget it may have to be admitted that growth is even lower. The Government are not putting up interest rates because of what is happening elsewhere or because of their success. They have been forced to push up rates because they do not believe that they can meet their inflation targets.
  The rise has occurred because, as we have been saying for the past four years, unless a recovery is based on solid foundations, a country cannot sustain anything other than sluggish growth without rising inflationary pressures. As we know, it is the same old British disease returning under the Government.
  The rise was inevitable, because the recovery has not produced the investment-led and industry-led growth that the Government predicted. It is the inevitable result of the policy of a Government who have failed to tackle the fundamental weaknesses of the economy. As a result, inflationary pressures are ready to undermine it. That is why the Government should have implemented before now the policies set out in our amendment. We have proposed those policies on many occasions, and they are right for the British economy.
  What is the nature of the economic recovery that has led to these higher inflationary pressures? It is not the industry-led recovery that we were led to expect in 1992. Industry has failed to expand in the way that it should if we are to have a sustainable recovery. Industrial production fell in the past three months. It is only 0.6 per cent. up on a year ago. Despite all the successes of individual companies, industrial output in the economy at this stage of the cycle is still weak.
  It is not a manufacturing-led recovery, either. Output has fallen over the past three quarters, and is less than 0.5 per cent. lower than a year ago. Despite some great individual success stories by many of our companies because of their efforts, manufacturing output is weak. At this stage, the recovery is not showing massive export growth, despite the devaluation of the pound. The summer economic forecast predicts that imports will grow faster than exports, and we still have the second worst trade deficit in the European Union.
  Most of all, the recovery is not investment led. We have been warning throughout about the failure of investment to rise throughout the last years of recovery. Private sector investment has been growing more slowly since the recession than in any recovery this century. At a similar stage of the cycle in the recovery of the late 1970s, investment had risen by 20 per cent. In the recovery of the early 1980s, it had risen by 30 per cent. In this recovery, it has risen by just 6 per cent., and manufacturing investment is falling. It is lower than it was a year ago. Small wonder that the Bank of England reported this year that investment growth has been weak in the recovery.
  Look at the complacency of the Chancellor of the Exchequer on investment. Every time, he and his predecessor predicted that there would be an investment recovery that would allow the economy's capacity to be strong enough to sustain growth. We were told that, in 1993, business investment would rise, and it fell by 2.5 per cent. Business investment was to rise by 7 per cent. in 1994, and it rose by only 2 per cent. It was to rise in 1995 by 10 per cent., and it rose by only 1.5 per cent. It is to rise this year by 7.5 per cent., and we wait to hear what the figures are.
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  This summer, we had the spectacle of the Deputy Prime Minister, faced with all those figures, publishing his competitiveness report and trying to tell us that, in a modern economy, because the record was so poor, investment levels were of no great significance.
  I tell the Chancellor of the Exchequer: prudence is absolutely critical to the economy, which is why the interest rate rise was necessary—the one that he has been forced to make—but prudent economic management depends for its success on the firm foundation of a strong economy that is investment rich, and which he has failed to achieve. Without investment-led growth and the export-led and industry-led recovery that was promised, we get to the problems that the Chancellor faces today.
  Mr. John Redwood: When a 10-year-old child can close a school in Labour Nottinghamshire and all the Labour party can do nothing to reopen that school, why should we believe that the right hon. Gentleman has any answers to our economic problems?
  Mr. Brown: We must be fair to the right hon. Gentleman. Like the Secretary of State for Education and Employment, he is speaking in a personal capacity. He was the man who coined the slogan, "No change, no chance". What does he think about what is happening to the economy today?
  Let us be absolutely clear that the economic fundamentals that a modern economy needs, in addition to the platform of stability that we support, are high investment in industry and in skill, and high productivity through creating employment opportunity. That is why our amendment contains exactly the proposals that the Government should be implementing.
  First, the Government should be implementing a policy for investment.
  Mr. Rod Richards: The right hon. Gentleman has said that it is his ambition to have a starting income tax rate of lop in the pound. He has not specified any parameters such as time scale, band width or whatever, but, in the most general sense, it is his ambition. Will he also say whether it is his ambition, again in the most general sense, without specifying any parameters, to have a single European currency?
  Mr. Brown: I ask the hon. Gentleman which he supports: the abolition of capital gains tax and inheritance tax, which is the priority of the Conservative party, or a lower starting rate of tax that would help everyone throughout the community. The sooner he realises that, when he goes to the electorate next year—or whenever the Prime Minister dares to call the election—he will have to defend a Conservative party that will be committed to abolishing capital gains tax and inheritance tax to benefit the few, instead of introducing a lower starting tax rate to benefit the many, the more modest he will be in what he says to the House.
  Despite everything that the Government say about low taxation, we have discovered in a publication of the Secretary of State for Social Security that, under this Government, people in Britain are paying marginal tax and benefit rates, not just of 80 per cent. or 90 per cent., but of as much as 150 per cent. For every pound they

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  earn, £1.50 is taken back. I therefore ask the hon. Member for Clwyd, North-West (Mr. Richards): what is his priority? I know what Britain's is.
  Let us examine what measures are absolutely essential.
  Mr. Tony Marlow: As always, the right hon. Gentleman complains about manufacturing investment arid growth. As all hon. Members know, the right hon. Gentleman wants to go, helter-skelter, into a European single currency, which means that he would have to meet the convergence criteria. What does he think would happen to growth and industrial investment if he attempted—helter—skelter-to meet the convergence criteria?
  Mr. Brown: The hon. Gentleman might like to ask the Chancellor that question during this debate.
  Mr. Marlow: What is the right hon. Gentleman's answer?
  Mr. Brown: If the hon. Gentleman had been listening to what I was saying, he would know that I was about to set out the measures necessary to achieve sustainable economic growth without increasing inflationary pressures.
  The Budget should contain three measures. First, we need an investment policy in which we build on a more consistent platform of stability, and tackle the investment shortfall in the economy. Even now, I believe that the Chancellor should adopt our proposals to introduce new incentives to increase long-term investment levels in science, technology, industry and small businesses—thereby increasing the economy's capacity—and our proposals to reform the loan guarantee system and the regional agencies across the country that can help to boost investment for small businesses. He should also adopt our new savings policies, which will channel investment.
  Time after time, in his complacent manner, the Chancellor has rejected our proposals, and predicted that investment will rise. Time after time, he has had to report that investment is not rising—which is one of the fundamental, underlying problems preventing growth in economic capacity without increasing inflationary pressures.
  Secondly, the Chancellor should examine a new national education and training policy that will strengthen the economy's supply side, in which we tackle the skills shortages that act as an inflationary pressure and economic bottleneck. Only a few days ago, Mary Chapman—chief executive of Investors in People—said:
  "It is notable that, as soon as we move out of recession, skills shortages start to re-emerge."
  That is why our proposals for a university for industry, individual learning accounts and school and college reform—which provide opportunity for all—will raise the economy's sustainable growth rate.
  Thirdly, the Chancellor should examine a new national employment policy—in fact, we need a national employment policy. The policy should tackle the fact that 20 per cent. of non-pensioner households in Britain have no one bringing home a wage. That figure is an indictment of the Government, who ran posters during the 1979
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  general election stating, "Labour isn't working-, and that they would sort out the dole queues. In 1979, 8 per cent. of households had no one in work. Today, the figure is nearly 20 per cent.—which is as high as the level in Spain.
  Mr. Graham Riddick rose
  Mr. Brown: If the Chancellor took action on employment, long-term unemployment and youth unemployment, and adopted our proposals for a windfall levy on the privatised utilities, he would not only cut social security costs but help the economy to run more efficiently.
  Mr. David Shaw: Does the right hon. Gentleman accept that a £3 billion windfall profits tax would be equivalent to a 20 per cent. value added tax rate on electricity and gas?
  Mr. Brown: The hon. Gentleman should consider what has been happening in the utility sector. Today, for example, the water regulator said that there were excess profits in the water industry. Further, we know that four water companies have been privatised, and have never paid a penny in mainstream corporation tax. Moreover, ordinary people around the country pay a tax rate of 24p in the pound, whereas, since privatisation, water companies pay only 2p in the pound. I believe that the hon. Gentleman will have a hard job convincing the electors of Dover that we should not impose a windfall tax on the utilities.
  I should tell the hon. Gentleman what he will have to answer for at the general election. He will have to answer for his manifesto, which stated that there are two vital messages to remember. We shall remind him of those messages throughout the campaign, the first of which is: "David lives locally." The second message is:
  "David Shaw supports lower tax."
  Tell the electors that, after 22 tax rises.
  Mr. Riddick: Will the right hon. Gentleman explain why unemployment in France and Germany is so much higher than in this country?
  Mr. Brown: The hon. Gentleman gives me a chance to point out a fact that Conservative central office statistics do not often tell him—that male unemployment in Britain is as high as in France and Germany. He cannot deny that one non-pensioner household in five has no one in work and earning a wage. That pathetic situation, after 17 years of Conservative government, stems from the under-registration of female employment, the fact that large numbers of women are not registered or given the opportunity to work, and the concentration of unemployment in no-income households.
  Hon. Members may wish to look at their personal manifestos before the election. In his personal manifesto in 1992, the hon. Member for Colne Valley (Mr. Riddick) said:
  "The state has a duty to protect the most vulnerable people in
  society."
  So why does he not support action on unemployment?
  Action on investment, skills and employment opportunity are fundamental to building the underlying strength of the economy. They were the policies that were

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  missing in the 1980s, when, in the absence of investment to expand capacity, boom inevitably led to bust. They are the essential components of success—policies that recognise that the crude free market economics practised by the Conservatives is not enough, and require the Government to assume their responsibilities to act on industrial, employment and education and training policies. But those policies are still absent in the 1990s. Without them, there are real worries about the durability of any recovery and about the threat of a return to stop-go.
  The Government's failure to address those issues has brought us to the problems we have today. The remarkable thing about the Chancellor and the whole Government is that, instead of addressing those problems, they continue to make extraordinary and extravagant claims about their record on the economy, as the Chancellor did in his lunchtime interview today. It is a record that they cannot justify.
  Nobody who listened to the claims made at the Conservative party conference about a fundamental transformation of the economy and a low inflation environment would ever have believed that an interest rate rise would come within two weeks. Inflationary pressures forced the Government to act. One would think that, after today, the Chancellor's claims about the economy would be more modest, but the Treasury press release just put out about the interest rate rise says:
  "The economy is performing exceptionally well."
  It describes the Government's record on growth as "unseen for a generation".
  Let me explain the troubling paradox for Conservative Members, because they will have to answer on it to their constituents. Everything that the Chancellor or the Prime Minister says should point to a feel-good factor in the economy, but when Conservative Members return to their constituencies, they find that people do not feel good; they feel insecure about their prospects.
  Let us look carefully at the difference between what Conservative Members say is happening to the economy and what is actually happening. For months, the Chancellor has been boasting of low inflation. For months, he has been saying that we should compare his record with that of previous Governments.
  When we examine the figures, we find that our inflation is not the lowest in Europe; it is almost the highest in Europe. Inflation is not below the European average; it is above the European average. Our inflation rate is 11th in the European league, and rising. That is how the Government's good news machine works—they compare only with their own record of a few years ago. They do not tell us that, in comparison with Europe, they are near the bottom of the league on inflation.
  Mr. Tim Yeo: Will the right hon. Gentleman confirm that inflation is now at less than one third of the best level achieved at any time by the last Labour Government, and that interest rates are now lower than at any time during that period?
  Mr. Brown: What I am pointing out—[HoN. MEMBERS: "Just say yes."' Let me tell the hon. Gentleman that, when we left government, inflation was below the European average and falling. Let me also point out that interest rates in Europe are as follows: Holland 3 per cent., Germany 3 per cent., Belgium 3.3 per cent., Luxembourg
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  3.3 per cent., Austria 3.5 per cent. and Britain 6 per cent. Is that a record of which to be proud? Are the Conservatives going to go around boasting that the Government have achieved everything they set out to achieve, and that we are 11th out of 15 in the European league? Are they going to fight the election on that? I do not think so.
  When one examines them, a pattern emerges in the statistics that come from Conservative central office. On interest rates and inflation, the Conservatives compare their record with that of the past. On growth and employment, they cannot use the record of the past, so they try to compare themselves with recession-hit Europe. At no point do they advance a case showing that they have a record on growth, employment, interest rates and inflation of which they can be proud.
  In other words, the Government always use comparisons carefully chosen for their own advantage. Through such a selective use of statistics, they suggest that Britain has been fundamentally transformed. If the Government were to choose to compare Britain's inflation and interest rates with European rates this year, and Britain's growth and employment rates with those of either Britain or Europe in previous years, they would find the truth—that they are near the bottom of every one of those leagues.
  Look at growth over the past 17 years. We should judge the Government on the growth rate, which is 1.9 per cent.—almost half what it was in the 30 years after the war. If oil is excluded, the rate is only 1.7 per cent. That is not the long-term improvement in our prospects claimed by the Government, but one of the lowest growth rates in Europe—11th out of 15 over the past 17 years, and bottom of the Group of Seven table. Once again, we can see the gap between Government rhetoric and reality.
  The essence of the Conservatives' campaign is to make comparisons with Europe only when Europe is in a period of recession, and, even then, only as and when it suits them to do so. The truth about the economy is that the Conservatives are economical with the truth. All their claims—
  Mr. Jonathan Aitken: Will the right hon. Gentleman give way?
  Mr. Brown: No, I am not giving way.
  All the Conservatives' claims are set out in today's briefing document, which tells us less about the underlying strength of the economy than about our temporary position in the economic cycle. The document barely mentions manufacturing, because the record since 1979 is that we lie 10th out of the 15 European countries. We are 11th in respect of job growth and 15th in respect of export growth—bottom or near the bottom of all those European leagues. Of course, the Government barely mention the matters I spoke about earlier—the actions that are necessary to build for the future: investment in people and industry.
  It is rather like an up-beat report from a football manager, desperately trying to avoid the sack by declaring that his team has been ahead at half-time in home games more often than not in the past 20 seasons and that it has won more corners away from home than other teams in the second half of the league. The Government omit to mention that, after they have been managers of the team for 17 years, no transformation of economic prospects has occurred, and that they hover on the verge of relegation.

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  If proof were needed that the figures are only about temporary stages in the economic cycle and not about the underlying position of the economy, we have only to look at what the Prime Minister let slip at the weekend. When interviewed on Sky Television, did he say that the economic successes that he was trumpeting were the result of a hard-won economic turnaround that would last? No, he called them
  "a benevolent phase in the economic cycle."
  That is a devastating insight—that just about every statistic used by the Government only reflects a phase in the economic cycle, and tells us little about fundamental underlying strength.
  How do we know that that is true? Because we have heard it all before. In 1986, before the election, the Government put up interest rates and then put them down again—they had a little flutter. What did the Chancellor, then a Minister in another Department, say in 1986? He said then what he has said today:
  "The real economy is doing better than it has for a generation."
  Where have we heard that before? He said then:
  "The outlook for managers is better than most managers can remember in their lifetime."
  The Government are making the same claims that they made then: that they had solved the problem of inflation; that they had got interest rates and mortgage rates down; that a fundamental transformation of the economy had occurred; and that prospects were brighter than for a generation.
  I can only say that the Government are at it again: the same deceit for the second time. There is legislation in the Queen's Speech to deal with second-time offenders. For these second-time offenders, we would certainly support a minimum sentence: a minimum of life in opposition, and life should mean life. [Interruption.] The hon. Member for Dover (Mr. Shaw) will regret his facetious remarks when he faces the electorate and is defeated.
  From his Conservative conference performance, it seems that the Chancellor is familiar with at least one school of economics—the Dolly Parton school of economics. Let me remind him of another sizeable body of economic opinion, which we might call the Nigel Lawson school of economics. That dictates that the bloated claims, the inflated figures, the exaggerated and grandiose pretensions of today will, with the passage of time and when the Chancellor has gone from office, shrink and shrivel to become remarkably slender and insubstantial—a shadow of that former vaunted glory. Now the Chancellor should know the fate that lies in wait for the overblown figures of the Government.
  This time, the Government have tried it once too often, and the British people will never trust the Tories on the economy again. The end result after 17 years is that we have moved not just from 13th to 18th in the world economic league, but to the bottom half of the European division as well.
  In one of his pamphlets, the Chancellor said that the test of whether an economy was doing well should be national income per head. National income per head in the richest country of Europe is £20,000; in Britain, it is less then £12,000. In France, it is 8 per cent. more; in
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  Germany 11 per cent. more; in Denmark 16 per cent. more. The Chancellor cannot dispute those figures, because they come not from European sources, but from the Government's own published competitiveness review.
  When the Conservatives came to power in 1979, Britain was above the European average for prosperity. Today, like it or not, we are unfortunately below average. We had double the prosperity of the poorest country; now we are only one third better off. We were 30 per cent. behind the richest country; now we are 60 per cent. behind. While the Government say that we are the enterprise centre of Europe, in reality we are in the bottom half—the poorer half—of Europe: not first for prosperity in Europe, not in the first five, but ninth out of 15 countries.
  In their 17 years, the Government have made the problems we face worse by failing to prepare for the future. A report out today from the European Commission analyses regions in Europe, and contains figures that were in the Government's regional trends survey this summer. In the main industrial regions of the UK, income per head is half that in regions such as Hamburg. Even in the most prosperous part of the country, the south-east, we are 30 per cent. behind Hamburg. Is it the Government's aspiration to boast, when we are ninth out of 15 in the European league?
  The watchword for British policy in the 1950s and 1960s was "managed decline". Now, in the 1980s and 1990s, the Government preside over mismanaged decline. Remember the slogan of 1983: "Britain great again—don't let Labour ruin it". As we now all know, the slogan was coined just as Britain's prosperity fell below that of Hong Kong and Singapore.
  Remember the false promise of 1987: "The next move forward"—just as we were making the next move backward, falling behind Italy. Now the slogan is "The enterprise capital of Europe". If anything sums up the hollowness of that claim, it is the Government's statement in the Queen's Speech a few days ago: not that we are the enterprise centre of Europe, but that they aim for Britain to be the leading European industrial power "in the medium term".
  It is an aim. It is not a statement of achievement or a promise of what we will have at the next election or just after it and it is not something for the present. The Government are admitting that we are not the enterprise capital of Europe, and that the only chance we have of catching up with France and Germany is in the medium term. If the Government had made that claim 17 years ago, when they first took office, it would have been a perfectly understandable undertaking. However, after 17 years, nobody will believe their claim that they will sort things out in the medium term.
  It is precisely because the Government have failed to sort out the fundamental and underlying problems of the economy that they have broken every election promise they made on tax, spending and borrowing. They promised to cut public spending, but, under their rule, it averages 42.5 per cent. higher than in 1979. They promised to cut taxes, but there is a higher tax burden now than in 1979. They said that they would eliminate borrowing and achieve a balanced budget, but the public sector borrowing requirement is £27 billion. National debt has doubled since 1990 under the Prime Minister's rule.

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  What are the Government going to say in their next manifesto?
  Mr. Barry Legg: Will the right hon. Gentleman give way?
  Mr. Brown: I will not give way again.
  Let me tell the House what was said in a pamphlet written by Mrs. Tessa Keswick, the Chancellor's closest confidant and special adviser until a few months ago. It is entitled "A Conservative agenda, proposals for a fifth term." She says:
  "The Government has made determined efforts to reduce public spending but has not succeeded … The Government's spending is a similar proportion of national income as it was in 1979."
  That is true, but the Chancellor cannot agree. She goes on to say:
  "Unfortunately, the overall tax burden has failed to fall. The relentless upward rise of public spending in Britain has forced up both tax and borrowing."
  Is that not a damning indictment of everything the Government said in 1979 when they took office? Is that what they will be honest enough to put in their election manifesto when the time comes?
  In addition to the 22 tax rises that we have had—the largest peacetime rises in history—including the rise in national insurance, VAT on fuel and everything else, Mrs. Tessa Keswick proposes that the Government should go into the next election with a manifesto promise to remove the zero VAT rating on food, water, books and magazines and domestic passenger transport. She says that it should be put in the manifesto. I suppose that means that they should tell the truth rather than leave it on the hidden agenda.
  How can the Chancellor deny that he supports those proposals when he is on the record, year after year, supporting the extension of VAT to food, water, books and magazines and domestic passenger transport? In fact, he wants to extend VAT to children's clothes as well. [Interruption.] If Conservative Members do not think that that is true, I can tell them what the Chancellor said. On Radio Nottingham in 1993—during this Parliament—he said:
  "I was in the House of Commons when we introduced VAT. If we could start again, we could have VAT on everything, which is the way they live quite comfortably on the continent and nobody complains about it."
  Hon. Members should know that there are more quotations from the Chancellor on this from just about every year. VAT, particularly VAT on fuel, will be a central issue at the next election. We hate VAT on fuel and will try to reduce it. The Chancellor likes VAT on fuel, and he wants to extend it. He would like to double it to 17.5 per cent., the highest level possible. We will cut it to the lowest level possible. Is that not an example of how we will deal with the problems of an unfair Britain?
  Let us remember all the central economic pledges of 1979. The Government promised to reverse national decline, but Britain has fallen from 13th to 18th in the world prosperity league and to ninth out of 15 in Europe. They claimed that industry would benefit with higher investment, but we now have the lowest share of investment of any of the major industrialised countries.
  The Government promised to lead in education. The Chancellor should explain why we have the lowest participation rate in higher education in the European
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  Union. They promised to cut unemployment. They said that Labour was not working. They should explain why unemployment, which was 1 million in 1979, is still more than 2 million. They should explain why they failed to meet their central promises to cut taxes, spending and borrowing.
  The Government's central promise in 1979 was that, somehow, they would rebuild British society. We heard the words of St. Francis of Assisi on the steps of Downing street—that where there had been discord, there would be harmony. When the Prime Minister came to power in 1990, he stood on the steps of Downing street and spoke of a nation at ease with itself, and of a classless society with opportunity for all. Last week, however, he had to agree with a courageous widow, Mrs. Frances Lawrence, that we now have a fractured society.
  After 17 years, the Government must accept their responsibility. There is no opportunity for all when executives of utility companies are paid telephone number salaries without any criticism from the Government, yet the same utilities leave pensioners unable to pay their fuel bills in the winter months. There is no opportunity for all when the Government divert resources to the assisted places scheme for a tiny minority of the population, when they could use the same resources to extend opportunity to every schoolchild in the country. There is no opportunity for all when the Chancellor agrees with the Prime Minister to make it a priority to abolish inheritance tax and capital gains tax, with half the benefit going to the richest 5,000 people in Britain, when a lower starting rate of tax would be fairer, and would encourage employment and opportunity.
  How can the Conservatives ever be the party of opportunity for all when they are responsible for the privilege and the sleaze, and they have done nothing to deal with the problems of the social fund and homeless teenagers? They were responsible for the poll tax as well as for VAT on fuel.
  Mr. Alex Salmond: Will the right hon. Gentleman give way?
  Mr. Brown: No, I am not giving way.
  Today is the last day of the debate on the Queen's Speech. Two weeks ago, at the Conservative party conference, the Prime Minister told his party and the nation that henceforth the Conservative party would display unity and single-mindedness, and that divisions and U-turns were all in the past. Last Wednesday, his policy on law and order lasted from 11 am to 4 pm. Yesterday, the new education policy lasted from 8.15 am until 10.21 am—the swiftest U-turn was made possible by the invention of the mobile telephone. As he faces the House this afternoon, the Chancellor must be relieved that Madam Speaker has banned the use of mobile telephones in the Chamber, and he cannot receive a telephone call from the Prime Minister.
  The Queen's Speech shows that, whether it is education, law and order or the economy, none of the problems that the country faces can be solved by the Government. Problems will be camouflaged, disguised, made the subject of U-turns, and exploited for narrow party political ends. The Government may even try to throw money at them, but they will never solve the fundamental problems. No amount of propaganda, no

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  Saatchi and Saatchi billboard campaigns, no selective use of statistics and no U-turns could disguise the fact that the Government offer the country only drift, which is damaging our national interest. They no longer have any purpose or direction in solving the problems we face.
  Nothing now can be sorted out by these men and women. Their 18th Queen's Speech cannot undo the damage caused by the previous 17. They should do now what they should have done long ago: they should put their record of failure before the British people, and face a general election which they will lose.
  4.35 pm
  The Chancellor of the Exchequer (Mr. Kenneth Clarke): It is always painful for the Opposition to have to talk about the economy. They do it only rarely in the House, on the ritual two or three occasions a year. We have an economy day in the debate on the Loyal Address and a debate on the Budget. Months go by and there is then another debate in the summer. The Opposition always refuse the offer of the business managers to have a debate on the economy in the spring. They never select the economy for debate. That is because it is painful for the Opposition to talk about the real economy.
  When we have the rare pleasure of listening to the right hon. Member for Dunfermline, East (Mr. Brown) make a speech about the economy, the terrible thing is that it is always the same speech. Over and over again, we have a meaningless strategy for investment. We hear also a meaningless strategy for employment. We have league tables, about which he becomes extremely muddled. The right hon. Gentleman produces more and more league tables, which he claims support his arguments. His speech, his gloom and his claims of disaster are entirely unchanging, but the real world is changing and the British economy is doing better and improving. We are producing the strongest recovery in western Europe, and the right hon. Gentleman and his party do not know what to say about it.
  Let us consider the news that is the background to the right hon. Gentleman's speech. Over the past few weeks, we know that activity, with the third quarter figures, is moving up again. It is obvious that growth is set to rise faster than in Germany and France for the fourth successive year. Trading figures for August reflected the best trading performance for nine years. Exports were referred to by the right hon. Gentleman; they are up by nearly 20 per cent. over the past two years.
  Unemployment fell by a marked amount and it is down to its lowest level for five and a half years. Consumer confidence is at its highest levels for eight years. The Labour party is finding all this good news hard to take, but there is more of it. There is more of it to come. It will come month by month all the way through to May 1997 and beyond.
  Labour Members are doing themselves no credit by seeking to deny all the obvious good news. The right hon. Member for Derby, South (Mrs. Beckett), an Opposition Front-Bench spokesman, said last week, to my absolute amazement, that the forecast recovery would be modest, short-lived and possibly jobless. I cannot think of a better description than that of the right hon. Lady's career as leader of the Labour party. On the economy, her comment is wrong, wrong and wrong again.
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  The right hon. Member for Dunfermline, East tries to produce—against a background that every member of the public knows is one of a strong and growing economy—a picture of gloom. He concentrates, as on his lecture tours, on investment. Since 1979, overall investment has grown faster in this country than in any other major European Union country. Whole economy investment has grown at about double the average rate of the 1970s. Business investment has risen by a third. Investment in plant and machinery has increased by about 50 per cent. Productivity has improved, because the quality of investment is good.
  Business investment is 7½ per cent. higher than it was 12 months ago. The Confederation of British Industry survey of investment in manufacturing plant and machinery reveals that the expectations of business are plus 18 per cent. The chambers of commerce survey produces a figure of plus 22 per cent. That is for good reason. Selective league table figures are nonsensical.
  The climate for investment is excellent because profitability is high, company finances are strong, company tax and interest rates are low by all historical standards, the economy is growing and there is demand.
  The right hon. Member for Dunfermline, East does not believe his own gloomy picture. He produced an extraordinary picture of investment intentions and said that that was why he was so gloomy. Faced with the news of the day, however—the increase in interest rates—the right hon. Gentleman said that he agreed with me that an increase in interest rates was called for. What kind of a shadow Chancellor of the Exchequer do we have? He describes an economy that, on his own account, is in decline and in crisis. Is he tightening monetary policy in the face of the dreadful picture that he describes? How is he proposing to set interest rates if he ever becomes Chancellor of the Exchequer? Will he look up a league table and see what Luxembourg is doing? That is a preposterous position, and he poses a serious threat to the economic recovery that is under way.
  Mr. Malcolm Bruce rose—
  Mr. Clarke: The only people who could doubt the health, strength and breadth of the recovery are either mad, dead or sitting on the Opposition Benches. On that note, I give way to the hon. Member for Gordon (Mr. Bruce).
  Mr. Bruce: The Chancellor will remember that the Liberal Democrats warned him when he cut the rate on 6 June that he was wrong and that he would have to reverse the cut. Does he acknowledge that he was wrong, and does he accept that, if the Bank of England inflation report to be published next week says that it still believes that he will not hit his inflation target, he may have to increase interest rates again?
  Mr. Clarke: I shall come back to interest rates in a moment. I remain confident about our inflation forecast and I have set policy to achieve it. I have said and done that consistently, and I have delivered low inflation.
  We have been hearing about U-turns and changes of policy, but the hon. Member for Gordon has changed his position even today: early this morning on the "Today" programme, he gave a confident prediction to the world that I would not raise interest rates; that was his expert

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  forecast. He said that I ought to raise them, but by lunchtime he was on the air criticising me for doing so. Half an hour later, the right hon. Member for Dunfermline, East was on the air, giving the Labour party's first solid promise to reduce VAT on domestic fuel. That has lasted until half-past 4, and now he says only that he will "try to".
  The Financial Secretary to the Treasury (Mr. Michael Jack): It will be gone by 10 o'clock.
  Mr. Clarke: Indeed, it will be gone by 10 o'clock and the windfall tax will be back. Economic policy does not require that approach; it requires decisions. The Labour party does not take decisions; it would be incapable of taking decisions on any of the great economic issues of the day—inflation, tax, public borrowing or public spending.
  Mr. Salmond: On interest rate policy, in the past 15 months, since the current Secretary of State for Scotland took office, Scottish unemployment has had the worst trend in the United Kingdom. Does the Chancellor believe that the Scottish economy is overheating; if not, why is he tightening monetary policy in Scotland?
  Mr. Clarke: Figures about the trend in unemployment in Scotland over the past 15 months are so blatantly selective as to be utterly meaningless. I am glad to say that the Scottish economy has done extremely well in the course of the recovery. Scotland is one of the strongest regions in the United Kingdom in terms of expansion, and the steps that I have taken will ensure continuing growth for Scotland for many years to come, and that is the sole aim of policy.
  I want to move on to a little policy and to bring us back to the real world of a successful economy that will strengthen for many years to come. So far, we are into the fifth year of recovery. As I have said, I have taken and will continue to take every step that is necessary to avoid all those economic pitfalls that, as all hon. Members will remember only too well, have brought to an end every previous recovery for 30 years.
  What I said in 1986 was cited at me; it was right. In 1986, we were performing better than we had for a generation and better than the rest of western Europe; we were on course for a healthy recovery, but monetary policy went wrong and we went into a recession that was deeper than elsewhere. I take the decisions that I do to ensure that that does not happen again. We are back with all the benefits of our supply-side changes, and this time they will last—as long as we have a Conservative Government.
  I shall sustain the brightest economic prospects for a generation by keeping inflation down to levels that will allow us to compete and to grow for years to come. So far, I have delivered the best inflation record for nearly 50 years, but I am determined to go on seeking to establish new records.
  We are on course to deliver our inflation target of 2i per cent. or less next year, but I am not simply aiming to deliver the target next year: decisions that I take today are aimed at the position of a Conservative Government in 18 months' or two years' time. We have to go on delivering year after year. That is why I decided to put up interest rates by a quarter per cent. this morning.
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  Let us cut through the waffle that we hear from the right hon. Member for Dunfermline, East and decide why it was right to move rates now—because, as far as I can see, most people agree that it was. The economy is extremely healthy. It is growing as I predicted it would and that growth is strengthening as the year goes on. The immediate inflationary pressures remain subdued. Producer price inflation remains very low—producer input price inflation is still negative—and earnings growth remains modest. The economy is clearly set to grow by more than 3 per cent. next year, as I think everyone will agree, and it will go on growing rapidly.
  My decisions have to be based on judgments on how we keep growth going for 18 months or two years ahead, when we will still have a Conservative Government in power. At that time, I want growth to be motoring steadily, more new jobs to have been created and Britain still to be competing, and that is why I have decided to make a small increase in interest rates now—neither of my major critics has the nerve to offer a squeak of disagreement—to ensure that we continue to deliver healthy, sustainable growth and to meet our inflation target.
  I have done what I have always done when I have changed interest rates and made monetary decisions. I intend to look ahead and to stay ahead of the game. If I had waited for the recovery to show signs of inflationary pressures, it would have been too late to act. We would have missed the opportunity, and that is what we have done in the past. Because I move in advance, I am able to change interest rates by only a quarter of 1 per cent. and that is why we can be confident that rollercoaster interest rates are a relic of the past unless we return to a Government where the right hon. Member for Dunfermline, East takes the approach to monetary policy and the state of the economy that, to my total alarm, he described only a few moments ago.
  Mr. Denis MacShane: Is not one rollercoaster that has gone up and up the national debt, which has doubled since 1990, so much so that British citizens are paying £25 billion a year to the Chancellor for his economic incompetence? That is a tax of £1,000 on every taxpayer, which we are paying for his flippant, clownish mismanagement of the economy.
  Mr. Clarke: We have one of the lowest levels of debt in relation to gross domestic product in western Europe. I shall come later to the tight fiscal policy that I am running to ensure that we control that level of debt and get back towards a balanced budget. Moreover, the level of debt in relation to our gross domestic product now is far lower than it was at any time when we had a Labour Government in the 1970s. It is nonsense to produce those preposterous figures, as the hon. Gentleman did in an earlier debate a few days ago. Proper fiscal policy and control over debt, combined with monetary policy, are the key to the sustained recovery of our economy.
  Mr. Gordon Brown: First, the reduction of VAT on fuel will be in our manifesto. Will it be in the Chancellor's? Will he do that in the Budget? Secondly, can he explain why he predicted 3 per cent. growth this year? Now that growth is not even 2.5 per cent., but perhaps less, he has an inflationary problem which has

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  forced him to act. Will he accept that the slowness of the recovery of investment since the recession is a big problem that he must face and take action on?
  Mr. Clarke: The promise on VAT on fuel is back again by 4.47 pm. Until today, the right hon. Gentleman has said that he cannot say anything specific about tax, because he wants to look at the books. At last he has got around to reading the books. If he wants to tell us about tax, can he tell us who will pay the 50 per cent. higher rate and at what level they will start paying it? How will he introduce his 10p standard rate of income tax? Who will pay the windfall tax, be it £3 billion or £10 billion, and what effect will that have on electricity, gas, telephone and water bills? If he is in a mood between now and, say, 10 o'clock this evening to produce some policies on tax, let him start answering some serious questions. He is trying to change the subject from the real economy and inflation.
  Mr. Brown: No. Our manifesto will contain proposals for the windfall tax and proposals to cut VAT on fuel. Will he tell us whether he still agrees, as he said he did in 1993, with the extension of VAT to books and newspapers, travel and children's clothes—yes or no?
  Mr. Clarke: I produce Budgets so everybody can see my tax proposals, but we have only an inkling of the right hon. Gentleman's proposals. He might have made those points in his speech, but I am delighted that he is volunteering them now. Will he say to which industries the windfall tax will apply? Will it apply to gas, electricity and water in Scotland and England? Will it apply to telecommunications? How much does he intend to raise—£3 billion or £10 billion?
  Will the right hon. Gentleman answer the question of my hon. Friend the Member for Dover (Mr. Shaw), who referred to equivalence in terms of VAT? I have not heard about that figure before—a 20 per cent. rate of VAT—but it sounds about right. The right hon. Gentleman's patent refusal to answer that question shows that he also feels that the figure is about right. My hon. Friend was right. I compare the windfall tax with income tax, and it equates to about 2p on income tax.
  If the right hon. Gentleman does not answer questions on the windfall tax, how does he expect us to take him seriously? He proposes to raise all this revenue, and we hear about the spending promises of his colleagues, but he will not answer a solitary question about the windfall tax that drifts in and out of his speeches on the economy. He usually calls it a windfall levy to avoid being too direct.
  Mr. Brown: The Conservative party has now become the "defence of the utilities" party. People in the country will understand exactly what is happening. Does the right hon. and learned Gentleman agree with me that the privatised utilities have made excess profits, especially during the recession, and that the case for a windfall tax on the utilities is supported overwhelmingly throughout the country?
  Mr. Clarke: We defend the people who work in those utilities. We defend the small shareholders in successful
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  companies. Above all, we defend the customers of the companies that supply electricity, gas, water and telephone services. They will notice that the right hon. Gentleman never answers any questions about a tax that will increase costs and result in losses for many people. The cost will fall on all those people whom the Labour party used to call the stakeholders in the utility companies, and whom he now wants to tax.
  Mr. George Foulkes rose—
  Mr. Clarke: I shall not give way. I want to get back to the point from which the right hon. Member for Dunfermline, East is trying to distract us—what is happening out there in the real economy and how policy is being pursued. I have already dealt with the fact that, above all, we seek to ensure that we hit an inflation target. The right hon. Gentleman does not even have an inflation target. He has the nerve to attack me because he is not sure that I will hit the 2½ per cent. inflation target. This country has never combined such low inflation with a recovery.
  The right hon. Gentleman must watch me taking decisions with which he reluctantly agrees and which are keeping us on course. I have achieved such a low inflation climate that I am able to move interest rates by small amounts. I bet that no hon. Member can remember when we last saw an increase in interest rates of only a quarter of 1 per cent. Past Chancellors would have given their eye teeth to live in a world where they moved interest rates by only 25 basis points, or a quarter of 1 per cent. We can all remember rates going up by 1 per cent., half a per cent. or 2 per cent.
  My approach to monetary policy of keeping ahead of the game has enabled me to keep interest rate movements within a narrow range, and it has produced the healthiest and strongest economic recovery in western Europe.
  Mr. William Cash: Is my right hon. and learned Friend aware that, in the past couple of weeks, the European Commission has introduced radical proposals for a uniform rate of VAT throughout the European Community? Does he agree that we would veto such proposals, and that it is perfectly clear from what the right hon. Member for Dunfermline, East (Mr. Brown) has said that the Labour party would not?
  Mr. Clarke: I am not in favour of a uniform rate of VAT. I am sure that we would be against that, as I am sure would most other member states. No one will go to a uniform level of VAT throughout western Europe. I am in favour of minimum levels; otherwise, attempts are made on either side of a border to win markets in particular goods by attracting customers.
  I am in favour of some approximation of taxes that bear on sales, such as excise duty, because that would help many industries in this country. I firmly believe that taxation should rest in the hands of member states. It always will, and any British or German Minister, and most of the other Ministers in western Europe, would veto any proposals to the contrary.
  As I said, our recovery is stronger than that of any of our major western European competitors. It is becoming balanced and sustainable. The whole point of our policy is to keep it that way.

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  We are generating growth without inflation. We are generating growth without a balance of payments crisis—something which damaged this country so much in the past. We are generating growth while keeping relatively low interest rates. Too often in the past, we have allowed recoveries to run out of control. We will not allow that to happen again.
  One of the guidelines which I have laid down throughout my chancellorship is no return to boom and bust. The public can see that that is what we are delivering. They can also see that the Opposition can offer only the threat of boom and bust, in equal proportions, if they run the economy in the way indicated by the right hon. Member for Dunfermline, East.
  Mr. Barry Sheerman: If the Chancellor wants to know about the real economy, he should talk to some of our manufacturing sector which, since 1992, has suffered a massive recession. Now, after just one year of good times, manufacturing is falling back; it is heading back to another recession. Is that the sort of management of the economy of which the right hon. and learned Gentleman is so proud?
  Mr. Clarke: We have had five years of recovery. Manufacturing was strong at the beginning of the recovery. Of course, there has been a slowdown, just as there has been a slowdown in continental Europe. Now, manufacturing is picking up again as the stocks that built up earlier in the year are reduced. There is no point in the hon. Gentleman and me exchanging tales about different manufacturers, although I meet manufacturers who certainly do not share his views. If he looks at the surveys done by the Confederation of British Industry and talks to the Federation of Engineering Employers, he will find that the climate among manufacturers is one of considerable optimism for the foreseeable future. That optimism is based on what we have already achieved and what we will preserve.
  Not only will we not throw away the best prospects for economic growth that we have seen for a generation by not letting inflation destroy it, but we will not throw away those prospects by letting public borrowing get out of control. Public borrowing is coming down and I shall keep it coming down towards balance over the medium term. Again, that is a clear policy objective that is not matched by the right hon. Member for Dunfermline, East, who has no such objective in this key field of economic policy.
  The public sector borrowing requirement is now half what it was three years ago. Throughout the period of the last Labour Government, it averaged almost twice as much as it is now. The hon. Member for Rotherham (Mr. MacShane) intervened earlier about the national debt. National debt, as a share of national income, has been lower every single year under this Government than it was for any single year under the last Labour Government. At the beginning of the debate, the right hon. Member for Dunfermline, East spoke about national debt. If our average deficit since 1979 had been as bad as it was under the last Labour Government, our national debt would now be twice as high as it is—£650 billion, or more than 90 per cent. of gross domestic product. That is what has happened in many continental countries, which are now trying to recover from that.
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  It is obvious that, if there had been a Labour Government in the late 1970s and the 1980s, Britain would be in the same public debt mess that half of continental Europe is in now. Instead, our debt is among the very lowest in the European Union; under Labour, it was among the highest. The right hon. Member for Dunfermline, East spreads scare stories about public finances. He tries to prepare people, in the most alarmist way, for the Budget. He has spread a scare story about a shortfall in tax revenues, by looking back at tax forecasts and comparing them with the revenue variants. The fact is that, because of profitability and growth, tax revenues are rising faster than public spending. That is why public sector borrowing is falling. That is the key element to hold on to in looking at the state of the public finances.
  Put another way, revenues are rising slower than activity. That has surprised both me and my forecasters. However, although revenues are rising slower than activity, spending is rising even slower than revenues. The Government are committed to sound, sustainable public finances—and we are on course to deliver just that. We will keep Government borrowing coming down.
  I do not intend to give away the brightest economic prospects that we have faced for a generation by giving in to the siren calls for higher public spending—calls that will come at me and at the right hon. Member for Dunfermline, East from the Opposition Benches over the next few months.
  Mr. Thomas Graham: Is the Chancellor telling us that, after 17 years, my constituents are once again going to face potholes in the road, schools falling down and empty hospital beds that could be filled with patients who need health treatment? Is that the type of system and society that you are expecting my constituents to face when you claim that Britain is booming and doing well? Tell that to the unemployed people in my constituency. Tell that to the elderly people who are waiting for a hospital operation. Tell that to the young people in my area who cannot get full education because the Government have not provided the wherewithal. Chancellor, you should be ashamed.
  Mr. Clarke: I apologise—
  Madam Deputy Speaker (Dame Janet Fookes): Order. I remind the hon. Member for Renfrew, West and Inverclyde (Mr. Graham), not for the first time, that he should address me and not the Chancellor direct.
  Mr. Clarke: I apologise to the hon. Gentleman for the fact that my NHS figures may relate to the English NHS rather than the Scottish NHS, but in England he will find that, throughout the period of our government, we have increased the level of spending on the NHS by about 70 per cent., in real terms over and above inflation. We have committed ourselves to continuing to increase spending on the NHS in real terms, year in year out. As far as I am aware, that is something to which the Labour party will not commit itself, and, anyway, it is something that the Labour party failed to deliver when it was last in office, because it is the only party in office since the war that has ever cut spending in real terms on the NHS in any single year.

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  We have run an enterprise economy that first generated the wealth to provide the finance for key public services. That is what is put at risk by the prospect of a Labour Government and it is that which puts at risk the public services in Renfrew, West and Inverclyde.
  I will achieve the target that I have set to get public spending down below 40 per cent. of national income. We will get it down there and we will keep it there. Again, the right hon. Member for Dunfermline, East has no such target and he is surrounded by people, including the hon. Member for Renfrew, West and Inverclyde (Mr. Graham), who will make it utterly impossible for a Labour Government to control either public spending or public borrowing and, therefore, taxation, and, therefore, the continued growth of the public economy.
  Mr. Hugh Dykes: Before that exchange on the NHS, my right hon. and learned Friend referred to the extremely encouraging signs of a reduction in the deficit and the rise in tax revenues, but he said that the rise in those revenues was somewhat slower than expected. Is it not even more encouraging that, by the end of the fourth quarter this year, the rise in tax revenues will accelerate, so the deficit will come down even faster?
  Mr. Clarke: That should happen, but we have to set policy just to ensure that we deliver sound public finances, because that is necessary to ensure the continued growth of the economy and the healthy state of affairs I have described. Of course, if those revenues accelerate the recovery, we will be able to keep our commitments to the great public services—that we Conservatives ensure that the real economy creates the wealth first and then we devote it to those great public services.
  The revenues are rising, although our intention is to lower taxation because we believe that that, too, is essential to the growth of the real economy.
  Mr. Gordon Brown: Those are exactly the statements that the Chancellor and his colleagues made in the early 1980s. Can he now explain to us why it is that the share of national income for public spending is exactly what it was in 1979, and why people are paying a higher share of their income in tax than in 1979? Why, with all the right hon. and learned Gentleman's great statements, has the action been exactly the opposite of what he and his colleagues have said?
  Mr. Clarke: The proportion of GDP is almost exactly the same in both cases, as the right hon. Gentleman has said, but as my hon. Friend the Member for Dover has already said, when Labour left office there was a huge unsustainable level of Government borrowing on top of taxation, which we had to tackle. That is why taxation reached its peak in 1981, as we sorted out the mess that Labour had left. Now, the level of taxation and that of public spending is far below those of 1981. We have maintained those levels, whereas they have risen much higher in the rest of western Europe, both as a proportion of spending and as a proportion of taxation taken by the state.
  We have a Government who are plainly on course to reduce the burden of spending and the burden of taxation and we have clear, measurable commitments to do so. We
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  are faced with the threat of a return to a Labour Government of high spending, high taxation, high public borrowing and pressures upon them, of which we have just heard from the hon. Member for Renfrew, West and Inverclyde, which will ensure that they will take us right back to the kind of mess we had in the late 1970s.
  Mr. Brown: If all the problems were caused in the 1970s, why is it that, since 1992, we have had the biggest peacetime rises in taxation in our history?
  Mr. Clarke: What we have had since 1992 is the fastest growth in western Europe, a huge fall in unemployment and a recovery that is combined— [Interruption.] The right hon. Member for Dunfermline, East may wish to wave away the measures that created the current economic conditions. It is true that we have got where we are today with no thanks to the Labour party, which has fought every essential measure that we have taken to take this country from recession to recovery. As far as I can see, the Opposition would fight them still and would take us back to recession again.
  We are committed to our 20p standard rate of taxation on income tax and people believe us. We are committed to the abolition of the inheritance tax and capital gains tax. People trust us to deliver that because they see our record. The Labour party, certainly on the strength of the speech we have heard today, is not capable of being trusted with any of those measures.
  I keep challenging the Opposition, and I have had some success this afternoon, to come clean and to level with the people. Labour should have a serious debate with us about Labour's tax plans, Labour's inflation targets and Labour's views on interest rates other than just responding to the day's news. How about some openness? How about some honesty from the Labour party about precisely what its approach would be to the real economy if it got into government?
  Mr. Terry Lewis: Honesty?
  Mr. Clarke: Well, it is no good the Leader of the Opposition talking all his empty pious phrases at the Labour party conference. The one memorable thing I can recall from the right hon. Gentleman's conference speech was his amazing phrase about a covenant with the British people. That strikes me as a bit of a crib from Newt Gingrich for a change—the contract with America put into slightly more Scottish language. It is a rather odd time to switch from cribbing from Bill Clinton to cribbing from Newt Gingrich. Instead of tub-thumping sermons from us, one gets decisions today. Instead of messianic waffle, one gets the results that I have described, and that speak for themselves, and they are not challenged by what the right hon. Member for Sedgefield (Mr. Blair) said.
  The threat to our position lies with the right hon. Member for Dunfermline, East and his friends. Labour needs to tax more as night follows day. It needs to tax more to pay for the new spending to which it is now committed.
  Let me quote from the conference speech of the right hon. Gentleman. In the course of one speech—not one he has repeated here yet—he promised nursery education for all and universal education for all after the age of 16 and he said that he would make available accessible and

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  affordable child care. He said that the benefit tapers must be addressed. He said that the Labour party would implement the social chapter. He talked about creating regional development agencies and introducing, by law, a statutory minimum wage. They are only some of the things that he promised in his speech in front of his party's supporters.
  The right hon. Gentleman would not be tough on public spending—he is a soft touch on public spending faced by lobbies from the Labour party. What chance is there that he will control his colleagues when he cannot even resist the temptation to make expensive promises himself? He is like every other Labour politician: they go into politics to spend more, that is what they do, and it is in their blood.
  Today, we have had enough of the Opposition's changing policy on VAT and fuel. What about the 10p starting rate of income tax about which the right hon. Gentleman has not risen to answer any questions? At the time, it struck me as sheer desperation—an attempt to outbid a tax-cutting Government with a totally incredible and wildly expensive commitment of his own—£9 billion-worth of desperate electioneering promise. The right hon. Gentleman may shake his head. I accept that he was helpful a few moments ago, although I do not remember any particular answer to any question we asked about the windfall tax, much as my hon. Friend the Member for Dover and I tried.
  Let me try the right hon. Gentleman on the 10p rate. They are straightforward questions, and he might have thought about just some of them already. Will it apply to everyone paying tax at the 20p rate now? That is a quarter of all taxpayers. If not, will it apply to half those who are paying the 20p tax? [HON. MEMBERS: "Come on, answer."] Will it apply to the first £1,000 of income liable to tax? There is no point in the right hon. Gentleman making taxation pledges and then being utterly unable to answer questions about a proposition that would cost billions of pounds.
  There is only one 10p tax that we know for certain the people would get from Labour. It is the extra 10p on the top rate of tax that the right hon. Gentleman and his colleagues want and which the right hon. Member for Sedgefield will not allow them to talk about. Who will pay the 50p rate and at what level will it start? Who does Labour regard as the wealthy who will make this contribution to its spending plans? The right lion. Gentleman is supposed to be disagreeing with his colleagues on these matters, but I do not understand how they can have disagreements when they have no policies or when no details have been worked out. How have they moved to that elevated state if none of these points can be answered?
  We have had a go at the tax on utilities, the so-called windfall levy. [Interruption.] There is no point in laughing. What is difficult about a question as to whether it will apply to telecommunications or to Scottish water as well as to English water?
  Mr. Gordon Brown: Scottish water?
  Mr. Clarke: They are all privatised, but not Scottish water. Scottish electricity generation is privatised. The right hon. Gentleman has said that he will not impose the levy on non-privatised Scottish water. That is good. Let
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  us ask him a difficult one. What about British Telecom? The Opposition are in a shambles. They are committed to £3 billion or £10 billion of spending and there is to be a one-off windfall tax to pay for permanently recurring revenue commitments on policies to which the right hon. Gentleman has signed up. I shall not ask about the tartan tax, about which the Opposition are never able to answer questions and which apparently is to go to a referendum.
  What about the London tax? A new Greater London authority is to come back with tax-raising powers. Are the people of London to have a referendum on that? Will they be told how much it might cost? What about the telecommunications tax to pay for the network? The Labour Front-Bench spokesman was careful in describing that because he said that it was not a tax but would be a modest percentage paid by subscribers to the telephone network. If they pay that modest percentage without a choice at the demand of a Labour Government, it will be a tax, and it will be paid on top of whatever amount the windfall levy produces.
  Unlike Labour, we say what our policies are. We stick to them and deliver the results and the public can see that we do that. Our policies are designed to sustain the strongest and longest economic recovery in Europe and they are doing that without inflation or overheating. We shall ensure that the recovery is for keeps. We are in our fifth year of recovery and already unemployment is down by almost 1 million and exports have gone up by nearly 20 per cent. in two years. Inflation is at its lowest for a generation and living standards are rising fast.
  We have it in our hands to transform the future of our nation for the better and for good, to break out of the cycles of the past and to raise the nation's sights. We can overtake our competitors and make Britain truly the strongest economy in Europe. In the rest of Europe, people know only too well that that is where we are headed. The only thing that stands in the way of that bright prospect for our country is the possibility of a Labour Government. Their future would not work, but ours does. That is why next spring, after further months of healthy recovery, the British people will make their choice and back the party that is consistently delivering British economic success of a kind that has not been seen before.
  5.13 pm
  Mr. Gerald Kaufman: I hesitate to criticise the Chancellor, partly because he is one of the few recognisable paid-up grown-ups in a Government of adolescent amateurs and also because he made some nice remarks about my book, "How to be a Minister", which will be printed on the jacket of the new edition which is to be published in February. It therefore affects me a little to make some remarks that are not entirely complimentary about him, although he is welcome to quote what I say on the back of any book that he publishes.
  To a large extent the Chancellor has been speaking about the past, and when he has looked to the future it was only in the short term. He has made an assumption, which for the purposes of his barnstorming speech he had every right to make, about a Conservative victory at the election and he spoke about the first 18 months or two years. The Chancellor's policies and the Gracious Speech are so lacking in substance because they do not deal with the economic and industrial future of our country beyond the next two or three years—beyond the next Parliament and into the next century.

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  The Chancellor believes in Europe and believes, by his party's standards, that he is pursuing reasonably sensible economic policies, but he should have looked towards establishing an industrial substructure that will enable Britain, regardless of which party is in power, to sustain growth and prosperity without inflation. At the end of his speech, the Chancellor spoke of his wish to overtake our competitors, but his words rang particularly hollow. Neither in his speech nor in the Gracious Speech was there any planning for the future long-term security and prosperity of this country. That is a Government obligation, regardless of party.
  The Chancellor spoke about the real economy, and that is what we ought to be discussing because it is what matters to the people. It certainly matters to my constituents, huge numbers of whom live in deep poverty, and it ought to matter to the electorate as a whole regardless of their economic circumstances.
  I strongly support the Opposition amendment because it refers to investment that will increase high technology. It is on such technology that our future and that of any developed industrial country must depend. It is depressing that the Chancellor, who is among the least foolish members of his party and Government, is not looking at the way in which technology is advancing in other countries; in this country it is not advancing sufficiently or being planned for by either the right hon. and learned Gentleman or his colleagues. I am speaking about progress in advancing Britain's future through the information super-highway.
  Hundreds of thousands, perhaps millions of jobs are at stake because, as traditional heavy manufacturing declines, these other industries are taking over. There are billions of pounds' worth of exports on which interest rates and the exchange rate depend and on which the Chancellor's championship, which I share, of keeping the options on economic and monetary union and the single currency open also depend. Investment in high technology and plans to promote it are preferable to the Government's policy of turning the United Kingdom into the low-paid sweatshop of the European Union, for that is what we are becoming. I am sure that the right hon. and learned Gentleman does not like that, but he is doing nothing to stop it.
  Dr. Keith Hampson: Some simple statistics seem to be relevant. As the right hon. Gentleman knows, the Select Committee on Trade and Industry has been considering the cable industry. There has been unprecedented investment. Billions of pounds of investment are coming into Britain from American companies which see a future here. Also, we are spending a higher proportion of gross domestic product on primary, secondary and higher education than France, Germany or Japan. How does he reconcile that dramatic turnaround from what was happening under the Labour Government?
  Mr. Kaufman: One of the problems with these debates and, frankly, one of the reasons why I am fastidious not only about taking part in them, but even about attending them, is the stale sort of exchange about what was happening in the 1970s under the Labour Government. We are talking now about the 21st century and I do not
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  want to drag in even what the Labour Government did and what I did as a Minister to expand industry, to create British Telecom, which we prepared for, and to build British Aerospace, which was a dying airframe industry. That is not what I am after, but in response to part of the hon. Gentleman's intervention I will certainly talk about the cable industry because I agree about its primacy. What I am not happy about, however, as the hon. Gentleman will hear if he continues to listen to me, is the reliance on overseas investment to expand an indigenous British industry which should have indigenous British investment.
  Developments are taking place as technology advances. Unless there is a specific guiding of policy by Government—I am not talking about public ownership or even state interventionism of the George Brown kind 30 years ago—the developments to which the hon. Member for Leeds, North-West (Dr. Hampson) has referred will be in the hands of foreign, mainly north American, companies and a huge opportunity will be lost to Britain for ever.
  As we debate this year's Queen's Speech, the technology of television is advancing. There is now a seamless link between television, computers, newspapers and telephones. On Friday, BSkyB, an enormously profitable and successful company, will make a decision on the technology accompanying digital television that will decide the future of all digital broadcasting in Britain. Yet the Government are either taking no action or holding back progress which affects the nation's prosperity.
  In the past few days. Cable and Wireless Communications has been formed from the Cable and Wireless company and a collection of cable companies that are subsidiaries of United States conglomerates. We now have a £5 billion conglomerate and there is no guarantee that through that company, which will be a major competitor, British-produced material—what we are good at and what can create more jobs—will get a fair chance on Britain's cables.
  Despite the commitment in the Queen's Speech to what the Government call getting rid of unnecessary burdens on industry, it is clear that the wholly British telephone company BT will face even stronger unfair competition. Instead of doing something about that and removing the restraints, the Government are deliberately maintaining them so that BT is hampered from competing with vastly wealthy American and Canadian conglomerates.
  Cable and Wireless Communications, in which both United States and Canadian telephone companies will be represented, will be able to undercut BT on telephone provision while having a monopoly on cable broadcasting. The Government believe in markets and competition, but because of their foolish decision BT is excluded from broadcasting to two or more homes simultaneously. American telephone companies, however—the companies that have come into Cable and Wireless Communications, including Nynex and Bell Canada, are all American—are able in Britain both to offer telephone services and to broadcast images. BT, however, is hampered from competing in the telephone sector by the fact that it is forbidden by law to broadcast to two or more homes simultaneously.
  BT is discussing with BSkyB forming a partnership to supply programmes down BT telephone lines. If that comes about, as it may do—both sides would be sensible

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  to do so—it will be one of the most powerful partnerships in the world. The News Corporation Ltd. is an incredibly powerful organisation and BT is hugely powerful, wealthy and profitable. BSkyB would also supply programmes for the cable services of Cable and Wireless Communications, so BSkyB would be in a dominant position in supplying television programmes through its satellite programmes, through cable and through whatever arrangement it is able to make with BT.
  Where at that point would the British Broadcasting Corporation, Britain's most famous brand name, be internationally? Where would it be in its own country, let alone competing throughout the world, as it should be, with its talent, skills and huge library? It would be a postulant client to BSkyB and to Cable and Wireless Communications. It would be hoping to sell them its programmes, without any commitment on the part of the broadcasters based on the binding arrangements of a partnership.
  As for the digital technology on which the BBC places so much reliance, even if Friday's decision by BSkyB generously allows one box to have both terrestrial and satellite digital broadcasting, the BBC will be living on borrowed time because terrestrial digital television is obsolescent. It is dying away, just as terrestrial television is dying. The future is in cable, in optical fibres arid in interactive and on-demand services, in addition to services that are supplied free to air. The whole ethos of public service broadcasting is at stake, together with the future of the BBC as a production organisation. Hundreds of thousands of jobs are involved, as are the many more jobs that could be created as the channels multiply next year.
  It is ludicrous that we should be facing this huge challenge from the American and Canadian companies in Cable and Wireless Communications and from BSkyB with the BBC looking totally to the past and appearing to believe that it can create a fruitful future for British communications on the basis of an impertinent and unrealistic demand for an above-inflation increase in the licence fee, which in any event would not supply much money. In addition to the BBC's ridiculous demand for an increase in the licence fee, the best that it can do is to find candle ends from internal savings and hope to receive money from the private finance initiative to fund what I repeat is in any case an obsolescent technology.
  The BBC has formed links with Flextech in the UK and with Discovery in the United States, which are American subsidiaries. I acknowledge that that is better than nothing, but those deals are paltry compared with the formidable competition that the BBC faces from BSkyB and cable television. The BBC announced yesterday that its planned Flextech channels will create, as a rival to MTV, a television version of Radio 1, but that can scarcely be regarded as the cutting edge of public service broadcasting.
  The BBC is an enormous asset to this country, not simply in prestige but in generating employment. Unless it can form a partnership with a major broadcaster, I believe that its days are numbered. The BBC will dwindle into a British version of the American Public Broadcasting Service, and its precious heritage will waste away with a diminishing audience—which will continue to diminish exponentially. A hugely profitable, productive and industrial future—we are talking perhaps about the most important industry that we possess—will be frittered away.
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  I am glad to say that the Labour party has a constructive policy for the Internet. Last year, my right hon. Friend the Member for Sedgefield (Mr. Blair) announced one instalment of the policy at the Labour party conference, and he announced another instalment at our party conference at the beginning of this month. But we cannot afford to wait even the six months before a general election. I have spoken to the Prime Minister's office and to successive Secretaries of State for National Heritage about the fact that this is a national issue and not a party issue, and that we should be doing something about it now. We cannot afford to wait six months until, as I am perfectly confident, a Labour Government are elected.
  The BBC must be told by the Government to enter into talks with BT, with Cable and Wireless Communications or with both those giants to discover whether, even at this late stage, it can be included in a partnership.
  I shall state very clearly that I believe that the current administration of the BBC—Bland and Birt, who have shown themselves to be far from adequately fitted for their vital responsibilities—should be cleared out and replaced by business-minded people who will do the job that must be done and which is currently not being done. When Sir Christopher Bland was appointed chairman of the BBC I said to myself, "That is ideal—a Tory with a background in commercial television; he is the man to take the BBC into the future." In fact, he has gone native so fast that he makes his predecessor seem like a dynamic socialist.
  The restrictions on BT must be lifted, and they must be lifted soon. As the Chancellor of the Exchequer knows, it has been some years since I graced my party's Front Bench—for what good that ever did. As Chairman of the National Heritage Select Committee, however, I urge Opposition Front Benchers to facilitate the passage, without opposition, of a Bill to remove the restrictions on BT, should the Government introduce such a Bill during this Session. I believe that most hon. Members would agree with that support. We have a major and crucial opportunity to expand our industry and our economy by assisting and stimulating the expansion of what could be our most important industrial sector as the next century begins and progresses.
  Directly and indirectly, satellite television has already created 54,000 jobs, and cable television has created a further 33,000—and the potential for job and wealth creation has scarcely been tapped. Those are the jobs and the technology of the future, and we have the sophisticated workpeople to do those jobs. That is why I am happy that my colleagues on the Opposition Front Bench, whom I praise, have tabled an amendment to the Queen's Speech giving due emphasis to modern technology and I shall have great satisfaction in voting for it.
  Mr. Harry Barnes: On a point of order, Madam Deputy Speaker. I have just received an answer to a question about lottery funding that I tabled to the Secretary of State for National Heritage. I asked whether details could be provided by constituency, in rank order. The information has been provided on computer disk in the Library. In the answer, however, the Department states that the figures for the most recent quarter cannot be provided in rank order—although the figures have been provided to the hon. Members concerned—because of the disproportionate cost of doing

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  so. I believe that it would be a simple exercise to provide the information. Perhaps I could also suggest to the Secretary of State that her Department should apply for a lottery grant so that my question can be answered.
  Madam Deputy Speaker: That is not a matter for the Chair. However, the hon. Gentleman will no doubt find other ways in which to express his disappointment.
  5.35 pm
  Sir Edward Heath: I hope that my right hon. and learned Friend the Chancellor of the Exchequer will not be embarrassed if, in what I hope will be a brief speech, I commend him on his action today on interest rates. I believe that he was absolutely right to do so, although. to some extent, I regret the situation that made such action necessary. I am sure that he realises that we cannot expect to be popular with our fellow citizens by increasing interest rates. From my experience, I know that the great majority of people were hoping that we had reached a point at which there would be no more increases.
  I also fear that the increase will create or increase a feeling of insecurity that affects many people, and that they will feel that this is only the first stage. It is commendable that the Chancellor will not hesitate to increase rates further if necessary, if this increase does not solve the situation.
  I also regret the fact that the increase is necessary because of high unemployment. I recognise, of course, how much has been accomplished to reduce unemployment, but it is still very high. For many years, some hon. Members, and some Conservative Members, have denied any connection between unemployment and the various social ills from which we suffer. Perhaps those of us with an earlier experience have never accepted that view at all. In a variety of spheres—most recently in our schools, but also in the abuse of drugs and violence on the streets—the malevolent influence of unemployment is increasingly becoming apparent. Therefore, from the social point of view, I think that dealing with unemployment should have the highest priority.
  I listened with the greatest interest to what the right hon. Member for Manchester, Gorton (Mr. Kaufman) said about one industry, and I share his views. He has brought home to us the problems that the Government face in trying to facilitate the creation of new industry and in helping it to develop at a satisfactory speed. The problem is particularly acute if the Government have been brought up on the dogma that they must not do anything to influence our industrial life. That outlook has changed gradually over the past three to four years, but the problem remains the same.
  As the right hon. Member for Gorton emphasised, the situation can be helped enormously by our official organisations—such as the BBC—which I hope will be the case. The problems facing the Chancellor and the Government are concerned not only with technology and with people making the necessary decisions, however, but with the lack of knowledge of so many UK executives of what is going on in the rest of the world. The Government try to help. The Deputy Prime Minister visits various parts of the world, including China, but we are just not coping with the rapid development of so much of the rest of the world.
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  I take the example of China, which has a rapid rate of expansion of between 8.5 per cent. and 12.5 per cent. We are not establishing ourselves in those markets as we should be. Later, we shall have an opportunity to discuss the Hong Kong situation, which I see is on the Government's agenda. When the Governor of Hong Kong said that when Hong Kong returns to China on 1 July next year, we shall still have responsibility for looking after Hong Kong, he could not have chosen a better way of upsetting Beijing and affecting the Chinese Government's future attitude towards Hong Kong and towards us. That undoubtedly affects our trading arrangements with Hong Kong. As I know from my discussions with officials in Beijing and elsewhere in China, such comments affect where they place their orders.
  As I have said before in the House, I established full relations with Beijing and one of the three main purposes was to get trade. We are at the bottom of the trade list compared with all those who followed us, such as Japan, America, Germany and France. Whereas the Japanese trade is more than £30 billion, we are trying hard to reach £3 billion. That is the contrast between those who find out what is required and produce the answer, and those who do not. It is all very well to say that we should encourage trade, but it is also a question of spreading knowledge and showing our industries how they can achieve such results. I am, therefore, grateful to the right hon. Member for Gorton for his speech.
  I know that we are getting near the Budget, so I do not expect answers from my right hon. and learned Friend the Chancellor. However, I point out that he has withstood pressures in making his decision about the bank rate and I hope that he will be absolutely firm in withstanding pressures to reduce direct taxation. From the political point of view, that is not a winner for us, for the simple reason that every Labour and Liberal Democrat candidate, and many others, will say in the constituencies, "You said that last time and what happened?" We do not want to get involved in that argument: I hope that I am being realistic.
  There has always been a section of the monetarist wing of the Conservative party which believes that if possible, one should abolish direct taxation altogether and that the whole thing should be done through indirect taxation, whereby everyone, whether wealthy or poor, has to pay taxes. That is not acceptable for me or, I believe, for the party or the country.
  The Chancellor and his predecessors have got direct taxation down to a reasonably low level. If we are to persuade people to support our policies, we must show them that we care about the things they care about. It is, of course, right for us to point out, as the Chancellor has done, how much expenditure on the health service has increased, but that does not alter the fact that people want a better health service. The cost of medicine in this country and elsewhere is constantly increasing because of the expertise of those involved in medicine. The more that they can find proper treatment for our citizens, the more the cost will be. What our people want to know is whether we shall give them everything possible in modern treatment. When we can say that that is the case, we shall get support.
  The same point applies to education. I must be perfectly honest and say that I am not sure what the position on education is at the moment, anywhere. Parents are equally confused, especially after yesterday's debate. I am not one who puts all my trust in parents' decisions. Some parents

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  know a great deal about education and what is possible, and they can make a choice for their children, but the majority of parents rely on advice from head teachers and other teachers. That is where we need to improve the situation. Teachers have been knocked about for the past 20 years. That has undermined their confidence and schools are suffering as a result. We must restore confidence to them and let them advise parents on what is best.
  I look back to the arrangements made during the second world war by Rab Butler and Chuter Ede, who ran the Ministry of Education together. They had an approach that seemed to be the right one at the time and for some time afterwards. There were three different groups: the grammar schools, which were academic, the technical schools, which prepared students for industry and the rest, and the general, co-educational schools, which looked after other children.
  There was meant to be no distinction in standing between those three groups. They were meant to provide what was necessary in education for people with particular requirements. Where it went wrong was that under the Government who were in power until 1951, money was not available—or not provided—for the technical schools to develop. The result was that social divisions were created. There were great jealousies about people going to grammar schools and about others not being able to go to technical schools and having to go to the general schools. That system collapsed.
  Ever since, the question has been what should be put in place of that system. I do not think that we have been successful in ensuring that our children get the best form of education, which will also produce those who can contribute most to our economy and to our country. That problem remains with us to be worked out. I do not believe that it can be worked out hastily—that also worries me. Plans are produced on the spur of the moment without proper consideration of the effects. Education, like health, is an area in which our fellow citizens want the Government to provide properly. They also want the Government to deal with the immense problem of unemployment.
  The Chancellor has had to leave before I could commend him on one other matter, which is the single currency. [Laughter.] He has stood absolutely firm on that, and quite rightly so.
  Mr. Lewis: He anticipated the right hon. Gentleman's comments.
  Sir Edward Heath: He saw into my mind, which is easy for everyone to do.
  The Chancellor is absolutely right to stand firm on the single currency. However, my difference with him—it is not really with him, but with the governmental line—is that nothing is being done to explain to the people what the pros and cons of the single currency are. There is complete confusion between a single currency and a common currency. Citizens write to me asking, "What is this all about a common currency and a single currency?" Nothing is being done to carry on proper public discussion about the issue.
  All those who oppose the single currency get free coverage in a hostile press, which is largely owned by foreigners. On the other side, nothing is done. I learned
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  only recently that we contributed to the work done by the Commission, which Ministers approved, explaining the pros and cons of the single currency. Like every other country, we have contributed to that work. Every other country has used the results, but our Government are not allowing them to be given to people in this country. That is disgraceful. We have contributed, but we are not allowing the discussion that should be carried on, and the Government must look at that point. [Interruption.] The chairman of the Conservative Back-Bench finance committee, my hon. Friend the Member for Bridlington (Mr. Townend), could arrange such a discussion if he wanted to instead of sitting there, grinning and laughing the whole time.
  Mr. Dykes: Does my right hon. Friend know that in Germany, every passenger on the German railway system receives a bulky pamphlet explaining the pros and cons of the single currency system? Why should we not have something like that here?
  Sir Edward Heath: My hon. Friend will have to ask the Prime Minister and the Government; I am no longer responsible. Such discussion should take place. There is so much grumbling about the money that is passed to the European Union, yet we then refuse to accept what is being offered for discussion among people in a free democracy. As I have said, that is deplorable.
  There is another point that I want to make about the European Union which is to the Chancellor's good. I had produced for me last night the latest available figures showing the extent to which we are benefiting economically from the European Union. In 1973, when I took Britain into the European Community, it took only 36 per cent. of our exports. In 1995, the last full year, the EU took 58.2 per cent. of our exports. That is the jump which resulted from our joining the European Community. In 1995, the EU accounted for 56 per cent. of UK imports of goods and 48.2 per cent. of invisibles. In 1995, we had a deficit on trade in goods of £11.6 billion. That comprised a deficit of £4.2 billion with the EU and of £7.4 billion with the rest of the world. All that points to the extent to which we benefit economically from the EU.
  In 1994, the latest year for which figures are available, 33 per cent. of UK companies' direct investment overseas was in the European Union and 54 per cent. of overseas investment in UK companies was from the 15 countries of the EU. That shows the amount of inward investment that we received. The worrying thing about that is that it means that we no longer continue to run many of our companies, which instead are controlled by overseas countries, particularly the United States.
  I have some other interesting facts. In 1994, 80 million Germans bought £17.7 billion-worth of British goods, but 240 million Americans bought only £16.9 billion-worth. The average German spent three times as much as the average American. Holland, with only 15 million people, took £9.7 billion-worth of exports from us—more than the Asian countries, China, Indonesia and the Philippines together. We sold more to Sweden than to the whole of Latin America from Mexico to Cape Horn. The Irish Republic alone, or Belgium and Luxembourg together, were better customers than Canada, Australia, New Zealand and South Africa put together.

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  That flies in the face of everything that we hear from the Euro-sceptics—one of whom, the right hon. Member for Bethnal Green and Stepney (Mr. Shore), I see sitting in the corner on the Opposition Benches—and shows exactly how much we are involved with the European Union and how foolish we would be to endanger that relationship in any way.
  One other subject on which I want to touch concerns the question that has now become prominent in party politics on both sides of the House—morality. That is now being combined with religious beliefs. That is mistaken. It has not been in the British tradition—although it has been in some European countries—to have parties either named or dominated by a particular religious belief. There is a saying that a Member owes his constituents not only his energy but his judgment. It is up to us to give our judgment about those matters.
  To say that one party is the Christian party is, first, not true, but, secondly, Britain now has a mixed population in which there are Hindus, Buddhists and Muslims, and I suspect that some of my constituents are atheists. That may also be true elsewhere. Therefore, we should abandon the idea of proclaiming that our policies are the policies because of a particular religious belief. That is really the responsibility of archbishops and cardinals. They not only can but should do it and it is up to the individual citizen, not us, to decide what he believes and which belief he wants to join.
  I hope that we may continue our political life on the road that we have always followed and which has always been demonstrated in the House. There are those who want to come to Prayers at the beginning of the day and those who do not. That is a matter for them. It would be a great mistake if we put forward our policies on the basis of a particular faith and its morality.
  I commend the Chancellor on what he has done and I hope that he will be successful, but, in addition, I want to point out the need for a much wider approach in the rapid development of modern technology. I say rapid because there are so many examples of where we have missed the bus. We now have the channel tunnel. It always receives unnecessarily bad reports in the press. However, we do not have a fast link. We have been discussing that for eight years.
  When I go through the tunnel, there is a fast link on the other side down to Nice or wherever I want to go. I went on it up to Lille a little while ago and one can travel on it to Copenhagen. But in this country there is nothing. One comes through the tunnel and slows down. Having travelled at 175 mph across the French plains with their beautiful agricultural land, one travels on this side at 35 to 45 mph. Moreover, the horrifying stink and rubbish on this side is deplorable and disgusting. Who is responsible for clearing that away under the new system I do not know, but one does not want to see it oneself, let alone allow one's visitors to see it. That is indicative of the times.
  We had the same problem when we decided to decimalise our currency. We started discussing that in 1846 and it was carried through by a Labour Government in 1966. By that time, the rest of the world had already done it. When we did do it, we did it the wrong way, because we decimalised the pound with the result that
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  inflation was given a tremendous push. Had we decimalised on 10 shillings, like the Australians and New Zealanders, we would have missed that enormous push.
  We refused to go into Europe in 1950, when the European Coal and Steel Community was founded. It took us 22 years to get in and by that time so much had already been decided. Again, we missed the boat. We cannot afford to go on like that in modern history. Above all, we cannot afford it on the single currency. The decision will have to be taken, but we must be ready to take it. There is no point in my hon. Friend the Member for Bridlington shaking his head in disagreement. I am sorry that the chairman of one of our major committees should believe that one should be unprepared for one of the most important decisions that we have to make. We must be prepared for it. That involves not only the Bank of England, but the Government. If people in the Treasury are still living in 1945, they must be removed and proper Treasury officials appointed. We do not want to be living in that age. It is time that we took some action and dealt with the matter.
  Those are the matters that are vital not only for the future of the Government, but for the future of our country.
  5.58 pm
  Mr. Malcolm Bruce: It is always a pleasure to follow the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), who has an individual style. Years of experience mean that he is no longer beholden to the Whips or the Government, and what he has to say is all the more refreshing for that. That contrasts sharply with the exchange at the beginning of the debate, when extravagant claims were made about the total wisdom on one side and the total lack of it on the other, when, as always, the truth is always somewhere in between.
  As we are debating the economy, it is relevant just to pick out the strands that the Government have highlighted in the Queen's Speech. They are right about the issues, and there is some agreement about the policies, but not necessarily about their delivery. The speech says that firm financial policies are essential to secure sustained economic growth, and continues:
  "Fiscal policy will continue to be set to bring the public sector borrowing requirement back towards balance over the medium term."
  That is a greatly watered-down version of what used to be the Government's objective, which was to achieve a balance, full stop.
  The result is that there can and should be agreement about the need for financial discipline and the need for strict inflation policies—and the need to deliver on those policies. I welcome the Chancellor's announcement of today, not because people like to pay for higher interest rates but because of the recognition that it was necessary to take action.
  Just to put the record straight: when the Chancellor announced a reduction of a quarter per cent. on 6 June, we said at the time that we thought the move was misjudged and that it failed correctly to read the pressures building up in the economy. We said that it would have to be reversed. Now the Chancellor has been forced to acknowledge that he was wrong, and he has had to adjust the rate accordingly. The signs are that next week's inflation report from the Bank of England will argue that

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  the Government are still not on course to hit their inflation targets, so the Chancellor may have to increase rates yet again.
  All this reinforces the case for removing day-to-day interest rate decisions from politicians, who are under pressure before elections to do things for electoral advantage in the short term—things that may damage the performance of the economy in the medium to long term. That is the classic way of reaching wrong decisions.
  The right hon. Member for Dunfermline, East (Mr. Brown) quoted interest rates from a number of European countries, saying that they were significantly lower than the United Kingdom's. One factor that he did not point out was that all those countries have an independent central bank, which is a significant reason for interest rates being lower there than here. It remains, however, the united view of both main parties that they have no intention of setting up an independent central bank, even though the Maastricht treaty requires one whether or not we join European monetary union. [Interruption.]
  I hear mutterings from below the Gangway to the effect that the Governor and the Bank of England have been wrong in the past. That misses the point. There will always be differences of opinion on short-term judgments; we cannot say now who is right and who is wrong about what will happen in two years' time. The fact remains that, although bankers can make errors of judgment on the basis of their economic analyses, they remain economic analyses. They are not politically based.
  This independence would remove the premium that we all have to pay for political interventions. In other developed countries operating with independent central banks, long-term interest rates are persistently and consistently lower than ours. The costs to our public sector borrowing and to private investors who must pay these premium rates in the United Kingdom are high.
  I agree with the right hon. Member for Old Bexley and Sidcup that one of the chief arguments in favour of monetary union, assuming that the criteria are met both by the core member countries and by the United Kingdom, is that such a union would exert further downward pressure on interest rates, thereby benefiting investment here and reducing the costs of borrowing. That would also assist in the management of the deficit, which this Government have failed to control.
  Dr. Hampson: This is all very nice post facto academic analysis, but I remember the hon. Gentleman a year ago saying, as did Labour spokesmen, that the economy was stagnating and needed an injection of growth. He called for a reduction in interest rates then.
  Every commentator has applauded the fact that the Chancellor overruled the judgment of the Governor of the Bank of England. Is the hon. Gentleman saying that he would have kept interest rates higher over the past two years?
  Mr. Bruce: No, but I made it clear in June that I would not have cut interest rates—and said so at the time. We also said that the Chancellor would be forced to reverse his decision, which he has. My point remains that allowing decisions to be taken in this political way requires a premium on long-term interest rates which we all have to pay.
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  Extraordinarily enough, the Conservative and Labour parties say that, if Britain opts into monetary union, they are willing to hand over the management of monetary policy to a European central bank, but they are not prepared to allow a British central bank the same responsibility inside the UK economy. That is clearly inconsistent.
  If we are to manage our economy properly in the long term, we need to remove short-term political opportunist decisions from the equation. There have been many examples in recent years of Governments taking short-term decisions to foster short-term booms for electoral advantage. That has cost the country dear in the long term.
  The right hon. Member for Dunfermline, East rightly pointed out the problems of under-investment, which have created the pressures to which the Chancellor is now facing up. We have under-investment partly because of a lack of confidence that inflation and interest rates will stay down and that the exchange rate will remain stable.
  The reason why Germany, regardless of its difficulties, has sustained its economic performance year after year for 40 years is that its people knew that inflation and interest rates would stay low, and that the mark would enjoy a stable exchange rate. That enabled the Germans to plan, and it gave them the confidence to invest at lower rates of return. with the result that many more investment opportunities were taken up in Germany than in the United Kingdom, where the risks were simply too high.
  Ms Diane Abbott: Is the hon. Gentleman really saying that the only factor in Germany's remarkable economic performance in recent decades has been low interest rates? What about German training and skills, not to mention other factors?
  Mr. Bruce: Of course other elements are involved. It is disingenuous, merely because I have highlighted one strength of the German economy, to suggest that I do not recognise its other strengths, too. I intend to deal with them later in my speech.
  The Prime Minister claims that inflation is in the box. Current low investment, however, suggests that this country's investors do not yet believe that. We shall need to sustain low inflation for rather longer before they do. In fact, inflation in the UK is still the fourth highest in the EU. We welcome the fall in unemployment, but it is still considerably higher than it was when the Conservatives came to power—and it has not improved much under this Prime Minister.
  As for growth or stagnation, the United Kingdom's economy is growing at 2.6 per cent. a year—hardly a boom. It is a worthwhile recovery; we want to ensure that it continues, and we expect it to improve slightly. The worry remains that, with a growth rate of 2.6 per cent., we are already hitting inflationary pressures. That is surely a sign of under-capacity and under-investment, both of which the Government have failed to deal with.
  When it comes to taxes, the Government are not on strong ground. They cannot even be honest. The right hon. Member for Old Bexley and Sidcup is not alone in his party or among supporters of business and industry on the issue of taxes. Organisations not previously thought of as sceptical about Government tax policy are now saying

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  strongly that the Government should not go for a tax-cutting Budget. No less a body than the Institute of Directors has said:
  "We do not now believe there is scope for further cuts in income tax … in the next Budget."
  That is astonishing coming from that organisation.
  Perhaps less astonishing, but still interesting, is the Confederation of British Industry, which said:
  "The CBI believes work force skills are crucial to business success, but … our research identifies significant current deficiencies … we have called for investment in transport to increase … These spending priorities are more important to business than tax cuts."
  The Institute for Fiscal Studies said:
  "To cut taxes now in the expectation of hitting these medium term spending plans would be dangerous."
  The Association of British Chambers of Commerce said:
  "The Government should not consider tax cuts while the PSBR remains so high … The British Chambers of Commerce urge the Chancellor to make education a spending priority."
  Perhaps most interesting of all are the comments of the right hon. Member for Witney (Mr. Hurd) at a meeting at St. Stephen's club on 25 September. He said:
  "It would be great foolishness for Conservatives … to promise that we could cut taxes without cutting public spending. It would be more honest … to promise the electorate both extra tax cuts and big reductions in public services which would be required to fund them … I do not believe that elections … can be won by reducing income tax against a background of sacked teachers or closed hospital wards".
  That is the climate in which this debate is being conducted.
  I suppose I should hope that the Government and the Cabinet are not listening to the debate, and that they will go ahead regardless with a tax-cutting Budget. I must tell them that, if they do, they will be wrong. The British people will not believe that they can sustain those tax cuts while claiming that the health service will be safe in their hands. The British public will not believe that they have a genuine commitment to the problems of the poor and to investment in education. It does not add up, and it is not honest or credible. The Chancellor has made it clear that he does not believe that the Government are trusted on taxation, and he is soft-pedalling on the issue of tax cuts.
  I will take up the point raised by the hon. Member for Hackney, North and Stoke Newington (Ms Abbott). We need to ensure that we continue to invest in education and training, so that we have people with the proper basic skills to be able to adapt to a rapidly changing world. We cannot deliver a record comparable to most of our competitors, and we will not be able to do so if we go on cutting investment in local authorities so that they cannot maintain teachers in the classroom or the fabric of our schools, let alone develop nursery education and the use of new technology within schools, which requires a great deal more equipment. Those things require investment at all levels, and that investment must be paid for, as a matter of public policy and public responsibility.
  Mr. MacShane: Is the hon. Gentleman aware that sometimes one can get money for nothing? The European Commission is offering £300 million for job creation in Yorkshire under the Resider II steel regeneration
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  programme. It has been blocked by the Minister for Small Business, Industry and Energy, who is insisting that no elected councillor should sit on the programme allocation committee. Such is the anti-European mindset of our Ministers that they are blocking that important Euro-cash for Yorkshire because of an absurd belief that only Whitehall should control the money, and that elected councillors should have no part in it. It is a scandal.
  Mr. Bruce: I am sorry that I gave way. The hon. Gentleman has made his constituency point, and I will leave it at that.
  I believe that the British public are looking for a more intelligent and honest debate about real resources. The Chancellor has talked about driving the public share of spending down below 40 per cent.—he maintains that in the Queen's Speech. That should happen as a matter of routine over the cycle, so it does not require any additional action and is no big deal. When the Government talk about driving it down further, they mean that they will have to privatise health care, unemployment and social security, and require people to pay more for health, education and services out of their private income. Most people would like to have an intelligent debate about whether that is better done through the existing institutions.
  I see heads shaking on the Conservative Benches. There is room for debate, but there is no room for dishonesty which suggests that one can cut taxes and not cut public spending, and that the consequences would not damage existing services and prevent investment in them. It is our contention that the Government should recognise that they need to press down against inflation to try to achieve stability, and ensure that the growth rates are sustainable and that we have the necessary education and skills to provide a long-term basis for the future.
  The Government must resist short-term pressures to come up with electoral gimmicks that will not work and which, worse than that, will damage the recovery we have and the possibility of ensuring a genuinely competitive economy in the long term. We need to ensure that people will invest because they believe that inflation and interest rates will stay down. We must be part of a strong monetary union, exchange rate union and European Union in which we are fully participating members, shaping the destiny rather than bobbing around in the wake of decisions made by other people.
  6.14 pm
  Sir Terence Higgins: After participating in debates on the Queen's Speech for 32 years, it feels strange to realise that one is standing up, probably, for the last time.
  When I first arrived in the House, I was taught that it was polite to refer to the arguments of other hon. Members, since we are supposed to be debating. I should like to pick up on the point about cable television which was mentioned in the fascinating speech of the right hon. Member for Manchester, Gorton (Mr. Kaufman).
  As cable television spreads, more and more people will have a continuous feed of events in the Chamber. That is rather worrying. We now have television sets in our rooms with that facility, and more and more hon. Members are staying in their room to get on with their constituency duties and so on, turning up the volume if a speech is

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  interesting and turning it down if it is not. Consequently, hon. Members are not appearing in the Chamber. In future, that will give a create a bad impression for the public at large. I hope that, as technology improves, it will be possible to have split screen coverage, showing, for example, the work in Select Committees at the same time.
  I want to address my initial remarks to the Leader of the House and the shadow Leader of the House, who, by tradition, reply to the debate on the final day of the Queen's Speech. I am glad to see the Leader of the House here, and I hope that what I have to say will be conveyed to his shadow.
  I believe that we are suffering serious problems as a result of the decision by the former Chancellor—it was announced with virtually no consultation and was contrary to what had been recommended—to introduce a unified Budget in the autumn. I believe that that is unsatisfactory. The Opposition tend to choose the last day of the Queen's Speech debate for discussion of the economy, when we do not have the Chancellor's economic forecast, we have none of the up-to-date information, and the Budget is only a short time ahead.
  That is unsatisfactory, and, as the Chancellor pointed out in his opening remarks, it means that we have a long gap in the rest of the year when nothing is happening. One could say that the Chancellor and his colleagues could go on holiday after Christmas for the rest of the year. It also has serious effects on the congestion of our parliamentary programme. There is a little more time this year between the Queen's Speech and the Budget, but it is difficult to cram in Second Reading debates in time to set up Committees.
  I strongly advocate the suggestion floated by my right hon. Friend the Prime Minister and taken up by the Leader of the House in a debate on 11 July, that we should hold the Queen's Speech in the spring. That would be far more satisfactory. We could then have the major Second Readings through, and the Bills would be making progress. When we returned after the summer recess, the Budget would open the second part of the annual programme. That would spread our economic debates and our programme as a whole in a far more efficient and satisfactory way.
  I accept that we will not return to the old system, because the Treasury has decided that the current arrangement is rather good, for the reasons I have just mentioned. If we are not to return to the old system, there is a strong case for having the Queen's Speech in the spring and the Budget and autumn statement in the autumn.
  That has frequently happened after a general election, when the Queen's Speech has taken place in the spring. So next year will provide an ideal opportunity to carry out that reform. However, we should not then have an 18-month Session. It would be better if we then had a yearly Session such as I have described. As it is not a partisan matter, but one for the House, I very much hope that the usual channels will give the idea serious consideration.
  I should also like to commend the suggestion that was picked up in the speech by my right hon. Friend the Prime Minister at the beginning of the debate on the Queen's Speech this year. He said:
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  "I should like to move towards a position where we can announce in future a two-year legislative programme and, so far as possible, publish draft Bills and consult on the second year's Bills before they are introduced."—[Official Report, 23 October 1996; Vol. 284, c. 31.]
  That happened many years ago when we introduced value added tax. That was the first time draft Bills were published well in advance.
  That practice has much to commend it. It would give Select Committees the ability to consider Bills months in advance. Select Committees are a better vehicle for that than Special Standing Committees, and they could work more effectively if they had a longer time scale. I very much hope that we can pursue the idea that my right hon. Friend the Prime Minister proposed and that—I hope—has general support in the House.
  I should mention in passing, as no doubt we shall debate it later, that that idea seems quite contrary to the hurried introduction of particular measures, such as the proposed legislation on guns. Tragic though the Dunblane experience was, in my opinion it is unlikely that the current proposals will significantly reduce the risk of another such tragedy. Had the existing law been enforced properly, it probably would not have happened.
  The danger of driving it underground so that gun maniacs had to obtain weapons illegally is that there would be rather less check than before. I shall not labour the argument, but it is important that the legislation should not be rushed, and that we should carefully consider how to make it as effective as possible.
  Turning to the main subject of this afternoon's debate, I agree with my right hon. and learned Friend the Chancellor's view of the economy. The present prospects are extremely good, and I hope that, in his Budget, my right hon. and learned Friend does not react too dramatically to concern about the level of the public sector borrowing requirement. At this stage in the cycle, it is not wholly inappropriate.
  None the less, the economy is growing rather faster than anticipated. The latest quarterly figures show growth at 0.8 per cent., and the two previously quarterly figures were revised upwards, so I can understand the concern about that. As the economy recovers, it is important that we slow down the rate of growth in line with the anticipated growth in productive potential. By then, we shall have some idea of the size of the real underlying deficit, but we do not have a clear idea of it at the moment. I do not consider that it will be necessary to take savage steps to cut the PSBR; that would be inappropriate at this stage in the economic cycle.
  Development in the United Kingdom economy has to be judged against the background of the world economy and what is happening in Europe. I am concerned by what is virtually organised deflation in almost every European country seeking to meet the Maastricht criteria. They are doing things that they would not do were they not seeking to meet those criteria. That is dangerous.
  I hope that we can get away from the expression "single currency". We are now considering the prospect of a core currency, but there is no prospect of a single currency over the now vastly expanded European Union not only within our political lifetime, but possibly within our actual lifetime. Therefore, it is misleading to continue to refer to a single currency.
  My right hon. and learned Friend the Foreign Secretary was right in his speech in Switzerland a few weeks ago to say that, if a small core of currencies join the so-called

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  first wave and others do not join for a long time, the Union will be undermined. There cannot be a Union if some are in and some are out of what is generally regarded as its most important aspect, apart from the single market.
  Secondly, the policy that my right hon. Friend the Prime Minister has set out very clearly is absolutely right. At this stage, it would be absurd to rule out joining the single currency in the next Parliament. Inevitably, that would mean that we could not play our full part in the negotiations, and we have a responsibility to do that for the sake of the United Kingdom and the future of Europe. My right hon. Friend was right to stress that important point.
  The way in which the process is continuing gives me grave cause for concern. Europe is seeking to achieve the Maastricht criteria, but it is quite clear that the degree of convergence that we are likely to achieve on the present timetable is bound to be inadequate. That is a serious consideration.
  It would be different had we achieved convergence and a single currency, and there were then particular variations in prices and costs in a particular part of the European Union, because, at that stage, we would have given up for all time the main means of adjusting differential movements in costs and prices. That would have the inevitable effect of causing unemployment to become endemic in certain parts of the Union, or it would involve huge subsidies from one part of the Union to another. That would be unlikely to happen, and we know that such subsidies are frequently ineffective.
  That is not the position, however. Britain and the European Union are contemplating going ahead when there is inadequate convergence. The Herald Tribune and the Financial Times point out today that German economists are saying that Germany is unlikely to meet either of the main criteria. The French are employing an extraordinary method of proceeding, which is reminiscent of Mr. Robert Maxwell and the pension funds. Serious dangers are involved, and there are likely to be enormous problems.
  One must give a warning: it will be dangerous for us and for the future of Europe and the single market if we go ahead with a single currency on the present schedule with inadequate convergence. Were I being rhetorical, I would say that some of the more enthusiastic politicians in the EU seem to be acting rather like the Gadarene swine. Perhaps I sound unduly pejorative. I am suggesting not that they are going in the wrong direction, but that they are proceeding at a suicidal pace.
  Whether or not we are in the first wave, we have a responsibility to persuade the EU that the present timetable is dangerous. Whatever one's views on the single currency, and whatever decision is made about whether we are in the first wave, there is a danger that the first wave will create a core group on a basis that is not sustainable. If it goes ahead on that basis and on the present schedule without adequate convergence, the system will break down. That will be an enormous setback to the creation of the single market, and will create serious problems. Therefore, we must take part in the negotiations. We must not be excluded from them. If we
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  fail properly to play our part, the real negotiations will take place outside the normal forums. That must be borne in mind.
  Sir Edward Heath rose—
  Sir Terence Higgins: My right hon. Friend may not have agreed with everything that I have said. I note that he wishes to intervene.
  Sir Edward Heath: I am trying to find something on which I agree with my right hon. Friend. Will he first agree that we must stop kidding ourselves as to what other major countries in the European Union will do? They are determined to get a single currency, and to do so within the time period of which we are aware. There are powerful politicians who will be in place for a considerable period. The President of France is in that position. He will make sure that the programme is carried through. That is the situation that we must face.
  Secondly, why are the other major countries in the European Union so determined? They know that it is not possible to keep a single market unless there is a single currency. All history proves that. Indeed, the present world proves that. That is why they are determined to go ahead.
  Lastly, let us consider convergence and the United States of America. How much convergence does the US have? There are enormous differences between California, New York state and the southern states, yet the US is the most successful country in the world.
  Sir Terence Higgins: I take up, first, my right hon. Friend's final point. The first question put to me during my third year at Cambridge on economics related precisely to the United States. The reality is that some parts of the United States would probably gain if they did not have a single currency. Some parts of Mississippi, for example, might gain by devaluing. That is not, however, historically the way in which the United States has grown up.
  I do not accept my right hon. Friend's premise that there cannot be a single market if there is not a single currency. That is disputable.
  I am seeking to put over the case that, if Europe proceeds as some suppose, and in the pejorative terms that I used earlier, the leaders of France and Germany are likely, in pursuing a timetable in the absence of adequate convergence, to bring about the self-destruction of that which they wish to construct.
  Ms Abbott: Will the right hon. Gentleman give way?
  Sir Terence Higgins: I have little more to say, but if the hon. Lady really wishes to intervene, I shall give way.
  Ms Abbott: The right hon. Member for Old Bexley and Sidcup (Sir E. Heath) made the real point, that the political elite of Germany and France are determined to go ahead with economic and monetary union come what may. Does the right hon. Gentleman agree that, merely because the Gadarene swine are determined to go over the clifftop, that does not mean that sensible porkers should go along with them?
  Sir Terence Higgins: There are serious problems. I understand what my right hon. Friend the Member for Old

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  Bexley and Sidcup (Sir E. Heath), who has perhaps more knowledge than anyone else of European leaders on this issue, is saying. I am saying that those leaders are putting us in a dangerous position. We should seek to persuade them of the dangers that I have described. Indeed, that is the purpose of my speech. As I have said, I have left undebated the question whether we are in or out.
  I have a strong feeling that, if the leaders of Europe go ahead with a core currency without adequate convergence, they may well find themselves—the Germans will certainly regret this—with what has been described as a camembert currency, with a soft section in the middle. We may find that that currency weakens, and that the value of sterling increases. The arrangements to prevent the value of sterling declining may have the reverse effect of what is expected. If that happens, there will be serious implications for our competitive position at that stage. It would be rather good, however, for some other sections of the economy.
  We face serious dangers. In his peroration al the Conservative party conference, my right hon. and learned Friend the Foreign Secretary quoted William Pitt in terms of saving Europe by our example. We must bear in mind what the example may be, and what the arguments are at a technical level. I understand very well the point that my right hon. Friend the Member for Old Bexley and Sidcup made about political drive, but at the end of the day—I quote someone whom perhaps neither my right hon. Friend nor I have always agreed with—we cannot buck the market.
  6.34 pm
  Ms Diane Abbott: It is a pleasure to take up the remarks of a distinguished ex-Chairman of the Select Committee on the Treasury and Civil Service. The decision whether to join the economic and monetary union is the one most important economic decision that faces the British political class. It gives me great pleasure to talk about something of substance such as the economy when over the past few weeks politicians of both major parties have been vying with one another in pontificating on morality and Christianity. I do not believe that the public have much stomach for professional politicians going on about matters of morality. We should concentrate on matters within our competence, such as the decision to join EMU.
  It seems, sadly, that the debate on EMU has been hijacked by nationalists. It has been presented all too often in the popular press as a debate between nationalists and internationalists.
  My parents came to the United Kingdom nearly 50 years ago from across the Atlantic. I am not a xenophobe and I hold no truck with petty little Englander ideas. I believe that there is a practical case against economic and monetary union on the criteria and timetable that are before us. That is the case that I hope to set out in a modest way.
  I am a member of the Treasury Committee. I served under the distinguished chairmanship of the right hon. Member for Worthing (Sir T. Higgins). During my membership of the Committee we have conducted two major inquiries into economic and monetary union. When the right hon. Member for Worthing was speaking, a colleague said to me, "I did not know that he was so anti-Europe." I said, "He is not anti-Europe, but as it
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  happens economic and monetary union is one of those matters where the more you know about it, the more sceptical you become."
  One of the arguments that the Europhiles like to advance in trying to confuse the issue is to ask, "Why are we talking about economic and monetary union now? The decisions are a long way away. The issue can wait. It is a long way down the track." In fact, 1997, next year, is the key year. It is the reference year. It is the year when the decisions of early 1988 will be taken on board. It is also the year during which Parliament will have to vote on whether to make the Bank of England independent in line with the Maastricht decisions, with a view to us going into an independent European central bank. That being so, the arguments that we should not be discussing these matters now because they are a long way ahead of us are simply tosh.
  The hon. Member for Gordon (Mr. Bruce), the Liberal Democrat spokesman on these matters, produced as Liberals are wont to do, the orthodox view of an independent Bank of England. The hon. Gentleman suggested that it would be a magical elixir that would be the cure for Britain's long-standing economic decline. The orthodoxy relating to an independent Bank of England is not exactly the fact. The issue will have to be debated next year. There is a case for an independent Bank of England, and one that bears more scrutiny than fashionable opinion has bothered to give it.
  There are right hon. and hon. Members on both sides of the House who like to talk about a European central bank as if it is nothing to worry about. They say that at the end of the day politicians will have the final say. That is completely untrue. Martin Woolf of the Financial Times has said that a European central bank would be the most powerful and politically unaccountable bank in the world. It is the political unaccountability of both an independent Bank of England and a European central bank on which the House should focus tonight and in future debates.
  Much of the argument, inasmuch as people argue rather than make assertions in a fashionable way, for an independent Bank of England, rests on the notion that there is a causal relationship between an independent Bank and low inflation. The Treasury Committee considered the issues before the hon. Member for Gordon became a member of it. We found that the factual evidence for a causal relationship was slender. There is a relationship: as fashionable opinion always says, Germany has historically had low inflation since the war and it has an independent central bank, but I always argue—the advisers and the information available to the Select Committee back me up—that to find the roots of Germany's low inflation one has to look at Germany's searing experience of hyper-inflation in the 1930s and immediately after the second world war and at a political consensus between management and labour to take inflation seriously. I challenge any of the fashionable pundits to come up with some academic evidence to show that there is a genuine causal relationship between an independent central bank and low inflation.
  Andrew Wood, our specialist assistant to the Select Committee, said:

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  "Whilst the relationship between inflation and Central Bank independence is undisputed, it is generally acknowledged that that relationship may not be causal".
  Dr. Hampson: The reverse argument is this country's track record since the war. Far too often, politicians—or the Government of the day—have interfered, and devalued. I hate to make a party political point, but it is Labour Governments who have been especially prone to do so. Governments devalued the currency to help British manufacturing industry, which was in a relatively weak position. It is that track record that led to there being little trust in the strength of the British currency—had we had an independent bank, the financial markets around the world might conceivably have had a different perception.
  Ms Abbott: I am grateful to the hon. Gentleman for mentioning one of the other shibboleths of fashionable opinion, which is that we do not want politicians interfering with interest rates and that somehow monetary policy is different from any other aspect of economic policy. I would argue that monetary policy is of course very important but no more important than any other aspect of economic policy such as fiscal policy and public expenditure. What is the basis for saying that one aspect of economic policy can be taken separately from the others? My argument is that monetary policy is too important to be left to central bankers.
  I pray in aid not some rabid right-wing Euro-sceptics or even some left-wingers but two distinguished ex-Treasury knights, two distinguished ex-permanent secretaries to the Treasury—Sir Bryan Hopkin and Sir Douglas Wass, who said in evidence to our Committee:
  "It follows that decisions about the pace and rigour of the fight against inflation ought to be taken with full consideration of the costs involved—unemployment, recession, bankruptcies not to mention the cost to the public purse arising from higher social security payments … It seems to us to be fundamentally mischievous for … these issues to be removed from the domain of … democratically elected … Government and handed to an appointed and unaccountable central bank."
  I quote a little more as this is the heart of my argument. They continued:
  "It is not the job of central bankers to judge how far it is right to go in damaging the standard of living of some members of the community or destroying the jobs of others in order to bring inflation on to some particular path. These are broad matters as much of social welfare as of economics."
  My view runs contrary to fashionable opinion: monetary policy is very important but no more so than other aspects of economic policy. The argument for taking it out of democratic control does not stand up. Monetary policy is too important to leave to central bankers, even those as urbane as the great and the good Eddie George.
  Mr. Malcolm Bruce: Is not the hon. Lady explaining exactly why there is some concern? What credibility will one's inflation target or monetary policy have if one is determined to try to vary it as and when political expediency requires? Does not that undermine confidence in the policy-making process and is not that why there is a premium on interest rates?
  Ms Abbott: The hon. Gentleman was not listening to what I was saying. I was not talking about political
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  expediency. My point is that monetary policy is not about numbers on a page; it affects unemployment, bankruptcy and people's lives in general. Because it is not just a theoretical accountancy exercise, it should remain under democratic control. Monetary policy is important but the House deals with many important issues. Why should it not be left in the hands of politicians? For too long, monetary policy has been described in the abstract rather than in terms of its effect on the lives of people in Hackney or even those in Milton Keynes.
  The distinguished Treasury knights went on to say:
  "It is inherently wrong to give such a responsibility to central bankers. Quite simply it is not their job: it is the proper responsibility of the elected representatives of the democracy and should stay with them."
  I now leave the question of an independent central bank, but the House will have to return to it. Far from it being a remote debate at the end of the millennium, the matter will be debated on the Floor of the House within 12 months.
  Labour Europhiles trying to influence the debate on economic and monetary union sometimes say that we should not worry about a European central bank because when it comes down to it, it will be under the control of ECOFIN, the Economic and Finance Council. I have heard that argument deployed by distinguished colleagues and I have even heard something similar from the Chancellor of the Exchequer. People who use such an argument need to read the treaty, which is very clear. A European central bank will by law not be accountable to any body, especially not ECOFIN. I know many colleagues are genuinely pro-European, but I plead with them to stop using the bogus argument that ECOFIN will be a counterbalance to the central bank.
  Members of the Select Committee went to the Bundesbank several times, and the Bundesbank is clear that there is no question of a European central bank being subordinate to any elected authority.
  Mr. Legg: I am grateful to the hon. Lady for giving way, but she did mention the constituents of Milton Keynes. She rightly refers to the unaccountability of a European central bank. Will she confirm that the Maastricht treaty in fact forbids politicians to give any instructions to central bankers about the central bank? If there were a camembert currency, as outlined by my right hon. Friend the Member for Worthing (Sir T. Higgins), would not there be a danger that unelected central bankers would impose even more deflationary policies on the people of Europe?
  Ms Abbott: That is so. I am happy to confirm that the Maastricht treaty forbids politicians to give any instructions to the European central bank. As to the possible deflationary consequences of EMU, I intend to deal with them later in my speech. That is a very important point.
  Another argument, or non-argument, used by people in both main parties who favour EMU, is deliberately to oversimplify the issue. They say that it will be nice to have one currency as we will not have to change money at the borders; we should just take a deep breath and plunge in. However, having a single currency involves more than simply reprinting our bank notes so that they bear the European symbol. Having a single currency

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  requires that, to a greater or lesser extent, we lock the economies of the countries involved. The seriousness and difficulty of that project are not properly explained to the public by Europhiles of any party.
  I hear people talk glibly about EMU and gloss over the difficulties of locking economies and wonder whether they have learnt nothing from our experience in the exchange rate mechanism. I followed the debate in the press and remember how all fashionable opinion, the Liberals and goodness knows who else were saying that all we had to do was join the ERM, lock our exchange rates and all sorts of magical consequences would flow from it. It was to be the silver bullet to cure this country's long-standing economic problems. We locked exchange rate parities and, as the right hon. Member for Worthing said, the thing imploded.
  People who have such confidence in the notion that one can lock the economies of major European countries according to arbitrary political timetables or the lifespan of Chancellor Kohl ought to re-examine the history of the ERM and how it exploded.
  I want to move on to what for me is one of the most fundamental problems with the EMU project—I speak as a member of the Labour party—and that is the price, in deflationary economic policies, that ordinary people are paying in Europe and may have to pay in Britain if we go into EMU on the arbitrary political timetable. In Germany—and there is no leader in Europe more committed to EMU than Kohl—they have had strikes and upheaval caused by the price that the German people are paying in cuts in public expenditure to enter EMU on the timetable. Recently, the Institute for Economic Research in Germany said that there will be a rise in unemployment and stunted economic growth if Germany tries to fulfil the entry criteria on time.
  In France, they are considering budget cuts of £7.5 billion and the unions were on the streets last year and will have a series of days of action against the cuts in health care, education and public sector pay. That is all because France has to meet the Maastricht criteria. In Spain, 300,000 people demonstrated against the cuts and the deflationary policies caused by entering EMU. In Austria, the two-year austerity programme has resulted in a record growth in the votes for right-wing parties in the recent Euro-elections.
  I like to go along with fashionable opinion as much as the next person. It is so much easier and the sunshine of one's leader's smile glows upon you, but if we consider the price that ordinary people in Europe are paying for deflationary EMU-linked policies and the prospect for communities such as Hackney, which already suffers from endemic mass unemployment, anyone who calls himself a socialist or has any concern for the population will be given cause to pause at the necessity for a Gadarene swine-like rush into economic and monetary union on that timetable and according to those criteria. It has been calculated that, to hit the criteria on the borrowing deficit, we would have to cut public expenditure by £18 billion. If my hon. Friends on the Front Bench imagine that having—touch wood—won the next election, they would ever win another one if they implemented public expenditure cuts of that magnitude, they are deluding themselves.
  I do not pray in aid left-wingers or Euro-sceptics, but the great and the good Eddie George, the Governor of the Bank of England. He said, with his usual cautious
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  understatement, that if we went into EMU on that timetable and on those criteria, without paying attention to the important and underlying differences in the European economies, particularly in unemployment
  "you would have the risk that some parts of the community would be stuck with low activity and high levels of unemployment and would have very few options for addressing them."
  That, coming from the Governor of the Bank of England, is an understatement.
  Some of my hon. Friends try to pooh-pooh a serious debate on EMU by saying, "Don't you understand, Diane, the criteria are flexible and they will be moved around. Don't worry about the criteria." I urge them to listen to Commissioner de Silguy who has said, about the notion that some Europhiles have that the criteria are flexible,
  "We require total and strict appliance of the treaty without anything being added to it. We have always said that we should not add any criteria—for example a criterion on unemployment."
  The Treasury Committee has, on several occasions, spoken to the Bundesbank about the issue of the flexibility of the criteria and, whenever we mention it, their faces freeze. The only people who think the criteria are flexible are deluded Europhiles in left-of-centre parties.
  I am glad to have the opportunity to address the House on what will be the most serious economic issue facing us in the coming 18 months. I feel that we have had a misleading debate until now. It has concentrated on issues of nationalism and so on and not on the practical and democratic issues that relate to the question of Maastricht. I am weary—so I suspect is the British public—of politicians talking about issues of morality and the family of which some of them know little and which, certainly, we have no power to affect. We do have the power to shape this country's economic future. A serious economic decision faces us within the next 18 months and, although I bow to no one in my internationalism and my wish to see Britain part of Europe, we would be irresponsible and deluded if we imperilled the economic stability and the possibility for growth by simply following fashionable opinion on the question of economic and monetary union.
  Madam Speaker: The 10-minutes rule starts operating at 7 o'clock.
  6.55 pm
  Mr. Nigel Forman: I congratulate the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) on a persuasive, entertaining and—I know—well-researched speech which put her strongly held view on the important question of European monetary union. The speech was none the worse for the fact that I have had the honour to hear it before many times in the Treasury Select Committee.
  Equally, I pay tribute to my right hon. Friend the Member for Worthing (Sir T. Higgins) for what turned out to be his valedictory remarks on the Queen's Speech in view of his regrettable decision to retire. We have always listened with the utmost respect to his remarks on anything to do with the economy and I am sorry that on occasions such as this in future we shall not have similar opportunities.
  I disagreed significantly with only one point in the right hon. Gentleman's speech. He said that he thought it would be unwise at this stage of the economic cycle to act aggressively—or words to that effect—to reduce the

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  public sector deficit still further. I shall return to the point later, but I believe that we must be somewhere near the peak of the cycle, by anybody's best reckoning; if ever there were a time when we should be acting as effectively as possible to reduce the deficit, it is now, rather than later. I beg to differ with my right hon. Friend on that.
  Perhaps the high point of the debate so far, notwithstanding the spirited speech by the hon. Member for Hackney, North and Stoke Newington, was the brio of the performance by my right hon. and learned Friend the Chancellor of the Exchequer. He put on a magnificent performance, matched only by his bravura speech in Bournemouth a few weeks ago. I commend him for that and it is good to know that the economy is safely in his hands. Long may it remain that way.
  I noted a contrast with the speech by the right hon. Member for Dunfermline, East (Mr. Brown) which seemed to be based on the woolly and meaningless notion of "addressing" various difficult issues. The verb "to address" seems to be the key to new Labour's policy. It says that it will address long-term unemployment, it will address nursery school places and it will address skill shortages. To address those big questions is not a substitute for a valid and thought-out policy and is certainly not a substitute for a fully costed policy with real numbers and real choices. I remember that Nye Bevan was famous for his much-quoted phrase that socialism has to be the language of priorities. We may be faced with a chameleon-like Labour party, which has apparently changed its ways, but it must still focus on the language of priorities if it is to be taken seriously by the British people.
  I also have a small bone to pick with the Liberal Democrats and I am glad to see their Treasury spokesman in his place. I have sat through a few days of this debate recently and I was present on the opening day. I sought to challenge the right hon. Member for Yeovil (Mr. Ashdown), the leader of the party, when he expressed one of his typically pious concerns about the size of the public deficit. When I intervened on him to ask what practical proposals he had for reducing the public debt in the short term, he simply replied, in what I considered a very inadequate way:
  "We would not cut taxes."—[Official Report, 23 October 1996; Vol. 284, c. 37.]
  That is one side of the account, of course, but it was a wholly inadequate answer.
  In the intervening period, I went away to do a little research on known and recorded Liberal public spending commitments since the autumn of 1995, when the Liberals produced something called an alternative Budget. I do not wish to weary the House; I shall simply say that, if we tot up those commitments—I have a list before me—we find that they come to more than £6 billion. The Liberals have very honestly said—I give them credit for this—that, to finance their education commitment, they would be prepared to put perhaps an extra penny on the standard rate of income tax. Broadly speaking, that could mean £2 billion. But that would still leave them £4 billion adrift, which—at this stage of the economic cycle, and
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  given the size of the current deficit—would add to the problems of the deficit and all the attendant financing problems, rather than solving any problem.
  Mr. Malcolm Bruce: Will the hon. Gentleman give way?
  Mr. Forman: Very briefly.
  Mr. Bruce: I accept what the hon. Gentleman says, in broad terms, but I must tell him that our alternative Budget and our manifesto have been strictly costed. He must not assume that commitments outside those are commitments other than the difference between what we would spend and what the Government are committed to spending. Our commitments have been not only costed, but audited by Treasury accountants and the Institute for Fiscal Studies.
  Mr. Forman: I do not think that we should take up too much of the time of the House with that point, but I will send the hon. Gentleman a list of the commitments to which I refer, and he can draw his own conclusions.
  Given that monetary policy is at the heart of today's debate, my main purpose is to commend my right hon. and learned Friend the Chancellor on the way in which he has exercised both prudence and responsibility in the conduct of monetary policy, with the aim of maintaining non-inflationary economic growth. I stress the word "maintaining". The important thing about this "recovery", as it is rather wrongly called, is that the period of growth has lasted for more than four years. If my right hon. and learned Friend continues with his current prudent policies, with any luck it will last for another four years, and perhaps for a further four years after that.
  As my right hon. and learned Friend said himself, the secret is to stay ahead of the game in monetary policy, and to move with small, timely steps. That is true whether we are talking about upward movements or downward movements in interest rates. As can be seen from the way in which my right hon. and learned Friend has conducted monetary policy recently—often in the face of contrary advice from the Governor of the Bank of England—such action has been characteristic of his methods. I suggest that today's small adjustment in an upwards direction will prove just as effective in sustaining a period of sound, non-inflationary growth as my right hon. and learned Friend's policies in the other direction.
  In the longer run, I hope that the Government will pay careful attention to the three key objectives mentioned in one of the economic sections of the Queen's Speech. The Government speak of returning the public sector borrowing requirement towards balance in the medium term. We should note that they say only "towards" balance, and refer to the medium term: their phraseology is fairly vague. They also speak of further reductions in public spending as a share of gross domestic product—ostensibly, lowering it to below 40 per cent. of GDP by 1998–99. They also speak, perhaps over-ambitiously, of doubling living standards over the next 25 years—an objective of Rab Butler's in the early 1950s, which implies a compound rate of economic growth of some 3 per cent. a year for quite a long time.
  I hope that the Government will not try to pursue incompatible objectives. I hope that they will give priority to reducing the deficit. It is vital not to saddle future

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  generations with the burden of paying off public debt, which is little more than deferred taxation under another heading. We should try to remove that deficit as soon as we reasonably can. I remind the House that, not long ago, one of my right hon. and learned Friend's predecessors was able to repay some public debt and to reach that stage in the equation.
  Within the total of public expenditure that is available, I hope that my right hon. and learned Friend will give priority to assisting the young. That means education and training, the youth service and the voluntary sector. At the other end of life, he should give priority to helping the elderly and the poorest pensioners. From time to time, I have presented proposals designed to do precisely that. I also hope that we can knock on the head the threatening idea of limiting treatment on the national health service to those over 75.
  All in all, I commend the Chancellor on his stewardship of the economy. I think that he has been running the ship very prudently and well. I am confident that, if we pursue the same course in future, we shall have not just another four or five years of Conservative government but—more important for the country—another four or five years of sustained non-inflationary economic growth.
  7.5 pm
  Mr. John D. Taylor: We have had an excellent debate, featuring many interesting contributions. I certainly enjoyed the speech of the hon. Member for Hackney, North and Stoke Newington (Ms Abbott), who spoke up for the people of the United Kingdom and reasserted the importance of democracy in this country. She said that the ordinary people should control their economic future.
  Today's announcement of an increase in interest rates came as no surprise: there were clear signs of increased inflationary pressures. If no action had been taken and then, a month later—at Budget time—the Government had reduced taxation, there would have been a further increase in those inflationary pressures. It was, therefore, an astute move by the Chancellor to act quickly, a month before the Budget, and increase interest rates. It will make it easier for him to consider the option of reducing tax next month.
  Having said that, I have to say that this debate takes place at a time when the economy of the United Kingdom is good. The Chancellor and, indeed, his predecessor deserve our congratulations on what has been achieved during the past five years. We have the lowest mortgage rates for 30 years, the lowest basic rate of tax for more than 50 years and lower unemployment than any other major European country. When we look at France and Germany, we realise how well we are doing. We have had the longest period of low inflation for 50 years. Above all—we certainly notice this in Northern Ireland—we are No. 1 in Europe for foreign investment. We in Northern Ireland share that. Companies are coming in from South Korea, Taiwan, Hong Kong, Singapore and, indeed, Indonesia.
  As I have said, Northern Ireland is sharing the improvement in the United Kingdom's economy. We have a record of high unemployment, but in recent years, even before the ceasefire, our unemployment had begun to decline. Last year, a record number of new jobs were created in Northern Ireland. Only yesterday—once more,
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  good news—Holiday Inns opened its second new hotel in Northern Ireland in three years. Tesco opened its first metro-store in the city centre of Belfast. Sainsbury made a big announcement of investment in Northern Ireland, and two new factories opened in Strabane. The news from Northern Ireland is very heartening—but there is one black spot, in agriculture, which is one of our main employers and one of the main contributors to the economy of the Province.
  The problems of bovine spongiform encephalopathy in the meat industry continually concern us, not only in rural areas but throughout Northern Ireland. Northern Ireland depends on its beef industry more than England: 50 per cent. of our beef is exported. That is why it is important for the Government to continue to give priority to resolving the problems facing Northern Ireland's beef industry.
  Interestingly, both the Chancellor and the shadow Chancellor—there was a great battle between the two of them—accused each other of not looking to the future. But, as the hon. Member for Hackney, North and Stoke Newington said, one of the most important questions for the future is whether we should have a single currency in Europe. Both the Chancellor and the shadow Chancellor avoided that issue. Both argue and both deliberately avoid the issue.
  I do not want to go into the matter in detail today, other than to say that my party reaffirms that it is against the idea of a single currency—or a core currency, as it has been called—because it would restrict our right to increase interest rates, as happened today, or to reduce them according to the circumstances that apply on a particular day in our country. It would also restrict the right of a future Labour Chancellor—the shadow Chancellor is not in his place at the moment—to reduce interest rates.
  The right hon. Member for Dunfermline, East (Mr. Brown) mentioned VAT on domestic fuel. My party voted against the Government on 17.5 per cent. VAT on domestic fuel for heating, and rightly so. I am glad to say that our votes won the day and the Government were defeated. If a future Labour Government introduced a proposal to reduce VAT on domestic fuel from 8 to 5 per cent., we would support them. However, the right hon. Gentleman did not point out that, because of the Labour party's policy on Europe, that VAT rate cannot be reduced below 5 per cent. The Opposition are committed to a position in which they will no longer have the freedom to decide whether they want zero VAT—they cannot reduce it below 5 per cent.
  The single currency is creating problems in Europe as countries try to comply with the Maastricht criteria. Look at Germany's current attitude to the Eurofighter—it is stalling because it has to reduce public expenditure. The right hon. Member for Old Bexley and Sidcup (Sir E. Heath) referred to the great TGV trains in France. They have had to be abandoned because the French Government, in an attempt to comply with the Maastricht criteria, can no longer invest capital in their railway system. Britain must avoid the problems now faced in Europe.
  I want to mention just one other European issue relating to Northern Ireland—the peace and reconciliation money that the European Community has kindly decided to give to Northern Ireland. Who would refuse money? We

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  welcome that £240 million, but we need to examine more carefully how it is invested. I want the money to be spent on schemes and projects which, in 10 years' time, we can look back upon and say, "Look at what that money achieved for the people of Northern Ireland." Instead, money is spent on, for example, teaching the Catholics how to enjoy Scottish dancing, or teaching the Protestants how to enjoy Irish dancing. Money going into such projects is basically going down the drain. In 10 years, there will be nothing for us to look back on and say, "Look what Europe achieved with its £240 million."
  The Government may propose lower taxation in next month's Budget; we shall wait and see. The people of Northern Ireland do not want lower taxation simply for electoral purposes—we want it to be related to the state of the economy and the needs of the people in our country. That involves public expenditure. Northern Ireland has reached the bottom line in that respect. Over a period of two months just before the summer recess, I visited 20 primary schools in my constituency. We have two school systems—the Catholic system and the state system. I visited both. I found that every school had budgetary problems. Teachers were being made redundant and services were being reduced, especially those for children with special problems.
  The same applies to Northern Ireland's hospitals. In my constituency, the Ards hospital is slowly being closed through lack of funding. There are also problems in the Ulster hospital. We want public expenditure in Northern Ireland to be maintained at a level—that means direct taxation being maintained at a level—that will ensure good services for the people.
  We need more public expenditure on the roads between Northern Ireland and Scotland. I know that the Confederation of British Industry in Northern Ireland wants to spend all the money on the roads to Dublin, but it does not represent the business men of Northern Ireland. I am a business man in Northern Ireland and I can tell the House that only 10 per cent. of businesses that employ 10 or more people belong to the CBI. It is more politically oriented than most of the political parties in this House. The business men of Northern Ireland want improvements to the road to Stranraer—the A75 in Scotland, as the hon. Member for Banff and Buchan (Mr. Salmond) knows—and to the A8, in which respect I am glad that my hon. Friend the Member for East Antrim (Mr. Beggs) is present. That is the gateway for Northern Ireland—
  Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. Time is up.
  7.15 pm
  Dr. Keith Hampson: I have a great deal of sympathy with the attitude of my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) and of the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) towards the moralising tone in current political debate. I agree that the public do not want politicians to hector and lecture them. It does no service to the public if politicians knock the country and sow an image of self-doubt in people. We are destroying people's self-image.
  Of course there are problems—there are ghettos, there is a cycle of deprivation, there are poor families, there are deprived families, there are single families, there are
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  ignorant parents and there are delinquent children. There are bad schools, but to imagine that all schools are full of young villains tearing the place apart and that everything is of the worst is not only wrong but denies the true perspective that we should be bringing to bear. Those are not just long-standing problems in this country; they are problems faced by every modern society in the western world. It is our duty to find practical solutions, not to take the moralising attitude that some people do.
  We must live in the real world. Some people and the popular press go on about the horrors of this country; yet people abroad are desperate to come here. Even The Independent, a few weeks ago, said in its leader that this country was now "vibrant" and "exciting". In other words, we have put the buzz back in Britain. We have also put life back into the city of Leeds. When I went there 23 years ago it was a mere shadow of what it is today. It is now one of the most exciting and vibrant cities in the land.
  I know that this is a nice middle-class judgment, but when I went to Leeds there were only two restaurants in the Good Food Guide, both Chinese. Leeds now has Michelin restaurants. The whole of the inner city centre spreads down to the canal south of the tracks. There is a wonderful pedestrian area—[Interruption.] Those on the Labour Front Bench are typically doing what we expect of them. If I say that Leeds now has Harvey Nichols, they will laugh—yet I am talking about the symbols of success. Do not they realise that that is what is important?
  That success has come about not because of the Labour-controlled council in Leeds, but because of the climate of success created by the Conservative Government over the past decade. In particular, we established an urban development corporation in the city centre. At the time, it was opposed by the Labour council; indeed, it is still opposed by the hon. Member for Leeds, Central (Mr. Fatchett). That UDC has galvanised the whole city of Leeds. That is why the canal is alive and vibrant when previously it was derelict. That is why the Royal Armoury is there. That is why there are bars, bistros and restaurants. That is why people are in the city centre at night.
  None of that has anything to do with Leeds city council. What it is doing now is simply on the back of what we have shown is possible. For example, we have shown that it is possible to have a partnership between the public and private sectors. All credit to the Labour party in Leeds for having learnt that lesson. We did up one side of Boar lane. That was so dramatically successful—it has the best hotel in Leeds—that the Labour council is now doing up the other side. Government policies have shown what a catalyst such things can be. It was not a council-led initiative.
  What does the Labour council do, apart from setting up 205 committees and sub-committees, on which it has spent a great deal of money? It has real sickness benefit problems, costing council tax payers millions of pounds. The council needs to get a grip on that. Yet it says that it has no money.
  Let us consider nursery provision. In my constituency one in 10 children gets the chance of a nursery place out of Leeds city council. In the Labour wards, however, it is down to almost every single child or children having a one in two chance of obtaining nursery education. Such is the disgraceful disparity of provision by Leeds city Labour-dominated council.

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  It does not help when the leader of the Labour party also knocks Britain. We have gone from the age of excitement and enthusiasm of the 1980s into the knocking nineties. In his contribution on the Queen's Speech, the right hon. Member for Sedgefield (Mr. Blair) cited two broad, loose, flabby, generalised statistics. He said:
  "We have the lowest proportion of 16 to 18 year-olds in full-time education … of virtually"—
  thankfully he used the word "virtually"—"
  all our main competitors."
  Of course, we have a much lower ranking than the Germans. That has always been true, but he did nor say that when we took office in 1979 just 48 per cent. of 16 to 18-year-olds were staying on in education. That figure now stands at just over 73 per cent. I accept that that is still not good enough, but my God—what a rate of improvement we have seen. It has gone up from 64 per cent. in the past nine years.
  We inherited an appalling state of affairs. There is a long lead time in education, but we have started to get on top of the problem. The right hon. Gentleman then said:
  "We are 42nd in the education league."—[Official Report, 23 October 1996; Vol. 284, c. 19.]
  What on earth does that mean? I found out where that figure came from. I discovered that according to the International Institute for Management Development we are 42nd out of 46 countries. I asked the Library about the methodology used to create the statistic cited by the Leader of the Opposition. The figure was based on a survey conducted among 3,000 business men from 46 countries, who were asked what they thought about their countries' education system in terms of how it helped their economy. Obviously, business men in the Singapore regime put their country at the top, so top of the league table in which we are 42nd is Singapore. Is it surprising that the same type of survey has Chile ranked 34th in 1994, 25th in 1995 and, this year, suddenly ranked seventh? There is no sound statistical methodology behind that load of rubbish.
  The Leader of the Opposition is speaking tosh when he runs down the country by saying that we are 42nd in the education league. That comment is totally and utterly meaningless, but it does a hell of a lot of damage, because that is what other people abroad believe. That is fed through the press and people think that our children are not getting the same opportunities as others. That is ridiculous: they are getting those chances.
  Yesterday, the hon. Member for Sheffield, Brightside (Mr. Blunkett) said that Labour wanted to created a wind of change through the education world, but we have done that, and for one particular reason—we have managed to prise away so much of the decision taking from local councils. As I repeatedly ask my right hon. Friend the Secretary of State for Education and Employment, why do we call our schools "state" schools when in fact they are "council" schools? The councils decide what education methods should be used and determine whether they want grammar schools or comprehensive schools. It was, of course, a Labour Government who tried to force comprehensives on every council, but councils control
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  schools and it is they who determine how much money those schools receive relative to the council's overall budget.
  Mr. George Galloway: Rubbish.
  Dr. Hampson: I will point out two little—
  Mr. Graham rose—
  Dr. Hampson: I cannot give way because time is running out.
  We talk about whittling away the powers of councils, but let me remind hon. Members of two little facts. Until 1957, education was awarded a specific grant, 60 per cent. of which came from central Government. We then introduced a block grant. As a result of the Local Government, Planning and Land Act 1980 we allowed for virement between actual services. We abolished Whitehall's detailed control of housing projects and education. In many ways councils have more powers and they determine how much money goes to their schools.
  Those councils also perpetuated the worst dogmas in education. At last we have an instrument, in the guise of the Office for Standards in Education, which is now trying to sort out the problem. Through research it is highlighting the weakness of the nostrums on which primary education in particular was run. Unless we get the base right it does not matter what we say, and quite rightly, about the needs of the new intellectual revolution of information technology. Unless the base education is correct, one will not be able to produce the people of the calibre necessary to meet the requirements of modern-day industry. Frankly, we know how badly we are performing at the primary level. Ofsted also has evidence that shows that 40 per cent. of secondary schools are not performing as well as they should.
  Education is at the heart of the modern economy and we will be competitive only if we get our education system right. But what have we got? We have Blair's boys, professors at the Institute of Education in London, a woman in Durham and one or two other members of reputable institutions of higher education who are trying to knock Ofsted. They are gunning for Chris Woodhead, the chief inspector of schools. The right hon. Member for Sedgefield owes it to everyone to say that if he becomes Prime Minister he will keep the chief inspector of schools as a symbol of common sense.
  It is not just Mr. Woodhead who talks about the problems. The 1992 Government report also referred to them. When Lord Callaghan was Prime Minister, he said exactly the same in his speech at Ruskin college, when he said that the education system had been running on progressive methods for far too long and that we had to—
  Mr. Deputy Speaker: Order. Time is up.
  7.25 pm
  Mr. John McAllion: Against all expectations, I have quite enjoyed the debate so far. I was particularly amused by the speech of the hon. Member for Leeds, North-West (Dr. Hampson), who told the House that the Tory Government were at last beginning to come to terms with the problems affecting Leeds, after 17 years

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  in office. I do not know how long they need to be in office before actually doing something about the problems faced by the people in Leeds.
  I was also very impressed by the speech of the right hon. Member for Strangford (Mr. Taylor). It started off badly with his glowing testimony to the economic policies pursued by the Tory Government. He then went on to discuss the European Union. I was not quite sure what to make of his remarks as I am a Catholic who already enjoys Scottish dancing. I do not know whether that hinders or helps the case that he was trying to make.
  I was greatly reassured, however, that the right hon. Gentleman was at least prepared to say that the Ulster Unionists will back Labour when we table an amendment to reduce the level of VAT on domestic fuel to 5 per cent. What really amused me was the sight of so many Conservative Members nodding in agreement with him. It seems that they think that Labour is terrible because it will merely reduce the rate to 5 per cent. They all want to put it up to 17.5 per cent., but there they were nodding in agreement and attacking Labour for merely trying to reduce the rate to 5 per cent. That is sheer hypocrisy on the part of those who hold views like that.
  A number of hon. Members on both sides of the Chamber have paid compliments to the Chancellor. I hope that Conservative Members will understand if I choose to criticise his speech, in particular the inconsistency of one of the points that he made when he was in full flow. He claimed that the record of Labour in government was such that we could not possibly match the high levels of public spending which the Government have sustained, particularly on the national health service. In his very next breath, however, he argued that spending more money than the Tories was in Labour's blood and that we could not possibly match the low levels of public investment achieved by the Tory Government. Tory Members must get the line right—it must be one or the other; it cannot be both. If the Chancellor and his hon. Friends continue to make such inconsistent and rubbish arguments in the run-up to the election, they can only expect that the outcome will be as everyone else expects: they will be kicked out of office by the people with short shrift.
  The Chancellor argued that the success of what he described as the Government's firm financial policies rested upon the fact that tax revenues were rising faster than public spending and that, as a result, public borrowing was falling. Technically, he is absolutely right, but let us look behind those technicalities at the real significance of that fact. The key point of the scenario is that public spending is being cut at such a rate that tax revenues, even with a 1p cut in the basic rate of income tax, inevitably rise faster than public spending. What does that mean for the economy and the people? Let me cite the example of local government in Scotland, which this year suffered a cut of £395 million in central Government grant that would otherwise sustain the level of public services in our country.
  This summer, my hon. Friend the Member for Dundee, West (Mr. Ross) and I visited a number of social work facilities around Dundee. We went to a number of family and child centres run by the local Labour council. Unlike private nurseries, those centres are genuinely committed to transforming the life chances of the children and parents who use those centres.
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  I met one young single mother with two children who lived on the 11th floor of a 12-storey block in Dundee. She said that she was going out of her mind because she was trapped in isolation with her children. Then she heard about the family and child centres and, as a result of getting a place in one of those council centres, not only were her children given a flying start which will stand them in good stead for the rest of their school careers, but she was given the space and encouragement at the centre to take classes at the local college, where she obtained an HND qualification and greatly improved her chances of finding employment locally.
  If the only alternative available to that woman and her family had been private nurseries funded by the nursery voucher scheme, there would have been no possibility whatever of her children getting in or of her getting the kind of life opportunity that was given to her. Public spending by councils sustained a network of those centres across Dundee, thus making it possible for children to get places, but because of Government cuts in public spending this year, one of those family and child centres in Dundee has shut. If there are further public spending cuts, which have been consistently promoted by Conservative Members, more of those family and child centres will close and fewer opportunities will be available for people to get off welfare and back into work to begin the economic recovery.
  I agree with the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), who warned about the shift in the balance from income tax towards indirect taxation. I welcomed the commitment by my right hon. Friend the Member for Dunfermline, East (Mr. Brown) to reduce VAT on domestic fuel. At school I was taught about the political unrest in Britain at the end of the Napoleonic wars. We learned about the Spa Field riots, the Manchester blanketeers, the Cato street conspiracy and the radical uprising in Scotland in 1920. It was explained to us that the cause of that working-class unrest was the decision by the then Tory Government to abolish income tax for the rich at the end of the Napoleonic wars and pay for it by increasing indirect taxation, which fell most heavily on the poor.
  That lesson has always stayed with me and in this debate it has made me understand that some things never change. Nearly 200 years on, a Tory Government are still increasing indirect taxes on the poor. We heard in the debate that VAT is to be extended to water, children's clothes, books and many other items and that Conservatives still want to slash tax liabilities. The Chancellor said that he would abolish capital gains tax and inheritance tax and that he would introduce tax cuts for the rich. He mocked the idea of a top rate tax for the rich. Tory Governments never change. Throughout the centuries the same old Tories have been attacking the poor to help pay for the rich.
  This is United Nations international year for the eradication of poverty and it has been marked by the establishment of an all-party group on poverty which intends to raise poverty issues. However, it has yet to be meaningfully recognised by the Government. It was not recognised in the Gracious Speech nor in any of the speeches by Conservative Members. Of course the Gracious Speech has a vision about the kind of economy and society that the Government and the Tory party are trying to create. It will have free and open markets, deregulated markets, as Conservatives always argue. It

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  will he a market in which those who own and control capital can move it anywhere in the world and in which they will be free to invest where they will get the biggest profit. They will be able to produce goods where labour costs are cheap and where the social costs are at an absolute minimum. In that market the only loyalty of the rich and the powerful will be to self-interest and enrichment.
  The greed and avarice of the rich and powerful are dressed up as enterprise and initiative and in that society the poor are discounted and discarded. They do not count or even figure in the speeches or in the thinking of Conservative Members. It is hardly what could be described as high moral ground. It is the kind of economy and society that Conservatives have been shaping for the past 17 years.
  I take issue with two of the main pillars on which this selfish Tory society rests. The first is to be found in the Gracious Speech where it states that the role of the Government is to promote what they call flexible and efficient labour markets in Britain. What does that really mean? First, it means that Britain would be the only country in the European Union not to endorse and accept the social chapter and the social protocol. The Government will deliberately place Britain outside mainstream civilised opinion in Europe and British workers will have fewer rights and poorer conditions of work than workers elsewhere in the EU. What kind of vision is that to put to the people?
  The Government have an undying opposition to a national minimum wage or, to put it another way, they lend their unequivocal support to making sure that British workers are paid poverty wages in the European markets. The job seekers allowance and the hounding of the unemployed and the slashing of their entitlement to benefit forces people into jobs at £1.50 or £2 an hour. That kind of approach, the legal shackling of trade unions, the rejection of social partnership and decent social standards in the workplace, the use of low pay and mass unemployment to impoverish—
  Mr. Deputy Speaker: Order. The hon. Gentleman's 10 minutes are up.
  7.35 pm
  Mr. David Amess: I cannot say that it is a great honour to follow the speech by the hon. Member for Dundee, East (Mr. McAllion), and I say that as a fellow Catholic. His speech shows how Catholics can differ. There were two splendid speeches from the Opposition parties, one by the right hon. Member for Strangford (Mr. Taylor), the Ulster Unionist spokesman, and the other by the hon. Member for Hackney, North and Stoke Newington (Ms Abbott). If such speeches continue to be made, we shall soon make up the three Conservative Members we have lost. I entirely agree with what was said by my hon. Friend the Member for Leeds, North-West (Dr. Hampson).
  This is the last time that I shall contribute to the debate on the Loyal Address as the Member for Basildon, a constituency that I have been proud to represent since 1983. I was the first and I shall be the last Member for that constituency. Boundary changes have meant a 68 per cent. change in the character of the constituency and it has altered in such a way that I would have had 1,000 more votes than I obtained in 1992.
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  My right hon. Friend the Member for Old Bexley arid Sidcup (Sir E. Heath) spoke about Christianity. The Labour party in Basildon could never defeat me, so it decided to attack my children. My wife and I believe in single-sex education and chose an all-boys Catholic school eight miles from where we live and outside the constituency. There are no single-sex schools in Basildon.
  The campaign against that action by my wife and myself was led by a former Labour Member, Arthur Latham. It was joined by the Liberal party in Havering and supported by the Liberal party and the Labour party in Basildon. That is a disgrace, and as a result, my wife did not want me to stand anywhere in the next general election. Those actions by members of the Labour party and the Liberal party were not Christian in any sense.
  I am about the same age as the Leader of the Opposition and the shadow Chancellor, the right hon. Member for Dunfermline, East (Mr. Brown). I was elected on the same day as the Leader of the Opposition and the leader of the Liberal party. I believe today in the things that I believed in when I was elected in 1983, but the leaders of the two main Opposition parties have completely changed their views, ostensibly for public. consumption. The Leader of the Opposition has moved to the right—Opposition Members squirm—and the leader of the Liberal party has ostensibly moved to the left. In their amendment to the Loyal Address, the official Opposition refer to 1979, so presumably that means that Opposition Members can remember 1979. So can Conservative Members, and Britain is far better than it ever was when mismanaged by the Liberal and Labour parties between 1974 and 1979.
  It should not be forgotten that the Labour party has never won elections for 22 years and has never won elections with a majority for 30 years. In the amendment, it has the cheek—I say this in the light of the speech of the hon. Member for Dundee, East—to say that it would like to build a cohesive society and to heal social divisions.
  What claptrap do we get from the Opposition? The shadow Home Secretary suggests that there should be a curfew for children at night. What a stupid idea. How on earth could such a curfew be enforced? Yesterday, the shadow education spokesman said that he wanted a legal contract that could be enforced through the courts between parents, children and schools. Those are the sort of ridiculous policies that the Labour party comes up with.
  I wish to refer to the economy's effects on my constituency. In 1983, the caring Labour party decided to erect above the town hall a huge banner showing the number of people out of work. The caring Labour party wanted every unemployed person to vote Labour. I am pleased to say that electors in Basildon were not fooled in 1983, in 1987 or in 1992. As long as unemployment continued to go up, the Labour party kept the banner up.
  Suddenly, the sign disappeared. When I asked the Labour chief executive where it had gone, he wrote to me to say that the screws were rusty. What a coincidence that, once the arrow started to go down, the screws became rusty. That is how much the Labour party cares about unemployed people.
  What policies did we hear in the stupid speech of the right hon. Member for Dunfermline, East? What suggestions did he make on employment? There is realism on the Conservative Benches. We can never return to full

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  employment. Every day, every week and every month, new technology destroys jobs. It is no good misleading people on the issue and turning it into a political football.
  Since the 1992 election, unemployment in my constituency of Basildon has fallen by 2,000. That is a lot of people back into work and I congratulate the Government on that. Obviously, there has been great disquiet about the economic downturn's effects on people's lives. Conservative Members fully recognise those, but no matter which business or local enterprise I speak to, all of them tell me that the economy is far better. They have never been so busy. That is not to say that they are not still angry about some of the things that have happened.
  Increasingly, we see on the Opposition Benches a mood of triumphalism. That arrogance came through during the Labour party conference. When I made a speech in 1987, hon. Members used to wave at me and say, "Goodbye." When I stood up in 1992, they used to stand up and wave goodbye. I do not know who runs the Labour party these days—is it old Labour, new Labour or simply the people who were elected in 1992?
  Baroness Thatcher transformed Britain for the best. There can be no doubt about it. The fact that the Opposition have changed their views on everything, it seems, is tantamount to agreeing with that. They could never ever be elected on their socialist principles. They are trying to hoodwink the general public and I hope that, when we have the general election campaign and the Opposition try to run the story, "Time for a change," the British people will ask, "Time for a change to what?" It is time for a change from dreadful speeches such as that by the Opposition Front-Bench spokesman during today's debate. I hope that the British people will decide to reject the Opposition and re-elect the Conservative Government.
  7.44 pm
  Mr. Alex Salmond: I suppose that I should start by wishing the hon. Member for Basildon (Mr. Amess) a fond farewell. His wife's proposal that he should not stand for any seat in the coming election would command much cross-party support in the House. He also misinterpreted the excellent speech of the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), who warned politicians of the dangers of trying to corner the market in religion.
  In recent weeks, the Prime Minister, the Leader of the Opposition and their spin doctors have been guilty of just that. It is foolish because, first, as the right hon. Member for Old Bexley and Sidcup said, cardinals, archbishops and even moderators have the right and entitlement to criticise politicians. Secondly, we live in a multicultural society. Hindus, Muslims and Sikhs in our society might feel irritated that Christianity is viewed as the only religion according to some politicians.
  Thirdly, real Christians have a tendency to bite back. The Conservative party south of the border has been embarrassed by the comments of the Catholic bishops. The Labour party north of the border has reacted hysterically to criticisms from Scotland's cardinal. Real Christians are entitled to criticise politicians. When they invite that criticism, politicians leave themselves open and vulnerable. Fourthly, the tenet of Christianity, "By your
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  deeds you are known," is applicable in this case. After all, we are conducting an economic debate on the Queen's Speech and, if morality is to surface anywhere in politics, it should do so at the heart of politics: the economy.
  I listened to an exchange between the two Front-Bench spokesmen that did not have much in it of Christian support for the dispossessed, the poor, the marginalised and the excluded in society. It sounded much more like a Dutch auction on personal taxation, so until the Labour and Conservative parties can have a conference season that does not send pensioners away empty-handed from Blackpool, or allow fat cats to be secure in Bournemouth, and until they can match their words with actions, they should heed carefully the words of the right hon. Member for Old Bexley and Sidcup and ca'canny about bringing religion into politics.
  I do congratulate the shadow Chancellor, however, on his proposal to reduce VAT on fuel from 8 per cent. to 5 per cent. I welcome his conversion to that cause, particularly because, in the debate on the Finance Bill last year, I proposed exactly that: to reduce VAT on fuel from 8 per cent. to 5 per cent. The amendment was defeated by 283 votes to seven. Seven votes is quite a large total compared with many of the votes that the Scottish National party commands in the House. The Labour party not only abstained on that vote, but the hon. Member for Edinburgh, Central (Mr. Darling), no fewer than four times in a single contribution, described my proposal as a "cynical ploy".
  With all this religious fervour creeping through the Labour Front-Bench team, perhaps I should take the attitude of, "Better one sinner that repenteth." None the less, I should like to know why it was a "cynical ploy" for me to advocate that VAT reduction last year, while this year it is represented as a political masterstroke by the shadow Chancellor. None the fewer, both the SNP and the Labour party seem to be making that proposal in the run-up to the coming election.
  I want to direct a remark to the Treasury Front-Bench team in relation to a particular VAT issue. When I was practising as an economist, one of the wisest pieces of advice I received was to remember that, to most people, anything over a million was just a big number. The point that I should like to make involves some detail and has many millions in it, but I hope that Treasury Ministers will take special note of it, because it involves the Government in legal action that could run to many hundreds of millions—perhaps billions—of pounds.
  Many hon. Members have been contacted by constituents concerned about the impact of the Government's proposed rule changes on reclaiming overpaid VAT. As the position now stands, taxpayers can reclaim for a period of three years, or Customs and Excise can make back-assessments for six years. The policy was introduced, by ministerial diktat, by the right hon. Member for Wells (Mr. Heathcoat-Amory) when he was Paymaster General—before he disappeared, earlier this year, into the anti-European never-never land of the Back Benches. We have never debated or passed that policy in the House, but it has been implemented as if it were policy.
  I have a copy of the legal opinion of three of Europe's leading tax lawyers, which I shall arrange to be placed in the Library. Their opinion is that the Government's VAT proposals are illegal because they discriminate between

  719
  taxpayers, and between taxpayers and the Exchequer. Many tens of thousands of companies across the United Kingdom are involved. The tax position is now retrospective, and it seems to breach the fundamentals of European law.
  The Government are facing a series of defeats on VAT in the courts. The first defeat happened last week in the European Court. When I raised the issue at business questions last week and asked whether the Leader of the House was slightly worried by that court reversal, he looked at me and said that he had been informed that the sum involved was only £200 million. What a great relief. Only £200 million was involved last week!
  I am informed, however, that a succession of cases can be taken to the courts, because the Government's position is fundamentally unsound. I advise Treasury Ministers to look for a reasonable compromise with representatives of industry, to review the policy and to put it on a firmer footing. Unless they do so, the issue will blow up in Ministers' faces. Perhaps the Chancellor reckons that he will not be Chancellor when it blows up in the face of the Exchequer. None the less, the wise policy would be to do something about the problem now, and I commend to Treasury Ministers the cross-party early-day motion in today's Order Paper.
  I know that the Chancellor hates tables. He makes speeches in economic debates that disregard economic statistics. He says that we should not pay too much attention to tables, because they can prove anything. It is a fact, however, that if one examines economic growth in the United Kingdom during the Government's time in office, it is slightly less than 2 per cent. per annum, which is lower than the average rate for the rest of the European Union. Moreover, no other country in the EU had the benefit of £120,000 million of North sea oil revenues. It is the most staggering achievement for that windfall endowment of Scottish resources—£24,000 per head for every man, woman and child in Scotland—to be flowing into the Exchequer and yet for the UK growth rate to be lower than the average for all the other countries in Europe, none of which has had the benefit of those resources. The Government do not have anything to be proud of in their economic record of the past 17 years.
  Let us consider the performance of some of the other countries in Europe. We heard about the performance of the Northern Irish economy from the right hon. Member for Strangford (Mr. Taylor), although I did not agree with all the points that he made. Let us consider the performance of the southern Irish economy in recent years. Last year, the UK's economic growth rate was 2.4 per cent., whereas the growth rate in Ireland was 8 per cent. A few weeks ago, while examining economic records of the past few years, I asked the House of Commons Library to perform an exercise and estimate—based on economic forecasts from the Treasury and from the Department of Finance in the Republic of Ireland—when Ireland would overtake the United Kingdom in gross domestic product per capita. The answer was that, based on current forecasts, it would happen in 2000.
  720
  In 2000, the Republic of Ireland will be more prosperous than the United Kingdom. It is already more prosperous than Wales and Northern Ireland, and by 2000, it will be more prosperous per capita than England and Scotland.
  Sir Teddy Taylor: Will the hon. Gentleman give way?
  Mr. Salmond: I am caught by the 10-minutes rule. I know that the hon. Gentleman—
  Sir Teddy Taylor: Will the hon. Gentleman give way?
  Mr. Salmond: I know that the hon. Gentleman will say that Ireland is more prosperous because of European subsidies.
  Sir Teddy Taylor rose—
  Mr. Salmond: Will the hon. Gentleman just listen for a moment, and try to contain his anti-European prejudice? Last year, the subsidies amounted to 1 billion punts of cohesion funding, which is about 2 per cent. of Irish GDP. Last year, growth in Ireland was 8 per cent., which was four times greater than the amount of GDP received in cohesion funding. That is not the explanation for the Irish economic miracle. The Financial Times has described. Ireland as the "tiger economy of Europe".
  The Irish economy does not possess great natural resources, but it is making the most of what it has. When I think of Scotland and our natural resources, and when I consider the fact that the Government are making so little of so much of Scottish resources—greatly under-performing compared with the rest of Europe, and with a growth rate that should bring shame to Treasury Ministers—it is a matter for shame, not congratulation.
  7.54 pm
  Mr. Barry Legg: I begin by dealing with the latter point made by the hon. Member for Banff and Buchan (Mr. Salmond) on the Irish Republic. As the Prime Minister has often confirmed to the House, transfer payments to the Irish Republic from the EU amount to 7 per cent. of Irish GDP. For hon. Members to understand the scale of those transfer payments, the United Kingdom would have to receive £35 billion from the EU for it to receive the same percentage of GDP. There would certainly be an effect on the United Kingdom economy if we were to receive an injection of £35 billion. So I think that the hon. Gentleman's attempt to draw a comparison between the Irish Republic and the UK is nonsense.
  Mr. Salmond: Will the hon. Gentleman give way?
  Mr. Legg: No; I have only 10 minutes.
  I had not intended to speak about the single currency in this debate, but today we have heard two excellent contributions on that subject—from my right hon. Friend the Member for Worthing (Sir T. Higgins) and the hon. Member for Hackney, North and Stoke Newington (Ms Abbott). She argued the dangers of a single currency on economic grounds, and her arguments were very soundly based. The issue will not go away. As she rightly

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  said, whether Britain joins a single currency will be the most important issue that the next Parliament must decide. Both sides of the House will continue to debate that question, and it cannot possibly go away. She made her arguments on the basis of the economic dangers, as did my right hon. Friend the Member for Worthing.
  Conservative Members, however, also feel strongly about the constitutional issues surrounding a single currency, which the Prime Minister referred to at the Dispatch Box on 9 June 1995. To adopt a single currency must mean that one accepts that there will be one state. The intervention by my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) on the speech of my right hon. Friend the Member for Worthing was very interesting, because he said that one cannot have a single market without a single currency, and gave the case of the United States as an example.
  Those who support the federal vision of Europe, as my right hon. Friend clearly does, cannot have it both ways. Yes, if we had a single currency, we would have a United States of Europe, and there would be one state: it would be unavoidable. My right hon. Friend the Member for Worthing also mentioned the issue of transfer payments, and said that the consequences of a single currency would inevitably require them.
  Even in a free market economy, such as the United States, substantial transfer payments take place between states. There would have to be a similar system in Europe to make the European currency area viable. I do not believe that the peoples of Europe form one nation, or that they are close enough to make such payments. In the United Kingdom, people in Surbiton are happy to make transfer payments to people in Huddersfield, for example, because we accept that we are one nation, the United Kingdom.
  I do not believe that the people of Europe are so close that people in Surbiton would be happy for substantial transfer payments to be made to people in Essen, Palermo or Athens, and I do not believe that people in those countries would support transfer payments to other countries in the European Union. As my right hon. Friend the Member for Worthing explained, there are great dangers in pressing ahead with the concept of the single currency.
  Today we have also heard from my hon. Friend the Member for Basildon (Mr. Amess). He certainly had good news to report from Basildon; and I can report that there is also good news from Milton Keynes. My hon. Friend said that there had been 2,000 new jobs in Basildon since the recession had ended. In Milton Keynes in the past 12 months, we have had 5,000 new jobs. Milton Keynes is middle England. The economy is doing extremely well. It is based on high-technology businesses, and 5,000 new jobs have been created. That shows the success and achievement of the Government's economic policy.
  We have a very good economic background, which is delivering a great deal of success for Britain. However, there is much more to do. I do not know whether many hon. Members have seen the Budget submission from the Institute of Directors, which is cogent and well argued.
  One of the issues to which the institute refers is public expenditure. If we are to have a really successful and competitive economy in the United Kingdom, we need to
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  cut public expenditure. We need to reduce it because the most competitive economies in the world have a much lower level of public spending than we have. They are much more vibrant, dynamic and enterprising, and they are getting an increasing share of world trade. We must cut expenditure.
  The analysis of the economy by the Institute of Directors looks at what has been happening to public expenditure compared with GDP. Most hon. Members know that the Conservative party has the objective of reducing public expenditure as a proportion of GDP. The Prime Minister has given a target of 35 per cent. and at our party conference, the Chancellor confirmed that the objective was to get public expenditure below 40 per cent. of GDP. That is one of our core policies.
  The analysis by the Institute of Directors shows how difficult it is to make progress in achieving that key objective. The institute has looked at what has happened to public spending, as a proportion of GDP, over the past four years. It notes that it has fallen from 43.4 per cent. to 42.3 per cent.—there has been a fall of only 1.1 per cent.
  Of that 1.1 per cent. fall, 0.8 per cent. has been due to a lower level of capital spending by the state. The cyclical effects on public expenditure have been positive to the tune of 0.9 per cent. Therefore, total public expenditure has hardly fallen, even though we have been trying to achieve the objective of lowering it as a proportion of GDP.
  The reason is that so much of the culture of the public sector is still geared to spending ever-increasing sums of money. One has only to take an interest in our national accounts to see that, towards the end of financial years, we still get a higher level of spending than is normal on a month-by-month basis. There are still too many incentives within the system for spending more. The Red Book shows that, although the Government have had the objective of reducing public spending in real terms, public spending comes in at a higher level in real terms year after year.
  There must be structural changes within the public sector to get spending down overall. Those structural changes should be directed towards the civil service and towards bureaucracy. We have been pioneers in privatisation, and we need to carry that forward. We need to have plans to privatise the Benefits Agency; we need a lot more imagination in our delivery of social security.
  The Secretary of State for Education and Employment has plans for pilot schemes to get the private sector involved with helping people to find jobs. One of our objectives should be to privatise much of the social security delivery system. We should be looking to privatise jobcentres, which are among the most depressing public sector organisations. We need to privatise them and to bring the free market in, so that we can help the economy to be more dynamic and help people to depend less on welfare.
  There remains a great deal to be done in our next term in office. I have no doubt that we will have policies that will work with the grain and enable us to build on the tremendous economic success that we have seen over the past four years.
  8.4 pm
  Mr. Ian Pearson: On 8 October, coincidentally during the Conservative party conference, the Government announced a U-turn. It did not receive

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  any publicity, because it was on a rather technical matter, involving companies buying their own shares or paying special dividends. The operation of the imputation tax system and its effect on tax-exempt institutions is not something that the average person in the street is particularly interested in.
  The story behind the U-turn, however, is an all too familiar one, of Government dithering, denial and delay, followed by a climbdown and belated action. That would be pretty much par for the course, but what marks this case out is that the Government's negligence has cost the hard-pressed taxpayer an estimated £1.5 billion in lost revenue at the very minimum—probably more.
  To put the matter another way, that amount is the equivalent of a penny off the basic rate of tax or about the total given out in grants to good causes since the national lottery began. It is money that could have been spent on improving education and the health service.
  Basically, we are talking about an abuse of the tax system or, in other words, a tax loophole—something that the Chancellor always denies exists, but which Labour has pointed out consistently. In this case, a range of smart schemes have been drawn up by corporate financiers which have favoured the big pension funds at the expense of other shareholders, cost the taxpayer millions each time, and distorted competition in takeover situations.
  The loophole was becoming known by the time the 1995 Finance Bill was passing through the Commons. and it was glaringly apparent well before the drafting of the 1996 Finance Bill. Selective share buy-backs were increasingly used by large companies throughout 1995, and the use of special dividends was commonplace in the water and electricity industries. Special dividends were also used in other situations, such as Lloyds bank's bid for the TSB and, more recently, Granada's takeover of Forte.
  What is more, respected financial commentators, such as Lex in the Financial Times and Graham Searjeant in The Times, pointed out the abuse. On 10 January this year, the Financial Times talked about
  "the special dividend wheeze and its close cousin the share buyback",
  expressing the view that
  "no public interest is served by a loophole that involves taxpayers subsidising corporate raiders."
  Labour, both here and in the other place, highlighted the abuse. I tabled a number of parliamentary questions on special dividends, and raised the issue on Second Reading of the Finance Bill last year. I even tabled an amendment to the Bill.
  The Government's response was to deny the problem. The Financial Secretary to the Treasury, in a parliamentary answer to me, said:
  "The payment of a special dividend does not involve a tax loophole."—[Official Report, 1 February 1996; Vol. 270, c. 862.]
  The result of that dithering and denial was that the use of share buy-backs and special dividends escalated. Figures from Kleinwort Benson show that quoted companies cut their equity capital by £3 billion from the start of this calendar year to the end of July through selective buy-backs. The cost to the Exchequer of just that is an estimated £750 million, but it could so easily have been avoided by a half-competent Government. So too could the £50 million or so that the Inland Revenue has
  724
  had to pay out to subsidise Granada's takeover of Forte, not to mention the money paid out in other special dividends.
  Exasperatedly, Graham Searjeant of The Times expressed the hope during the summer that
  "even at this late stage, the Chancellor might be stirred from his supercilious lethargy to take some action in his autumn Budget."
  If the Chancellor read that article while he was on the beach, it took him until the week of the Tory party conference to act, and then, typically, he blustered through the climbdown, conveniently forgetting his culpability.
  An Inland Revenue press release quoted the Chancellor as saying:
  "We have seen recently companies buying their own shares or paying special dividends in such a way that the proceeds end up almost entirely in the hands of those who are entitled to payment of a tax credit. This has costs for the Exchequer. and if action is not taken soon that cost would escalate."
  The Chancellor went on:
  "we will not hesitate to take any necessary further action should further evidence of abuse appear."
  At least he finally admitted that it was an abuse—a tax loophole being exploited by companies and their advisers—and in so doing he directly contradicted his Financial Secretary, who all along had said that it was not a loophole.
  Who will take responsibility for losing £1.5 billion of taxpayers' money? The Chancellor? The Financial Secretary? Nobody, it seems, but there again, that is no great surprise. If a financial director of a public company was so incompetent in managing his business's finances, he would be dismissed as soon as his blunder came to light.
  The public have a right to know exactly how much of their money has been thrown away as a result of the Government's ineptitude. If the Government dispute my figures, I challenge them to publish their own figure of the cost to the Exchequer of allowing the loophole to remain open for so long. I also challenge them to justify their rather dodgy figures suggesting that the changes that they have now belatedly made will yield only £200 million in 1997–98 and £400 million from 1998–99 onwards.
  The Government's failure to act speedily in the face of the growing scandal of share buy-backs and special dividends exposes as a myth Tory claims to economic competence. In almost any other sphere of Government spending, a Department losing £1.5 billion would be headline news. The fact that knowledge of this is confined mostly to the City of London and the Treasury cannot disguise the unpleasant truth that it is the honest British taxpayer who has had to fork out to pay for Ministers' negligence. We need answers to those questions.
  8.11 pm
  Mr. John Townend: Listening to the right hon. Member for Dunfermline, East (Mr. Brown), I began to believe that I was living in a different country. To hear the right hon. Gentleman, one would think that we had the worst economy in Europe rather than one of the best. It is not I who says that, but the independent Organisation for Economic Co-operation and Development.

  725
  I cannot believe that someone who holds himself out as a future British Chancellor does not read OECD reports. Whether the figures are for unemployment, inflation, investment, economic growth, the balance of payments, industrial production, competitiveness or industrial disputes, they are satisfactory or going the right way. All those figures are improving.
  When the right hon. Gentleman tried to rubbish the fact that we are the enterprise centre of Europe, and compared us with Hamburg on investment, I could not believe my ears. German manufacturers are not investing in Germany, because Germany is no longer competitive. Volkswagen builds factories in Czechoslovakia, not in Germany, Mercedes in the United States, and Siemens and BMW in Britain.
  In recent months, the Chancellor's success in running the economy has resulted in increasing confidence in the markets, and that is why the pound has been rising. Unfortunately, there is a black spot. Like most of Europe, we are spending, borrowing and taxing too much, but does anyone believe that a Labour Government would spend, borrow or tax less? Of course they would not. They would spend, tax and borrow more. I trust that the Chancellor, who started to deal with the problems in the previous Budget, will continue to deal with them further in this year's Budget. But all Conservative Members agree that we must have a responsible Budget, so reductions in spending should, ideally, be in excess of tax cuts.
  I have been making speeches since 1979, but I regret that not much notice has been taken of them. In 1979, public expenditure was 42.5 per cent. of GDP, and last year it was 42.5 per cent., so I hope that the Chancellor will take a little more notice of me this year.
  I suggest that we cut spending by £7 billion. I should like the Chancellor to spend £5 billion in reducing taxes and the rest on the PSBR. I wrote an article in the "Parliamentary Review" saying how we could do that, but I cannot give the details in 10 minutes, so I refer hon. Members to my article. I hope that there will be no new taxes and no tax increases in the Budget, but any impartial person must accept that the Chancellor has run the economy well, and that his judgment on interest rates has proven correct. I support his 0.25 per cent. increase today.
  It is worth saying that, if we joined a single currency, the Chancellor would not have that flexibility, and I would trust my Chancellor far more than the European bank. However, we must not ignore the fact that, had we not left the ERM thanks to Mr. Soros, or if we had gone back into the ERM in a matter of weeks, as the Opposition demanded, my right hon. and learned Friend would not have been able to present such a glowing report to the House today.
  Supporters of the ERM should now accept that they got it wrong. Hon. Members will recall how they used to claim that, if we left the ERM, interest rates would rise, the pound would fall and, as a result, inflation would rise. The exact opposite happened. Within four months, interest rates had fallen by 4 per cent., and for the last four years, inflation has been the lowest in living memory. That has formed the basis of four years' sustained economic growth.
  Those countries still in the ERM have had low growth and rising unemployment. Would the Opposition like us to have the same level of unemployment as France? Those
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  countries have had mounting fiscal problems, and their problems have been compounded by their mad rush to meet the convergence criteria for a single currency. France in particular is in a real mess.
  The main economic and political issue facing Britain in the next few years is the single currency. I regret that we do not have more open debate on that subject, but that is because the supporters of a single currency will not come out into the open. When the right hon. Member for Dunfermline, East was challenged on a single currency today, he did not mention it in his reply. We all know that he is basically in favour of it, and of a federal Europe.
  Some of those in favour of a single currency say that, if the euro comes into being, it must be in Britain's interests to join. But they will not get involved in detailed discussions or debates, because they know that, if the British people knew the full facts, they would never agree to support it.
  All agree—supporters and opponents of a single currency—that it will be a disaster unless the economies of the various countries which join converge. Eddie George is rightly worried, because the convergence criteria omit one of the most important economic factors—unemployment. Since unemployment in France is 50 per cent. more than in Germany, and that in Spain is almost double that in France, it is clear that there will be no real convergence.
  Another factor which is being ignored is the off-balance sheet liabilities—the contingent liabilities of unfunded state pensions—which in Europe are enormous. The unresolved problem is that, even if the economies converge and we have the euro, there is nothing to stop economies diverging in future. That is likely to happen in a federal state. It happens in America, where the rustbelt states have diverged from the sunbelt states, and the east from the west.
  If that happens, a country could be in deep trouble. It could not deal with the imbalances by reducing interest rates or flexibility in the exchange rates. The first of the alternatives that have been mentioned is a massive movement of population. We saw that in America, with the movement of workers from the north to the south and from the east to the west. But that would be much more difficult in Europe, because of different cultures and languages and the much smaller land base. I am sure that most countries would not want to have to accept millions of incomers.
  That leaves only one other way of dealing with the imbalances—transfers through the federal budget, as happens in America. That would mean that European taxation would have to rise dramatically. More money would go to Brussels, and European expenditure would rise dramatically as more money went to the poorer states. A federal state would become even more deeply embedded; and, like Washington, Brussels would become dominant.
  Britain's problem is that its economy is likely to diverge more than the economy of any other country, because we are different in several important ways. We are the only major oil producer in Europe, so a large rise or fall in the oil price would have one effect on Europe and the opposite effect on our economy. That would probably mean, too, that our economic cycle did not coincide with Europe's.

  727
  We also have a large floating interest rate housing debt. Most housing debt on the continent—it is a smaller debt—is fixed rate, so major changes in interest rates affect us correspondingly more. We saw the effect of the ERM on negative equity when we were a part of it. More importantly, most of our pension liabilities are fully funded and in the private sector.
  Let us consider the so-called benefits of a single currency. Transaction costs are often overstated. Even the EU says that they amount to no more than 0.1 per cent. of GDP. We trade more with the rest of the world, so we would enjoy less of the benefit. Major commodities such as oil and metals are already priced in dollars, anyway.
  The next argument is that the single currency is necessary for the single market. Canada and the USA make up the biggest single market in the world. At the Council of Europe recently. I asked a Canadian Member of Parliament whether, now that the Americans and Canadians have a single market, it would be advantageous to introduce a single currency. He said that it might be in economic terms, but that Canadians would never accept it, because they would lose their independence and be incorporated in the United States.
  It is also said that a single currency would lead to low inflation. That is a load of rubbish. Any country that runs its economy properly can have low inflation—we proved that when we left the ERM.
  It is said that there will be an interest rate premium for countries that stay outside monetary union. There might, in the first instance, but it will swiftly disappear, provided that we run our economy properly as a low-inflation economy based on sound money. Then the interest rate premium might decline, and even turn into a discount.
  As for the disadvantages, the costs will be enormous. In the past week, the Retail Consortium has brought out figures showing that conversion will cost £3.5 billion—that does not include the costs to the banks. Every accounting machine, till and computer will have to be changed, and the costs will surely be passed on to the customer. That will be bad for inflation. We all remember how decimalisation was used as an excuse to put up prices.
  What is more, we would have to hand over all our gold and hard currency reserves to the central bank—
  Mr. Deputy Speaker: Order.
  8.21 pm
  Mr. Brian David Jenkins: The hon. Member for Bridlington (Mr. Townend) mentioned exchange rates, and said that the pound has been getting stronger lately. He failed to point out that our exchange rate now is about 50 per cent. of what it was when the Government came to power in 1979.
  This evening I want to take a look at the Government's claims of long-term prosperity for all. Their record on the economy is perfectly simple: "Don't blame us for anything that goes wrong, but we want the credit for anything that goes right. If there is a recession, it is all the fault of the world economy—we can't do anything about it. But when there's a boom—aren't we doing well?"
  So let us take a look at our position in the world economy relative to other nations. Where do we fit in now? It is not where we were in the 1960s, 1970s or the
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  last century that matters; Parliament should be interested in where we are now and where we will be in the next 10 years. Beyond that it gets a little more difficult to predict with any accuracy.
  On any measure, we have been losing ground against our major competitors. I do not want to repeat all the statistics that are thrown back and forth, but under the Government's stewardship we have slipped from 13th to 18th in the international prosperity league since 1979.
  Since 1992—this shows the costs of the Government's mismanagement—almost 1 million people have signed on as unemployed in the west midlands at least once; and nearly 10 million countrywide have tasted unemployment in that period.
  I find it hard to think of 10 million people, but I can tell the House about one young man who spoke to me a couple of weeks ago. He came up to me at the bar and said, "When are you going to get rid of this lot?" He meant the Government of this country. He went on to tell me that he was 27 years old and that since he left school he had had 19 jobs and not left one of them voluntarily. He had been on short-term contracts or schemes throughout.
  I admired the young man's tenacity. I am not sure that I would have kept going after job No. 16—I might have given up. Then I began to think about his future. With no skills, he is condemned to a lifetime of working for low wages and obtaining benefits to top up his income. We pay out nearly £3 billion a year to low-wage people.
  Every pay rise this young man manages to gain will be taken away from him in benefits. He will be taxed, in effect, not at the much vaunted 40 per cent. "maximum" rate but at 150 per cent., owing to his loss of benefits.
  What is the man's future under this Government? Given their track record, it is possible to forecast his future fairly accurately. If he finds a partner, together they will try for social housing. In some parts of the country they will have a better chance of winning the lottery than of finding social housing. They may find a private rented property and get housing benefit. That will lock them into the poverty trap for years to come. They will not be able to buy because, on a short-term contract, they will find it almost impossible to get a mortgage. They will certainly face higher prices as the Conservative Government pile yet more VAT on all goods.
  If the couple have a family, they will send their children to the same school they attended—except that their children will be in larger classes than they were, being taught by some of the most overworked and stressed members of the work force. Many of the most experienced teachers will have been forced out to allow the school to meet its budget.
  This couple will have no dreams that their children will be better off than they were. They will be the first generation since the second world war not to believe that their children will be better off than they were. Our work force of the future is being given a worse start in life than the work forces of our major industrial competitors.
  If these people fall ill, they will have to go to a privately run hospital, where they will be asked if they are first-class or standard-class customers. They will live in a country where more than half the population pay top-up fees via private health schemes. The former workers, their parents, will be struggling along on ever decreasing

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  pensions. It is easy, when talking about how brilliantly low interest rates now are, to forget that many of these people put savings by in building societies all their lives and therefore rely heavily on interest rates. Low rates may be good for some; they are certainly bad for others.
  All this couple can look forward to is a place in a privately run nursing home, providing they have a house to sell to pay for it.
  We end up with a poorly skilled work force, an education system that is failing our children, declining housing conditions, short-term contracts, job insecurity, fear of unemployment and poverty in old age.
  Some firms are realising that they need skilled workers, and there are young men and women who want to work and need training. Indeed, many more firms are waking up to this fact. But over the past 17 years a lost generation has arisen. We owe those people the opportunity to acquire skills and increase their human capital, to the benefit of us all. In my area, there is one training centre catering for nearly 300,000 people. It currently has 18 apprentices. Many local colleges have given up engineering training altogether. The whole training infrastructure will have to be rebuilt, and even then it will take three years to produce the end product—the skilled workers.
  We are currently 42nd in the world skills league, but is that any wonder after 17 years under a Government who saw Britain's future as being a tourist attraction, heavily reliant on service industries? If we are doing better now, it is because of the efforts of our people and the many small firms that realise that they will have to succeed despite this Government.
  We certainly know that we have had the pain, but have we had any gain? The Government have made millions from North sea oil, billions from the sale of our assets and all the extra taxes and they have had 17 years of unbroken opportunity to govern. Have they produced long-term prosperity for all? They have looked after the privileged few at the expense of the majority. If they want to bring the feel-good factor back to Britain, the Chancellor should say to the Prime Minister tomorrow, "Let's climb into your limousine, go to the palace and tell Her Majesty, we tried, we failed and we're off."
  8.30 pm
  Sir Michael Marshall: Twenty-two years ago today I had the opportunity of taking part in the debate on the Loyal Address in the year in which I was elected. As was customary at that time, I spoke about my constituency. In what must now be my last speech on the Loyal Address, I want to return to that theme. I am glad to see my right hon. Friend the Member for Worthing (Sir T. Higgins) in the Chamber because we have shared many common causes in our part of the world.
  I should like to touch on what I see as the balance sheet of how the country's economic progress has affected my constituency over the past two decades. I make no apology for dealing with this in constituency terms because, I venture to suggest to right hon. and hon. Members, many of the problems faced by my constituency and many of its achievements can be mirrored in many constituencies throughout the country.
  For example, the decline of traditional manufacturing industry has been addressed in various ways. In my constituency, I am happy to say, we have seen the
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  emergence of an important element of the information technology industry. However, at the same time, we have seen the decline of smaller seaside resorts, as has happened in many places along our national coastline.
  I should like to pay tribute to what I see as one of the more enlightened parts of public expenditure and that is the pump priming and beneficial effect of the single regeneration budget as well as the imagination that produces fresh opportunities through millennium proposals.
  In our case, that has brought new partnerships of central and local government together with local businesses and individuals which have yielded positive results. In Bognor Regis, the recently opened SRB-funded business centre and the current millennium proposals for a pier, a pavilion and a lighthouse, are all part of a spirit of new enterprise. In Littlehampton, similar partnerships have emerged from SRB proposals.
  Currently, I place the highest importance on the submission put forward in September this year, based on a public and private partnership for the dredging of the harbour entrance. I know that my hon. Friend the Minister for Science and Technology, who is also responsible for the south coast, is keeping an eye on that proposal following his recent visit. It is only right to remind him that Littlehampton is the only major town on the Sussex coast that has not benefited so far from SRB funding.
  In Arundel, the town's natural attractions and its growth in recent years as a major cultural centre, have facilitated the continued growth of tourism. All that is positive, but Arundel immediately reminds us of the other side of the balance sheet and some of the problems that we have to overcome. We are facing major infrastructure problems which can be resolved only by action from the Treasury, together with co-ordinated Government activity. Arundel, like many other places, desperately needs a by-pass—in our case, as one of the last links in the east-west chain. However, the freezing of the present project after a decade of planning and agreement in principle within the national road building programme, threatens the local economy and the local environment.
  I was grateful to my hon. Friend the Minister for Railways and Roads for visiting Arundel during the summer recess and seeing the situation at first hand. He will be aware of the growing scale of the problem. I believe that the traffic congestion will become appalling because major work will have to be undertaken soon to meet new EU regulations on axle loads, which will affect the railway bridge at Arundel.
  That problem has to be seen as one of the effects of economic stringency in the search for a more stable economy during the lifetime of this Parliament. Now that the signs of that stability are increasingly apparent, we look for imagination and, dare I say it, a sense of urgency, to protect and develop our quality of life.
  Similar objectives apply on house building. I must raise my voice against the constant pressure for the infilling of the few remaining rural and green belt areas. For example, there is the situation involving the Ministry of Agriculture, Fisheries and Food and the former horticultural research institute in Littlehampton. Horticulture remains one of our most important industries. We have the largest glasshouse development in the country along the south coast between Chichester and Worthing. The closure of that institute was a major blow to our local economy.

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  We now have to guard against the immediate clash of policy and objectives between two Government Departments. The Ministry of Agriculture, Fisheries and Food is anxious to protect and preserve farming land such as that on which the institute was based. However, it is required by the Treasury to achieve the maximum sale price on disposal. That means that there is a temptation to sell to those who wish to maximise building for both domestic and industrial use. All that is happening at the same time as MAFF is putting forward its latest consultation initiative on the south downs as an environmentally sensitive area on which the land in question borders. Those are just some of the overall problems and achievements which I urge Ministers to recognise.
  Pensioners are a significant group in my constituency and make up one third of my electorate. I have joined that group recently and so have pledged myself to their interests with renewed vigour. I urged a better deal for pensioners in my maiden speech 22 years ago and I have been glad to see progress in the help provided for the most vulnerable as well as the general increase of the value of the state pension above the rate of inflation. That is in sharp contrast to the position in the last days of the Labour Government when pensioners' savings were being halved every two years.
  There is still much to do. One bugbear of mine has been the historic growth of ad hoc allowances such as the Christmas bonus, the over-80s supplement and other additions which have quickly become out of date. I urge my right hon. and learned Friend the Chancellor to look in his Budget at tax and benefit reform for pensioners. I believe that the raising of the capital disallowance should be built on as part of a reform of capital taxation. Above all, I look for continued progress in targeting those most in need to replace the costly and inefficient aspects of universal provision.
  I cannot end without a word about the wider world as it relates to my constituents. That means the view that they take about Britain's place in Europe and proposals for a common currency. I mentioned earlier the growth in our part of the world of high technology concerns which support the information technology and aerospace industries. I have found that the interests of those small and medium-sized businesses have provided a valuable input to my work in the House on committees such as the parliamentary information technology committee and the parliamentary space committee. In my part of the world, some larger companies such as Matra Marconi are blazing the trail well ahead of the political process in making Franco-British co-operation a success story within the wider context of the European Space Agency, which has enabled Britain to remain competitive with the United States and Russia.
  Looking further afield, we can reflect on the new strength and benefit which we derive from the Government's success in attracting inward capital. In our case, there is the Malaysian ownership of Lec Refrigeration. That is a classic case of a company that has established its base in the United Kingdom as the ideal centre from which to develop its Europewide business.
  Although I am sceptical about the economic distortion implicit in the early introduction of a common currency, and believe that the European Union's enlargement to include countries such as Hungary, Poland and the Czech Republic is a more important political priority, my
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  constituents well understand the major shift in our trading patterns. For example, they reflect on the fact that Britain now exports more to Germany than to the United States and Japan combined and they are rightly critical of those in our political system who would put our involvement and influence in the EU at risk.
  With that final endorsement of the Government's policy—as I believe that they have got the balance right—I take the opportunity to extend my best wishes to those who will follow me and to those who will remain in the House, upon whom will remain the continuing and heavy responsibility to steer the British economy in an increasingly challenging and difficult world.
  8.40 pm
  Mr. Thomas Graham: It is a pleasure to speak in tonight's debate. Last year, as every year previously, I read out a wee poem to the Chancellor of the Exchequer. I am sure that he is used to my poems, although they have never seemed to make much sense to him.
  Recently, on my way to my surgery on a wild and wintry morning in Scotland—the Minister should listen, although I do not think that she will like my story—I was driving along a country road in my constituency when I saw a man walking and decided to stop. When I reached him, I realised that I knew him, so I asked him how he was getting on. "Not so good, Tom," he said, "I am unemployed." He was a builder and a bricklayer and he could not get a job. As we were talking, he told me that another man whom I knew was not very well. "What is the matter with him?" I asked. "He is suffering from serious depression," he said, "He is a carpenter and he cannot get a job." That is a true story. Many people in my constituency want to work. They want the right to a wage and they are suffering from depression created by the Government.
  I have here a report on the construction industry which was sent to most hon. Members. The preface is by Martin Laing CBE, chairman of John Laing Construction Ltd. and chairman of the Construction Industry Employers Council. He is not known to be a Labour supporter, but the report refers to the state of the construction industry and we should bear it in mind that we are debating the economy.
  The report states:
  "The very size of the British construction industry means that when it is in recession, as it is at present, then confidence in the wider economy is also undermined. Construction emerged from recession late—in 1994—and after just one year of modest growth, it fell back into recession in 1995 where it has remained since".
  That does not auger well for the unemployed men and women in my constituency who seek work in the construction industry.
  The report also tells us how many people work in the construction industry—an enormous number—yet in the Queen's Speech, the Government provided no hope for the building workers and made no provision for them. Earlier today, when I asked the Chancellor about the broken-down schools and the potholes in the roads, he said that he was not prepared to spend any more on public sector borrowing. What does that mean? He is condemning the country to being in a state of disrepair, ill equipped for the next century.

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  The Government have lived on the proceeds of privatisation of oil, gas and much more. They have sold their silver. They have an antiques fair every week selling this and that. Do they put anything back into the nation? No, they make their rich friends richer while the poor get poorer. Unemployment is deep seated. Some 2 million people are unemployed.
  The Government continually refer back to the Labour Government in 1979. That is fine. If they continue to do that, their message will be lost. If we fast forward, by the next century I shall talk about that Labour Government and say that, in those days, unemployment was under 1 million and most of my constituents were in work; they could afford holidays, pay their rent and enjoy living. Now they do not enjoy living, because the factories are closed—they have been left empty for so long. However, I am delighted that, last week, a company invested some money in my constituency.
  Car boot sales are booming. I joked about the Minister who sat on the green Conservative Benches and used to say to the unemployed, "On your bike." The car boot sales are full of bikes. They are the bikes that went to empty factories. The people of Scotland—and of some parts of England—travelled about on their bikes, but they could not find employment.
  Young folk in my constituency work for buttons. The low wage economy is shocking. At Glasgow airport—a booming airport—I spoke to a man whom I knew. When I asked, "What are you doing these days?" he said that he was a cleaner. He was working 12 hours a day for £3.06 an hour. He received no payment for anti-social hours. Does anyone in the Minister's family work for £3.06 an hour for a 12-hour day? I do not think that any Minister's family works for such a pittance.
  I have two sons who are both computer buffs. One is an honours graduate who is unemployed. He is into the Internet and the information highway. Both my sons are very computer minded. It is unbelievable that they are unemployed in this day and age. They have applied for hundreds of jobs. They have been to interviews and just missed jobs.
  What a state we are in. The Government are talking about the possibility of dropping income tax to 20p in the pound. That is absolutely ludicrous, given that that represents a golden opportunity to invest money in education and ensure that every man and woman is capable of accessing the information highway.
  It is mind-boggling, as I am sure the Minister has seen. I have seen my son asking questions and getting answers from America within minutes. He asked questions about dyslexia and the woman who replied was a professor in America who said that she had conducted a study. My son has the power of information and education. It is the power to progress. It is mind-boggling that the Government have not sat down and made a plan to provide access to that information for every school, workplace, library and hospital—the Internet also covers medical matters. The Internet is a highway of information and we are a long way behind. The Minister would have people counting on an abacus.
  I am not really computer minded, but I watch my sons. My sons have a bit of backing from their father, but many people in my constituency can hardly afford a hot dinner.
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  Because of Government policy, they cannot afford to pay their rent or their electricity bills. VAT on fuel punishes my constituents, some of whom would do well if they had access to information and education to help them to get a job.
  Graduates are unemployed when they could be training and educating our young people. Boys such as my sons could be educating the nation in information technology. We should not squander that opportunity. It is unbelievable that, after 17 years, the Government struggle to put up an argument for why they are in power. After 17 years, they will not take the right step and have a general election.
  I see that I have only one minute left to speak, but I shall be able to complete my remarks. I heard the Chancellor of the Exchequer knock Scotland like hell. That is because the people of Scotland will have a Scottish Parliament. They will make such a success of that Parliament that it will blaze a trail for the rest of the United Kingdom to follow.
  The young people of Scotland have great talents. The same is to be said of Scottish council employees and civil servants. There is great talent also in the private sector. Scottish politicians of all parties will make an incredible success of a Scottish Government and Parliament that are based in Edinburgh. Take my word for it. We shall blaze a trail and we shall be on the highway of power, information and technology. We shall have well-educated young folk.
  8.50 pm
  Mr. Bob Dunn: I am slightly disappointed because I was hoping that some Labour Back Benchers would take the opportunity to endorse Labour's proposals for a new windfall tax. There has been no endorsement of that policy by Labour Members because they have now realised that a windfall tax on private utilities would be borne by the consumer; in other words, to pay for the tax, companies would be forced either to reduce investment or to charge higher prices. That would be new Labour, higher bills. I gather that the equivalent of a £3 billion increase in windfall tax on the utilities would be a 20 per cent. increase in value added tax.
  I am prepared to predict that, about 10 years from now, there will be very few current Members who will be prepared to admit that they were at any time Europhiles. The Maastricht treaty of the European Union is nothing less than a detailed programme and timetable for economic, monetary and, therefore, political union.
  Behind monetary union stands an unelected European central bank, which would require and have complete control of the foreign exchange reserves of each European Union member state. It would take away the right of individual member states to determine the level of short-term interest rates, exchange rates, money supply and the extent of public expenditure. As a bank, it would decide the level of taxation, a right which is now exercised by our Government and by us as democratically elected Members.
  A European central bank working with the European Commission would secure the total and absolute right to exercise those powers throughout the European Union. It would be able to take punitive action against individual nation states that could not or would not conform. Such a bank, with the Commission, would become the most powerful economic and political institution ever known.

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  The attempt to ensure that identical economies could be established in each of the very different nation states throughout Europe is both dangerous and unrealistic. It is dangerous because, as my right hon. Friend the Member for Worthing (Sir T. Higgins) said, it would create tensions within individual states, tensions that would erupt into social and economic chaos.
  We have only to look at the damage that is being done to France, where every effort to force the country into qualifying for the criteria for monetary union results in public disorder, strikes, disobedience and anarchy. There is a lack of realism, because it will take years to bring the economies of Portugal, Greece and Spain, for example, into line with those of the more advanced nations such as Britain, France and Germany.
  Everyone in the House knows that Britain trades across the world. It always has and it always will. Britain is in deficit with every European Union country, with the exception of Italy. Our profitable trade is with the rest of the world. We benefit from massive inward investment from across the globe because of our refusal to impose the social chapter.
  Labour is determined to end the Prime Minister's opt-out and to introduce the social chapter. I believe that that would bring back the nightmare of pre-1979 industrial anarchy. It is no secret that Germany, especially, resents the opt-out that has been won by the Prime Minister. That is because the Germans are losing investment and jobs to Britain.
  Germany maintains that that gives Britain an unfair advantage and wishes to eliminate it through the imposition of the social chapter. Germany would do so by the introduction of qualified majority voting, a move supported by Labour that would probably result in all reforms introduced since 1979 being eliminated. That, combined with the actions of the European Court of Justice, would see the enforcement of uniform legislation throughout Europe. Our Parliament could do nothing about that. Once protections are swept away never to return, it is all over for those of us who cherish parliamentary democracy and accountability.
  There are two significant areas of incompatibility between us and the rest of Europe, the first being pensions and the second interest rates. In the United Kingdom, the state retirement pension is paid for by those currently in work through tax payments and national insurance contributions. All private pensions are funded. It is a system through which individuals have saved money in an earmarked personal fund.
  That is not true of the continent, where in Germany, France and Italy, for example, pensions are largely funded by the state: thus a time bomb is being created in Europe where an increasing number of pensioners rely on a decreasing number of workers to provide pensions for those beyond statutory retirement age. Given the increased population of retired people, European countries will reach a point where they are unable to pay for pensions and social benefits unless they tax or raise interest rates to levels that we would consider to be unacceptable and penal.
  If we joined a single currency and entered the European monetary union, we would no longer have control over tax and interest rates. We would see our private pension funds being used to subsidise the rest of Europe.
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  The vast majority of personal borrowing in the United Kingdom is for the purchase of housing, and 90 per cent. of that is entered into at variable interest rates. Home ownership is a markedly British phenomenon. In the rest of Europe, there is little home ownership, and that which exists is on low fixed interest rates. It is clear that any rise in interest rates, for the reasons which I have given, would adversely affect British home owners more severely than their numerically fewer European counterparts.
  I am opposed to a single currency and to a federal state of Europe. The Opposition parties hold a different view, with the exception of the hon. Member for Hackney, North and Stoke Newington (Ms Abbott), who made an intelligent and courageous speech.
  The answer to the Labour party's commitment to Europe is simple. In The Sunday Times on 9 August 1992, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said:
  "Labour has converted to Europe because Europe has converted to socialism."
  That is the reason for the commitment.
  I could talk for much longer on my favourite subject of education. There are education black spots in this country, but we must remember where they are and who created them—the Labour party. Labour has condemned all our education reforms. It hates our grammar schools, the city technology colleges, parental choice, the private system and Church schools—but then it always has. Despite the Opposition's best endeavours to cover up that fact, the public are rumbling them. If I were an Opposition Member, I would not be counting my votes before they were cast. There is still a long way to go and the people are ready and willing to back us, because we are backing the people against socialism, against socialism, against socialism.
  8.58 pm
  Mr. Stephen Timms: There is a sense of unreality about today's debate. On the one hand, we have the Chancellor's sunny claims about the wonderful state of the economy and our being the enterprise centre of Europe; and there are statistics that can be called upon to support that version of reality. On the other hand, however, there is the growing fear that what we have today is just another pre-election boom engineered, like Lord Lawson's, for electoral purposes, only to lead to massive economic problems after the general election.
  Understandably, but undeservedly, the Government want to claim the credit for the current apparently relatively benign economic conditions, but behind those superficially relatively benign conditions lurks the threat of yet another disastrous bust just beyond the election.
  The finance director of a major public limited company told me last week that, were it not for the imminent election, interest rates would have been raised well before today. That is what the real condition of the economy unfortunately requires and that is why the Chancellor has reluctantly had to increase interest rates today by 0.25 per cent. Ten days ago, one of the Chancellor's advisers, Professor Congdon, said that the state of the economy was such that a 1 per cent. rise was needed, given the scale of the problems we face.
  The financial director to whom I spoke also told me that a tidal wave of cynicism would engulf any tax cuts in the Budget, because the state of the economy means

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  that they can be neither justified nor sustained. It was no surprise this morning to find the director of the National Institute of Economic and Social Research calling not for tax cuts but for tax increases to restrain inflation. That is the basis of the case that I want to develop today.
  Like everyone else, I shall enjoy a sunny pre-election boom but, in truth, the condition of the economy demands urgent measures if we are not to slide shortly into a post-boom, post-election slump, just as we have done before. Worry about the state of the economy is spreading, and the most disturbing sign of weakness is the state of the public finances. Indeed, even some Conservative Members acknowledged that fact.
  The public sector borrowing requirement remains very high, and the Chancellor's forecasts of it have proved hopelessly over-optimistic. Less than two years ago, he was predicting a PSBR this year of £13 billion, but that figure now looks absurd. Last November, he had revised it up to £22.5 billion. This summer, it was up again—to £27 billion. What he will come up with in the Budget at the end of next month is anyone's guess.
  The Chancellor's sunny optimism about the future depends entirely on the same quality of forecast that he made previously. If we are to share his optimism, we have to do so on the basis of forecasts from the same stable, which has been resoundingly discredited in the past. The Confederation of British Industry estimates that next year's total borrowing requirement could well be as high as this year's, so even the slow downward trend will have ground to a halt altogether. The CBI's concerns about Government borrowing are echoed by the Institute of Directors, which describes the state of the public finances as "ever more disturbing". In a succinct and brutal critique, it says:
  "There is nothing wrong with the Government's objectives for borrowing … The problem is the alarming lack of progress towards"
  achieving them. It is absolutely right.
  The trend in borrowing is downward only because of the unprecedentedly high PSBR a couple of years ago. In 1993–94, the PSBR stood at £45 billion, or 7 per cent. of gross domestic product. That is high compared with the level under the Labour Government in the late 1970s, despite what the Chancellor said. Judging the current level of borrowing against that benchmark is a thin line of defence, especially given that investment in the economy is so low. That is the Government's central economic failure, the source of the gathering storm clouds beyond the sunshine which the Chancellor exhorts us to bask in today—storm clouds pointed to by the interest rate rise announced today.
  Britain is failing on investment. The level of investment has recovered more slowly in the current upturn than in any other this century and, far from being the enterprise centre of Europe, we are investing less per head and less as a proportion of gross domestic product than Portugal or Spain. The welcome investment from outside Europe cannot make up for the disastrously low levels of investment from within the United Kingdom. Our economic problems will not be conquered while that continues.
  I have listened to a long succession of Conservative Members denouncing the project for the single currency, but I am doubtful whether we can overcome our
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  investment problems if France, Germany and Benelux—and, in all probability, Ireland—are in a single currency zone with low interest rates and we are outside, inevitably with higher rates. We will not be able to afford to stay outside the Euro-zone. We need that investment and so far we have failed to secure it. The Government have failed after 17 years to secure it. If we are to continue to have significantly higher interest rates than in continental Europe—we heard the figures for a number of countries earlier, not including Italy, and lower rates will be achieved in the Euro-zone—we will continue to fail to secure the investment that we desperately need.
  One of the signs that we are heading for a short-term, unsustainable boom is the growth in consumer spending. The Chancellor's statement today announcing the interest rate rise boasts of growth in retail spending of 3.5 per cent. The summer economic forecast projected that consumer spending would grow in 1997 by 4.25 per cent. The last time consumer spending grew by that amount was in 1988: two years later, inflation was at 10 per cent. and we were in the midst of a disastrous slump. In the first part of the 1990s, consumer spending averaged less than 1 per cent. growth annually. Last year, it was 2 per cent., it is now 2.5 per cent. and next year the Treasury says it will be more than 4 per cent. That would be great if it lasted.
  I questioned the Governor of the Bank of England when he attended the Treasury Select Committee in July. I asked him whether he thought that a growth in consumer spending of 4.25 per cent. was credible. He said:
  "Certainly, I would think a rate of over 4 per cent … would not be sustainable."
  Just as the Governor was right today on interest rates, I fear that he is also right on that point.
  Aside from interest rates, a number of other indicators are lining up to suggest the return of boom and bust. Barclays bank, in its latest quarterly review, points to signs that it finds worrying. House prices are beginning to spiral upwards, which will bring much-needed relief to people trapped in negative equity, but projections for increases of between 10 and 20 per cent. in the next year are alarming and point to overheating in the economy. The current low levels of retail stock relative to sales are picked out by Barclays because they will have a multiplier effect as they are corrected.
  Barclays points to windfall gains for individuals from building society mergers which might cause a surge in consumer spending. A surge of approvals is likely, we hope, for private finance initiative projects currently stuck in the bottleneck the Government have created. A significant number of lottery-funded projects are likely to start in the next 12 months. All those factors could lead to an unsustainable, short-term surge in capital spending. Barclays concludes:
  "as things stand, the risks appear skewed to a period of demand and output growth significantly above trend."
  The bank is right to warn of the risks of returning to boom and bust. If that is the outcome, after the next election we will face the dreadful problems that we had after the last one.
  If there are to be tax cuts in next month's Budget, there is no doubt whom those cuts should benefit the most. They should be targeted on the least well-off—the people who have lost out most through the policies of the Government. The bottom tenth of the population is 18

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  per cent. worse off, after allowing for housing costs, than they were in 1979. Those are the people whom the Chancellor should be targeting long before he turns his attention to more handouts for well-off people by abolishing taxes on capital gains or on inheritance.
  I warmly welcome the commitment that my right hon. Friend the Member for Dunfermline, East (Mr. Brown) gave earlier to reduce VAT on fuel to 5 per cent. The analysis by the Institute for Fiscal Studies in this year's "green budget" shows that that would benefit the least well-off disproportionately. It constitutes a key first step in the right direction, healing some of the wounds.
  The Institute for Fiscal Studies also considered the impact of a cut in the basic rate of tax to 20p in the pound. The Chancellor has said that he would like to do that in due course. The institute compared the effect of spending the £7.5 billion that would be needed to achieve the Chancellor's objective with that of spending the same money to introduce a lop tax band. Such a band could be introduced on the first £4,000 of taxable income for the £7.5 billion that the Chancellor would need. The institute has demonstrated that the 10p lower rate would be more beneficial not only to those on the lowest incomes but to middle-income earners. In fact, only the top 20 per cent. of earners would gain more from the 20p basic rate than from the lop rate proposed by my right hon. Friend. Putting at least some of that money into an increase in allowances, or a cut in the overall rate of VAT, would further increase benefits for the least well-off. That is the direction in which we should head.
  Today's interest rate rise is the Chancellor's acknowledgement of problems ahead—of storm clouds on the horizon. However attractive the figures look on the surface, the Chancellor has acknowledged, in his decision today, the problems that lurk around the corner. What we need is a permanent higher level of investment in the British economy. That alone can move us forward, but, after 17 years, this Government have failed to deliver it. It is time for another Government to take their place.
  9.11 pm
  Mrs. Ann Taylor: Today's debate really started outside the House. It started this morning, on Radio 4, when the Chancellor demanded that the shadow Chancellor virtually make a full Budget statement today. Indeed, the Chancellor more or less repeated that request in his speech this afternoon.
  I suppose that the Chancellor did that to deflect flak from the interest rate announcement that he made subsequently. Although he told the House—or tried to get the House to believe—that the fact that interest rates were going up was a sign of success, I feel that his statement to that effect carried little conviction.
  Having heard the Chancellor's boast that the rise in interest rates was a sign of success, I looked up what he had said when they fell. Lo and behold, the Chancellor believes that when interest rates go down that, too, is a sign of success. He said then:
  "Interest rates going down reflects our success in creating a prosperous economy."
  The Chancellor's attitude in the House today contrasts markedly with his attitude when interest rates have been cut. Certainly, his attitude in the House is not in line with comments that have been made outside the House, even today.
  740
  Interestingly, today's Evening Standard says that the rise in interest rates
  "awoke Tory fears that it marked a critical upward turning point which could cost the Government dear in the run-up to the General Election."
  Of course we expect Tory Chancellors to tell us that all is well in the run-up to the general election. That is one regard in which they are consistent—telling us that all is well before an election. What the Chancellor said today, and what he will doubtless repeat on Budget day, exactly parallels what happened before the 1992 election.
  I think that we all recall the last Budget before the 1992 election. In his Budget statement, the then Chancellor said:
  "The Government know and have done what is required to build a strong economy."—[Official Report, 12 March 1992; Vol. 205, c. 1063]
  The Prime Minister said that the country had steady, sustainable growth.
  We also remember the election campaign. We remember the daily press conferences, with the Deputy Prime Minister saying that the election was not about education, but about tax; that it was not about health, but about tax; and that it was not about crime, but about tax. In many ways, he was right. However, what he failed to mention was the list of 22 new taxes that the Government had in their back pocket, but which they simply failed to mention during the general election campaign. During those few days between the Tory election Budget and general election day, the economy boomed; afterwards. the country came back down to reality. Having listened to the Chancellor's equally complacent predictions today, I shudder to think what might be the 22 new taxes that the Tories might find, were they ever to be given the chance again.
  I want to say a few words about one tax—value added tax. Before the last election, the Prime Minister said:
  "I have made it clear we have no plans and no need to extend the scope of VAT."
  Yet the very year after the election, the Prime Minister and his Tory Government introduced VAT on domestic power and fuel. The Opposition take a wholly different approach from the Government on that issue. As my right hon. Friend the Member for Dunfermline, East (Mr. Brown) repeated this afternoon, Labour will reduce the rate of VAT on fuel to 5 per cent.—the minimum possible. In contrast, the Tory Government not only introduced that new tax, they tried to double it. Only the actions of the Opposition stopped that. We have been specific about our proposals. We will cut VAT on fuel.
  Mr. David Shaw: Earlier today, I asked the right hon. Member for Dunfermline, East (Mr. Brown) to confirm that the price of Labour abolishing VAT on fuel is a windfall profits tax. A £3 billion windfall profits tax is equivalent to a 20 per cent. rate of VAT. Will the hon. Lady confirm that Labour wants to hit the pensioners of this country with a 20 per cent. tax where there is only an 8 per cent. tax now?
  Mrs. Taylor: I wish that the hon. Gentleman had listened to what I have said or to what my right hon. Friend the Member for Dunfermline, East said earlier. We are not able to abolish VAT on fuel because of the way in which the Government introduced it and because of the

  741
  European Union rules that apply. My right hon. Friend made it quite clear that we will introduce a windfall tax. The calculations that the hon. Gentleman has pretended to make are wholly irrelevant.
  I want to stay with the issue of VAT on fuel. We have made it clear that we will cut the rate to 5 per cent. Will the Government say that they are willing to match that promise? Will the Chancellor do it in the Budget? Or are the Government still harbouring the intention of actually doubling VAT on fuel after the next election? The choice is clear. Labour wants to cut VAT on fuel; the Government want to double it. Ministers should make their position clear this evening.
  I hope that the Leader of the House will cast light on some VAT issues. This afternoon, the Chancellor did not deny the quotation used by my right hon. Friend the Member for Dunfermline, East, showing that the right hon. and learned Gentleman wants to extend the range of goods on which VAT is imposed, including food and children's clothes. The right hon. and learned Gentleman said one significant thing this afternoon, that he wants common minimum rates of VAT throughout the EU. In effect, that would mean giving up zero rating. I hope that the Leader of the House will confirm that and tell us when the Chancellor intends to spell out the time scale.
  Mr. Kenneth Clarke: Before any silly hares get running, I have always made it clear in all my discussions at the European Union and here that the right to retain the zero rates must remain a British option. I have always argued in Europe that we retain the right to decide whether or not we keep the zero option.
  Hon. Members: Apologise.
  Mrs. Taylor: We have got used to U-turns this week, and here is another one from the Chancellor—made between 4 o'clock this afternoon and now. If he agrees on the need to keep zero rating—[Interruption.]
  Mr. Deputy Speaker: Order. While I have been in the Chair every other Member has had a reasonable hearing. I hope that Conservative Members, not least those on the Front Bench, will give the hon. Lady a fair hearing.
  Mrs. Taylor: We welcome that U-turn as far as it goes, but we recall the Government's history on VAT. They denied that they would introduce VAT on fuel, but then did so, so I am not sure that the Chancellor's denial just now is worth a great deal.
  Over the years, we have seen that the Government are willing to put up VAT for ordinary families and pensioners. We have also heard today, yet again, exactly what are the Government's priorities—the abolition of capital gains tax and inheritance tax, which will benefit a few. The abolition of capital gains tax will cost £3 billion a year and the abolition of inheritance tax will cost £1.5 billion a year, and yet half of the benefit of that £4.5 billion will go to just 5,000 people. That is an example of Tory priorities and I do not understand how the Chancellor can contemplate that and still refuse to cut VAT on fuel.
  742
  We have heard a great deal in this debate about the economy and no doubt it will dominate much of the political discussion in the next few weeks, but other important issues have been mentioned today. We have heard a number of well-informed contributions from Members on both sides of the House. For the most part this has been a serious debate, and for Tory Members an often sombre debate, perhaps because of the announcement of the increases in interest rates.
  I should like to comment on many of the well-informed contributions that we have heard, but I will confine my remarks to a few of them. I welcomed very much the speech of the right hon. Member for Old Bexley and Sidcup (Sir E. Heath). In the past, his sentiments were often echoed on the Conservative Benches, but not in recent years. I welcomed in particular his clear statement and acknowledgement of the connection between unemployment and social unease. I thought that his contribution on that should have been listened to carefully by all hon. Members, especially those on the Conservative Benches.
  I also welcome some, although not all, of the comments of the right hon. Member for Worthing (Sir T. Higgins). I cannot say that I agreed with his economic analysis, but I appreciate what he said about the difficulties that business managers may have in the future because the Budget debate and the debate on the Queen's Speech are often so close together and cause significant congestion to parliamentary business. He made a measured contribution, as he often does on such occasions. We shall miss him in future debates, and we shall particularly miss his contributions on House of Commons matters, which have been greatly valued. [HON. MEMBERS: "Hear, hear."]
  The contribution of my hon. Friend the Member for Dudley, West (Mr. Pearson) revealed how difficult it is and how long it takes to get the Government to close even glaring tax loopholes. I thought his example was pertinent and useful to all of us. My hon. Friends the Members for Dundee, East (Mr. McAllion), for South-East Staffordshire (Mr. Jenkins) and for Renfrew, West and Inverclyde (Mr. Graham) made much of a basic fact which cannot be denied: after 17 years in government this Government are running out of excuses. They highlighted extremely well the legacy of a fractured society that will be our inheritance from the Government when the election comes.
  I wish that Conservative Members had taken up that theme of the Father of the House. While so many of them ignore it we shall not make real progress in mending some of the fractures and resolving the difficulties that have been caused by those who believe that there is no such thing as society. Over the past few days there have been salutary warnings that every hon. Member should bear in mind.
  Many hon. Members may feel, as I do, that it is difficult to believe that this Session is only a week old. We used to be told that a week is a long time in politics. On Wednesday four hours was a long time—long enough for what the Daily Mail called a precipitate U-turn. As The Times put it, four hours after the Queen outlined the final pre-election parliamentary programme of 13 Bills the Prime Minister, at a stroke, increased it to 15. Since then. the week has hardly got better for the Prime Minister. Following his concessions on the stalking Bill and the paedophile register, concessions and U-turns have come thick and fast.

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  At the end of the week, the Home Secretary consented to look at the banning of combat knives—a measure that we have been demanding for some years. The Home Secretary was still using the excuse that there were problems of definition. I have a suggestion for the Home Secretary and it is appropriate that the Chancellor is still in his place. If the Home Secretary has a problem trying to define combat knives, he should go to the Chancellor and suggest a tax on them. The Treasury will quickly come up with a definition which could be used to ban the sale of such knives.
  Yesterday's U-turn was quicker than the one on Wednesday. On the issue of caning in schools, the Secretary of State for Education and Employment proved that that right hon. Lady was for turning—or perhaps spinning, if the speed of the change is anything to go by. With apologies to some of my hon. Friends and to rugby league supporters, I have to say that in the past week the Government have let in as many goals as Manchester United, although I suspect that the recovery of Ministers will not be so rapid as that of Manchester United. I have heard the bad news this evening and as a Bolton Wanderers supporter I keep a close watch on Manchester United.
  The difference between the Government and Manchester United is that the football club's European record is somewhat better than that of the Government. The problems that the Government face over Europe have added to their confusion and difficulties. Last week the Prime Minister showed that he has so little confidence in the Minister of Agriculture that he sent four other Ministers to Europe as minders. One can picture the Minister going into the negotiations complete with his "I am a tough guy" hat and flanked by his four minders. Those minders were there not just as Ministers offering support, but to keep an eye on the Minister of Agriculture and probably also on one another.
  The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): I hesitate to interrupt the hon. Lady, but her remarks are over the top. She must be aware that the United Kingdom has four Ministers with responsibility for agriculture. It is reasonable that each part of the UK should be represented.
  Mrs. Taylor: During the whole fiasco throughout the summer, it has not been Government practice to send five Ministers to all these meetings. Nor has it been practice on all occasions for each of those Ministers to come back and spin a slightly different story. With all that happening, it is perhaps no wonder that no progress is being made in Brussels.
  While those Ministers were keeping an eye on one another and trying to outdo one another, in Luxembourg on this occasion, the Chancellor of the Duchy of Lancaster was saying on the radio in London that the Government
  "may have to implement the Florence agreement".
  That is a long way from the Prime Minister's statement:
  "We aim to be in a position to tell the Commission by October that we have met the necessary conditions for decisions to lift the ban on two of the five stages".—[Official Report, 24 June 1996; Vol. 280, c. 21.]
  He also said that he expected the ban on the fourth stage to be lifted by November—within two days from now. No progress has been made on that, although we are nearly at the point by which the Prime Minister said that the ban would be lifted.
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  Confusion still exists in the Government. Consumers lack confidence and farmers face more hardship than ever. What has happened on bovine spongiform encephalopathy is typical of what happens when there is weak leadership and a Government with no sense of direction.
  This Queen's Speech was never going to be ordinary, not just because it is the last one before the general election, but because this will be nowhere near a full Session of Parliament. The Prime Minister has gone on record as saying that the election will take place no later than I May, which would mean that Parliament would be dissolved close to Easter. Of course, it could be earlier. That means that the Government had to select issues that they felt should be a priority or that were not controversial.
  I do not deny that some of the issues chosen should be given priority. I think that virtually all hon. Members agree, although I know that some Conservative Members do not, that there should be stricter controls on guns and that it is right that that should be in the Queen's Speech, but our constituents have many other concerns which have been totally ignored in the Queen's Speech that we have been debating for the past week.
  For a start, job insecurity has not been touched on. We should all remember that since the Prime Minister took over—
  The Parliamentary Under-Secretary of State for Scotland (Mr. Raymond S. Robertson): Hear, hear.
  Mrs. Taylor: The hon. Gentleman says, "Hear, hear," but he may not like it if I tell him that in Britain there are 1 million fewer jobs than when the Prime Minister took over.
  Much needs to be done. Last week, on the first day of the debate, my right hon. Friend the leader of the Labour party gave a list of issues on which the Government should have been taking action. They included a ban on the sale of combat knives, ensuring that we halve the time that it takes for persistent young offenders to come to court, ensuring that we have statutory crime prevention bodies and introducing a statutory minimum wage to tackle the worst abuses of poverty pay and the abuse of taxpayers subsidising poor employers. He said that we should have a Bill to allow capital receipts held by local authorities to be used to build new homes and that we should have a windfall tax. He explained that devolution should be a priority. The Government have had a week to consider those measures, but we still await answers—to discover whether they will make further U-turns.
  The simple fact is that 17 years should have been long enough to get more decisions right. The Queen's Speech contained yet another education Bill, correcting some of the mistakes of the past. The Government have produced 19 education Bills. The Queen's Speech contained another criminal justice Bill, correcting some of the mistakes of the past. The Government have produced 33 criminal justice measures. The Government simply will not listen. That is why they get so much of their legislation wrong.
  Enough is enough. The Government are drifting, and they are dangerous. They are drifting in a manner that is damaging the country. Thank goodness this is the last Queen's Speech from the Conservative Government.
  9.35 pm
  The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): There is something slightly curious about the hon. Member for Dewsbury (Mrs. Taylor) placing such emphasis on legislation correcting the mistakes of the past, in circumstances in which much of the legislation that she and other Opposition Front Benchers now support was vigorously opposed by them when it was introduced. Each successive piece of legislation was accepted by them only when it had been proved that it was what the public wanted and that it was the right thing to do.
  Mrs. Ann Taylor: Does the Leader of the House acknowledge that that is not quite correct, and that it is certainly not correct on all occasions? Does he recall that, in June 1988, I moved an amendment banning the sale of knives to juveniles, and that it took some years for the Government to come round and agree that that was the right decision?
  Mr. Newton: Given that the hon. Lady had been the shadow education spokesperson for some time, and one of those who had persistently opposed the education measures that the Opposition now squirm and wriggle to accept, her point does not make her case. Moreover, in preparing for the final Queen's Speech of this Parliament, the hon. Lady has not taken the precaution of reading the speech of her predecessor, the right hon. Member for Copeland (Dr. Cunningham), after the final Queen's Speech of the previous Parliament. I read it, however, because I had much fun with him in the year after the 1992 general election, after I had become the Leader of the House. Like the hon. Member for Dewsbury, he said:
  "We look forward to the next Gracious Speech, because we shall write it."—[Official Report, 7 November 1991: Vol. 198, c. 662]
  I think that she will find that she is as wrong as her predecessor was five years ago.
  As the hon. Member for Dewsbury rightly said—it is one matter that I do not dispute with her—we have had a debate in which many thoughtful and thought-provoking speeches have been made. I have not heard them all, but I heard, in particular, the speech early in today's debate by the right hon. Member for Manchester, Gorton (Mr. Kaufman), who very courteously apologised to me for the fact that he would not be able to be in the Chamber for the reply to the debate. I am sure that his speech, weighty as it was, will be carefully studied by my right hon. Friends the President of the Board of Trade and the Secretary of State for National Heritage.
  We also heard a thought-provoking—I suppose that that is the right expression—speech from my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath), which I am sure will be widely studied.
  I hope that I may be forgiven for adverting, as the hon. Member for Dewsbury did, to one other speech in the debate—that of my right hon. Friend the Member for Worthing (Sir T. Higgins), which he prefaced by saying that it was his last speech on a Queen's Speech. He will be very much missed for the contributions that he has made on this and other occasions. His remarks, and his references to issues that are of concern to me as Leader of the House, lead me into observing a tradition for the Leader of the House on such occasions—saying something on matters of interest to the House. It may be
  746
  of interest not only to the House, however, as the workings and procedures of the House—although they can hardly yet be described as a daily talking point wherever people gather—undoubtedly have attracted growing public interest in recent years.
  This is, of course, the last such debate in the present Parliament, so it is perhaps worth spending a moment or two on the very substantial changes that we have seen since it was elected in April 1992—changes which I think have contributed significantly to the further evolution of what, because of its capacity to evolve, is probably the most enduring political institution of its kind in the world.
  Although the Jopling report goes back to the previous Parliament—and, as ever, I pay tribute to my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) and to my predecessor, my right hon. Friend the Member for South Norfolk (Mr. MacGregor), for the groundwork that they did—it is in this Parliament that we have carried through what I believe has proved a radical improvement in the way in which we conduct our parliamentary business.
  There are, I know—there are one or two in sight at the moment—those who hanker for what they regard as the good old days when Members, especially Back-Bench Members, were hardly ever away before midnight and rarely before the small hours. I must frankly say that I do not, and I think that the great majority of Members share my view that the House has gained from more sensible and predictable sitting hours; from the better balance between what we do in the Chamber and what we do in Committee; from the development of voluntary agreements—I pay tribute to the hon. Member for Dewsbury and her colleagues for this—between the parties about how business is to be handled; from the greatly increased number of opportunities for individual Members to raise topics of their choice; and from the arrangements for Thursdays and Fridays, which have made it easier for Members to combine their parliamentary duties with their duties elsewhere. I once again express my gratitude to the hon. Member for Dewsbury for her part in that and to my right hon. Friend the Member for Honiton (Sir P. Emery), the Chairman of the Procedure Committee, for the part that he, too, has played.
  If I can claim particular credit for anything, it is for the associated move—not carried out without difficulty—to give the House greater notice of forthcoming business and of recesses. I hope that that is now firmly established, and I am glad to confirm tonight that I shall continue to do everything I can to consolidate that. In saying that, I am conscious that in the equivalent debate last year, I was able to announce dates for the Christmas and Easter recesses. The House will realise that our debate this year is taking a place a month earlier than its equivalent last year. It would be a little premature, especially when we have so recently returned from the recess, to attempt to predict those dates with exact precision. There are also, of course, a number of other uncertainties about the position next spring, which will have to be taken into account. However, I assure the House that as soon as I sensibly can, I shall give it details of the proposals for the Christmas recess although they will, of course, have to be subject to the progress of business.

  747
  Alongside the Jopling reforms there have been a number of other changes, which deserve at least a mention. Prominent among them is the enhanced role that we have given, or are seeking to give, to the Scottish, Welsh and Northern Ireland Grand Committees.
  The Scottish Grand Committee has met regularly in Scotland, not just in Glasgow and Edinburgh, but in a range of other locations, from Inverness to Dumfries. My right hon. Friend the Prime Minister and my right hon. and learned Friend the Chancellor have taken part in the Committee's proceedings and have vigorously defended and explained the Government's policies to Scottish Members before a Scottish audience. That has been widely welcomed.
  We have also made it possible for the Second and Third Readings of Scottish Bills to be debated in the Scottish Grand Committee, which in turn, as I hope will be demonstrated again within the next couple of days, makes it easier to find room in the legislative programme for worthwhile but non-contentious Scottish Bills. We have improved the procedures in a number of other ways as well.
  We have also introduced improved procedures for the Welsh Grand Committee, with the additional ingredient that Welsh Members will be able to conduct parliamentary proceedings in Wales in the Welsh language. My right hon. Friend the Secretary of Stale for Wales is anxious to hold Welsh Grand Committee meetings under the Standing Orders agreed in the House earlier this year. Without entering the controversy between the Government and Opposition Front-Bench Members, I can say only that I hope that it will not be too long before it proves possible to secure an agreement that enables that to happen. It is very much what my right hon. Friend wants.
  In addition, as my right hon. Friend the Prime Minister told the House at the start of the debate—I look to the Benches towards the back—the Government are consulting on developing the role of the Northern Ireland Grand Committee so as to give Northern Ireland Members better opportunities to scrutinise Government policy and draft legislation and to call Ministers to account, and that, too, will be welcomed.
  On another front altogether, on which I touch only briefly for reasons that are perhaps obvious, as the result of the work of the Nolan committee, the Select Committee on Standards in Public Life and now the Select Committee on Standards and Privileges, we have put in place in the course of this Parliament a much clearer and stronger framework of rules in relation to Members' interests and to what can properly be expected of those of us elected to serve here.
  The matters on which I have touched so far have been primarily for the House itself. But if I might put on what I sometimes think of as the other half of my hat, more strictly in my role as a Minister, the Government, too, can claim credit for a number of steps that they have taken to assist the House in various ways.
  For example, five years ago, the document known as "Questions of Procedure for Ministers" and the existence, membership and terms of reference of Cabinet Committees, were either secret or supposed to be secret. Now they are all in the public domain and very much part of the landscape of our debates and of political discussion generally.
  748
  Similarly, the "Code of Practice on Access to Government Information", introduced in April 1994—I realise that there are always people who want to go further in those areas—set out for the first time clear and detailed commitments to provide information to the public and the House. That has been welcomed by the Select Committee on the Parliamentary Commissioner for Administration, chaired by my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey), who concluded that
  "the code has been an important and valuable contribution to more open Government."
  It has certainly been helpful to the House. My right hon. Friend the Chancellor of the Duchy of Lancaster will shortly be submitting a second report to the Committee.
  In that context, I should also mention the equally thorough report from the new Select Committee on Public Service, on the subject of ministerial accountability and responsibility. Again, my right hon. Friend the Chancellor of the Duchy of Lancaster will be submitting the Government's response to that report shortly. I am obviously not in a position to pre-empt his response today, but I can say that much common ground has been established between the Committee and the Government on those important issues and I hope that the Select Committee will find the response positive.
  Of no less importance in strengthening the work of the Executive and the legislature are the steps that we have taken to improve the planning of the legislative programme and the opportunities for scrutiny in the House and among those who will be affected by the measures that we pass.
  During the past three years, we have steadily developed the practice of publishing Bills in draft in advance of bringing them before the House, and I think that it is generally accepted that that has contributed materially to the quality of our legislation. In this Queen's Speech, we have carried that a further step forward by including in it not only the Bills that we intend to bring forward in this Session, but a number of those that we intend to publish in draft.
  Although it is a matter for them rather than for me—I pick up a point made by my right hon. Friend the Member for Worthing in his characteristically thoughtful way—I would welcome it if departmental Select Committees decided to contribute to that process by taking evidence on draft Bills within their field of interest, and reporting on them before the policy is set in concrete.
  I have no doubt that by exposing draft texts to the widest public consultation in that way, we shall ensure that Bills are in an improved state of readiness when they are eventually introduced and that the legislation that Parliament carries through will, as a result, be of a higher quality.
  Mr. A. J. Beith: On that principle, what has happened to the adoption Bill?
  Mr. Newton: There can be no complete commitment to the effect that Bills published in draft in one Session. will automatically qualify for inclusion in the next. There has to be some flexibility to take account of developments affecting the content of the legislative programme. In this legislative programme, a number of Bills—including those on firearms and compensation recovery and one or two others—have rightly been brought into a Session that

  749
  is inescapably shorter than a normal one. They have made it necessary to take a judgment on what other legislation we include in the programme. That embraces the point about the adoption Bill. I hope that the right hon. Gentleman will think it reasonable—I certainly do.
  Mr. Robin Corbett: Talking of orphans, can the right hon. Gentleman confirm that the Prime Minister has made an orphan of the Minister of Agriculture, Fisheries and Food, the right hon. and learned Member for Grantham (Mr. Hogg), who has returned to the Back Benches?
  Mr. Newton: I have already commented on work that the Minister of Agriculture, Fisheries and Food has been doing in Brussels. [Interruption.] I see that he is having an earnest conversation—I do not know whether he has picked up on what has just been said—with my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler). I have no doubt that it is a most congenial exchange for them both.
  As the Prime Minister told the House last week, in the longer term, we want to move towards a two-year legislative programme, consisting of Bills to be enacted in the course of a Session and draft Bills to be published for consultation with a view to their introduction in a later Session. I hope that we shall be able to carry that development forward systematically.
  Although I had not intended to originally, I should like to refer to a point raised by my right hon. Friend the Member for Worthing about the pattern of the parliamentary year. As he rightly said, although it is generally acknowledged that there have been great advantages in bringing public expenditure and taxation decisions together in a unified Budget in the autumn, the combination of that with a long spill-over and a late Queen's Speech in recent years has created additional problems—I am very conscious of them—for the business managers in handling the legislative programme. I think, however, that we have done rather more to tackle that problem this year than my right hon. Friend acknowledged; we had a very short spill-over, creating a space of about a month between the Queen's Speech debate and the Budget. That has eased, if not eliminated, the problem. So I do not think that that in itself would be a cause for a radical change of the kind to which my right hon. Friend referred and to which the Prime Minister referred in a speech earlier this year. I, too, referred to it in a debate on parliamentary procedure in July.
  I nevertheless believe that there is a case for looking at the pattern of the parliamentary year and at the possibility of the State Opening being held in the spring rather than the autumn. That is the suggestion that the Prime Minister floated earlier this year, and I am currently examining it on his behalf. We think that it could give the Session a better balance and improve the ability of the House to scrutinise the Finance Bill and other legislation without losing any of the advantages of the unified Budget. I am interested to hear that my right hon. Friend the Member for Worthing, with his long experience of those matters, sees considerable attraction in the idea.
  I come now to the subject of today's debate and, in particular, to the usual litany of gloom from the right hon. Member for Dunfermline, East (Mr. Brown). Like my
  750
  right hon. and learned Friend the Chancellor, I had a feeling this afternoon that I had heard exactly the same speech last year, the year before that and the year before that. I was reminded that, at about the time the right hon. Gentleman started making these speeches, he made one of his immortal forecasts. He said:
  "I make one Budget forecast—that, after the Budget, unemployment will rise this month, next month and for months afterwards."—[Official Report, 17 March 1993; Vol. 221, c. 289.]
  Since then, unemployment has fallen steadily in virtually every month.
  Having heard the right hon. Gentleman's speech on a number of occasions, this year it finally passed its sell-by date. I got the impression that even his hon. Friends did not really buy it and, certainly, no one else will, because his picture of decay and decline does not correspond with reality.
  Let me remind the right hon. Gentleman and the House of some of the straightforward facts. The economy is now in its fifth year of sustained growth, with exports, investment and consumer expenditure all growing. Since 1992, we have had the longest, strongest and steadiest recovery of any major EU economy. As for the gloomy unemployment forecasts, since its December 1992 peak, claimant unemployment has fallen by over 900,000 to its lowest level for over five and a half years and it is still falling. What is more, employment has risen by over 750,000 since the recovery began.
  We heard some reference this afternoon to exports, as if that was somehow a story of failure. The volume of exported goods has risen by 7 per cent. over the past year, by 17.5 per cent. over the past two years and by 30 per cent. over the past three years. The current account in the latest quarter was the best for nine years.
  We heard a lot about investment, but the climate for investment has seldom been better. As my right hon. and learned Friend the Chancellor said this afternoon, business investment is up 7.2 per cent. on a year ago and whole economy investment is up 3.2 per cent. We all know, although Opposition Members rarely refer to it, that the United Kingdom remains the No. 1 destination for inward investment into the European Union. Underlying inflation is 2.9 per cent. and has been below 4 per cent. for four years, the longest for almost half a century. As my right hon. and learned Friend said, we are achieving growth without the rapid overheating that has characterised earlier recoveries.
  If the right hon. Member for Dunfermline, East does not want to listen to those of us on the Treasury Bench, he might at least acknowledge the views of those who comment on these matters from an international perspective. I am surprised that he did not mention what the International Monetary Fund said earlier this year and what the Organisation for Economic Co-operation and Development said about the strengthening of the economy, the good performance, the good prospects and the extent to which the structural reforms had improved the outlook for the British economy.
  It may be that that last point is the clue. Of course, the structural reforms that are praised so widely internationally are exactly the changes that the Labour party has fought step by step and to which it remains inherently hostile. There can be no clearer illustration of that than the windfall tax, the detail of which is no less elusive than it was before the right hon. Gentleman's

  751
  speech. Once again, the right hon. Gentleman declined to answer any of the questions that my right hon. and learned Friend the Chancellor put to him, but it is clear that the beneficiary will not be the consumer and that the most likely casualty will be the very investment that the right hon. Gentleman claims that he wishes to promote.
  The same is true of the Labour party's policies as a whole. We heard all the same windy talk today, but we heard nothing about the policies that will really make a difference. We heard nothing about the new social chapter policy or the minimum wage policy that will raise business costs, undermine competitiveness, reduce the attractions to foreign investment and make it more difficult to sustain the fall in unemployment over which we have been presiding.
  The Queen's Speech, on which we are concluding our debate today, makes it clear that we shall not join new Labour in its new policies, because they are no less dangerous than the old ones. We shall continue with the policies that my right hon. and learned Friend set out once again in his speech today—policies to sustain the strongest and longest economic recovery in Europe and to do so without inflation and overheating. Our programme corresponds to the needs of the country and deserves the support of the House.
  Question put, That the amendment be made:—
  The House divided: Ayes 283, Noes 305.

  Division No. 3]

  [9.59 pm

  AYES

  Abbott, Ms Diane

  Campbell-Savours, D N

  Adams, Mrs Irene

  Canavan, Dennis

  Ainger, Nick

  Cann, Jamie

  Ainsworth, Robert (Cov'try NE)

  Carlile, Alex (Montgomery)

  Allen, Graham

  Chidgey, David

  Alton, David

  Chisholm, Malcolm

  Anderson, Donald (Swansea E)

  Church, Ms Judith

  Anderson, Ms Janet (Ros'dale)

  Clapham, Michael

  Armstrong, Ms Hilary

  Clark, Dr David (S Shields)

  Ashdown, Paddy

  Clarke, Eric (Midlothian)

  Ashton, Joseph

  Clarke, Tom (Monklands W)

  Austin-Walker, John

  Clelland, David

  Banks, Tony (Newham NW)

  Clwyd, Mrs Ann

  Barnes, Harry

  Coffey, Ms Ann

  Barron, Kevin

  Cohen, Harry

  Battle, John

  Cook, Frank (Stockton N)

  Bayley, Hugh

  Corbett, Robin

  Beckett, Mrs Margaret

  Corbyn, Jeremy

  Beith, A J

  Corston, Ms Jean

  Bell, Stuart

  Cousins, Jim

  Benn, Tony

  Cox, Tom

  Bennett, Andrew F

  Cummings, John

  Benton, Joe

  Cunliffe, Lawrence

  Bermingham, Gerald

  Cunningham, Jim (Cov'try SE)

  Berry, Roger

  Cunningham, Dr John

  Betts, Clive

  Dafis, Cynog

  Blunkett, David

  Davidson, Ian

  Boateng, Paul

  Davies, Bryan (Oldham C)

  Bradley, Keith

  Davies, Chris (Littleborough)

  Bray, Dr Jeremy

  Davies, Denzil (Llanelli)

  Brown, Gordon (Dunfermline E)

  Davies, Ron (Caerphilly)

  Brown, Nicholas (Newcastle E)

  Davis, Terry (B'ham Hodge H)

  Bruce, Malcolm (Gordon)

  Denham, John

  Burden, Richard

  Dewar, Donald

  Byers, Stephen

  Dixon, Don

  Caborn, Richard

  Dobson, Frank

  Callaghan, Jim

  Donohoe, Brian H

  Campbell, Mrs Anne (C'bridge)

  Dowd, Jim

  Campbell, Menzies (Fife NE)

  Dunwoody, Mrs Gwyneth

  Campbell, Ronnie (Blyth V)

  Eastham, Ken

  752

  Etherington, Bill

  Llwyd, Elfyn

  Evans, John (St Helens N)

  Loyden, Eddie

  Ewing, Mrs Margaret

  Lynne, Ms Liz

  Fatchett, Derek

  McAllion, John

  Faulds, Andrew

  McAvoy, Thomas

  Field, Frank (Birkenhead)

  McCartney, Ian (Makerf'ld)

  Flynn, Paul

  Macdonald, Calum

  Foster, Derek

  McFall, John

  Foster, Don (Bath)

  McKelvey, William

  Foulkes, George

  Mackinlay, Andrew

  Fraser, John

  McLeish, Henry

  Fyfe, Mrs Maria

  Maclennan, Robert

  Galbraith, Sam

  McMaster, Gordon

  Galloway, George

  McNamara, Kevin

  Gapes, Mike

  MacShane, Denis

  Garrett, John

  Madden, Max

  Gerrard, Neil

  Maddock, Mrs Diana

  Gilbert, Dr John

  Mahon, Mrs Alice

  Godman, Dr Norman A

  Mandelson, Peter

  Godsiff, Roger

  Marek, Dr John

  Golding, Mrs Llin

  Marshall, David (Shettleston)

  Gordon, Ms Mildred

  Marshall, Jim (Leicester S)

  Graham, Thomas

  Martin, Michael J (Springburn)

  Grant, Bernie (Tottenham)

  Martlew, Eric

  Griffiths, Win (Bridgend)

  Maxton, John

  Grocott, Bruce

  Meacher, Michael

  Gunnell, John

  Meale, Alan

  Hain, Peter

  Michael, Alun

  Hanson, David

  Michie, Bill (Shef'ld Heeley)

  Hardy, Peter

  Michie, Mrs Ray (Argyll Bute)

  Harman, Ms Harriet

  Milburn, Alan

  Harvey, Nick

  Miller, Andrew

  Henderson, Doug

  Mitchell, Austin (Gt Grimsby)

  Hendron, Dr Joe

  Moonie, Dr Lewis

  Heppell, John

  Morgan, Rhodri

  Hill, Keith (Streatham)

  Morley, Elliot

  Hinchliffe, David

  Morris, Alfred (Wy'nshawe)

  Hodge, Ms Margaret

  Morris, Ms Estelle (B'ham Yardley)

  Hoey, Miss Kate

  Morris, John (Aberavon)

  Hogg, Norman (Cumbernauld)

  Mowlam, Ms Marjorie

  Hood, Jimmy

  Mudie, George

  Hoon, Geoffrey

  Mullin, Chris

  Howarth, Alan (Stratf'd-on-A)

  Murphy, Paul

  Howarth, George (Knowsley N)

  Nicholson, Miss Emma (W Devon)

  Howells, Dr Kim

  Oakes, Gordon

  Hoyle, Doug

  O'Brien, Mike (N Warks)

  Hughes, Kevin (Doncaster N)

  O'Brien, William (Normanton)

  Hughes, Robert (Ab'd'n N)

  Olner, Bill

  Hughes, Roy (Newport E)

  O'Neill, Martin

  Hughes, Simon (Southwark)

  Parry, Robert

  Hutton, John

  Pearson, Ian

  Illsley, Eric

  Pendry, Tom

  Ingram, Adam

  Pickthall, Colin

  Jackson, Ms Glenda (Hampst'd)

  Pike, Peter L

  Jackson, Mrs Helen (Hillsborough)

  Pope, Greg

  Jamieson, David

  Powell, Sir Raymond (Ogmore)

  Jenkins, Brian D (SE Staffs)

  Prentice, Mrs B (Lewisham E)

  Johnston, Sir Russell

  Prentice, Gordon (Pendle)

  Jones, Barry (Alyn & D'side)

  Prescott, John

  Jones, Ieuan Wyn (Ynys Môn)

  Primarolo, Ms Dawn

  Jones, Dr L (B'ham Selly Oak)

  Purchase, Ken

  Jones, Martyn (Clwyd SW)

  Quin, Ms Joyce

  Jones, Nigel (Cheltenham)

  Radice, Giles

  Jowell, Ms Tessa

  Randall, Stuart

  Kaufman, Gerald

  Raynsford, Nick

  Keen, Alan

  Reid, Dr John

  Kennedy, Charles (Ross C & S)

  Rendel, David

  Kennedy, Mrs Jane (Broadgreen)

  Robertson, George (Hamilton)

  Kilfoyle, Peter

  Robinson, Geoffrey (Cov'try NW)

  Kirkwood, Archy

  Roche, Mrs Barbara

  Lestor, Miss Joan (Eccles)

  Rogers, Allan

  Lewis, Terry

  Rooker, Jeff

  Liddell, Mrs Helen

  Rooney, Terry

  Litherland, Robert

  Ross, Ernie (Dundee W)

  Livingstone, Ken

  Rowlands, Ted

  Lloyd, Tony (Stretf'd)

  Ruddock, Ms Joan

  753

  Salmond, Alex

  Tipping, Paddy

  Sedgemore, Brian

  Touhig, Don

  Sheerman, Barry

  Trickett, Jon

  Sheldon, Robert

  Turner, Dennis

  Shore, Peter

  Tyler, Paul

  Short, Ms Clare

  Vaz, Keith

  Simpson, Alan

  Walker, Sir Harold

  Skinner, Dennis

  Wallace, James

  Smith, Andrew (Oxford E)

  Walley, Ms Joan

  Smith, Chris (Islington S)

  Wardell, Gareth (Gower)

  Smith, Llew (Blaenau Gwent)

  Wareing, Robert N

  Snape, Peter

  Watson, Mike

  Soley, Give

  Welsh, Andrew

  Spearing, Nigel

  Wicks, Malcolm

  Squire Ms R (Dunfermline W)

  Wigley, Dafydd

  Williams, Alan (Swansea W)

  Steel, Sir David

  Williams, Alan W (Carmarthen)

  Steinberg, Gerry

  Wilson, Brian

  Stevenson, George

  Winnick, David

  Stott, Roger

  Wise, Mrs Audrey

  Strang, Dr Gavin

  Worthington, Tony

  Straw, Jack

  Wray, Jimmy

  Sutcliffe, Gerry

  Wright, Dr Tony

  Taylor, Mrs Ann (Dewsbury)

  Young, David (Bolton SE)

  Taylor, Matthew (Truro)

  Thompson, Jack (Wansbeck)

  Tellers for the Ayes:

  Thurnham, Peter

  Ms Angela Eagle and Mr. Jon Owen Jones.

  Timms, Stephen

  NOES

  Ainsworth, Peter (E Surrey)

  Carrington, Matthew

  Aitken, Jonathan

  Carttiss, Michael

  Alexander, Richard

  Cash, William

  Alison, Michael (Selby)

  Channon, Paul

  Allason, Rupert (Torbay)

  Chapman, Sir Sydney

  Amess, David

  Churchill, Mr

  Ancram, Michael

  Clappison, James

  Arbuthnot, James

  Clark, Dr Michael (Rochf'd)

  Arnold, Jacques (Gravesham)

  Clarke, Kenneth (Rushcliffe)

  Ashby, David

  Clifton-Brown, Geoffrey

  Atkinson, David (Bour'mth E)

  Congdon, David

  Atkinson, Peter (Hexham)

  Conway, Derek

  Baker, Kenneth (Mole V)

  Coombs, Anthony (Wyre F)

  Baker, Nicholas (N Dorset)

  Coombs, Simon (Swindon)

  Baldry, Tony

  Cope, Sir John

  Banks, Matthew (Southport)

  Cormack, Sir Patrick

  Banks, Robert (Harrogate)

  Couchman, James

  Bates, Michael

  Cran, James

  Batiste, Spencer

  Currie, Mrs Edwina

  Bellingham, Henry

  Curry, David

  Bendall, Vivian

  Davies, Quentin (Stamf'd)

  Beresford, Sir Paul

  Davis, David (Boothferry)

  Biffen, John

  Day, Stephen

  Body, Sir Richard

  Devlin, Tim

  Bonsor, Sir Nicholas

  Dicks, Terry

  Booth, Hartley

  Dorrell, Stephen

  Boswell, Tim

  Douglas-Hamilton, Lord James

  Bottomley, Peter (Eltham)

  Dover, Den

  Bottomley, Mrs Virginia

  Duncan, Alan

  Bowden, Sir Andrew

  Duncan Smith, Iain

  Bowis, John

  Dunn, Bob

  Boyson, Sir Rhodes

  Durant, Sir Anthony

  Brandreth, Gyles

  Dykes, Hugh

  Brazier, Julian

  Eggar, Tim

  Bright, Sir Graham

  Elletson, Harold

  Brooke, Peter

  Emery, Sir Peter

  Brown, Michael (Brigg Cl'thorpes)

  Evans, David (Welwyn Hatf'ld)

  Browning, Mrs Angela

  Evans, Jonathan (Brecon)

  Bruce, Ian (S Dorset)

  Evans, Nigel (Ribble V)

  Budgen, Nicholas

  Evans, Roger (Monmouth)

  Burns, Simon

  Evennett, David

  Burt, Alistair

  Faber, David

  Butcher, John

  Fabricant, Michael

  Butler, Peter

  Fenner, Dame Peggy

  Butterfill, John

  Field, Barry (Isle of Wight)

  Carlisle, Sir Kenneth (Linc'n)

  Fishburn, Dudley

  754

  Forman, Nigel

  Lawrence, Sir Ivan

  Forsyth, Michael (Stirling)

  Legg, Barry

  Forsythe, Clifford (S Antrim)

  Leigh, Edward

  Forth, Eric

  Lennox-Boyd, Sir Mark

  Fowler, Sir Norman

  Lester, Sir Jim (Broxtowe)

  Fox, Dr Liam (Woodspring)

  Lidington, David

  Fox, Sir Marcus (Shipley)

  Lilley, Peter

  Freeman, Roger

  Lloyd, Sir Peter (Fareham)

  French, Douglas

  Lord, Michael

  Fry, Sir Peter

  Luff, Peter

  Gale, Roger

  Lyell, Sir Nicholas

  Gallie, Phil

  McCrea, Rev William

  Gardiner, Sir George

  MacGregor, John

  Garel-Jones, Tristan

  MacKay, Andrew

  Garnier, Edward

  Maclean, David

  Gill, Christopher

  McLoughlin, Patrick

  Gillan, Mrs Cheryl

  McNair-Wilson, Sir Patrick

  Goodlad, Alastair

  Madel, Sir David

  Goodson-Wickes, Dr Charles

  Maitland, Lady Olga

  Gorman, Mrs Teresa

  Major, John

  Gorst, Sir John

  Malone, Gerald

  Grant, Sir Anthony (SW Cambs)

  Mans, Keith

  Greenway, Harry (Ealing N)

  Marland, Paul

  Greenway, John (Ryedale)

  Marlow, Tony

  Griffiths, Peter (Portsmouth N)

  Marshall, John (Hendon S)

  Grylls, Sir Michael

  Marshall, Sir Michael (Arundel)

  Gummer, John

  Martin, David (Portsmouth S)

  Hague, William

  Mates, Michael

  Hamilton, Sir Archibald

  Mawhinney, Dr Brian

  Hamilton, Neil (Tatton)

  Merchant, Piers

  Hampson, Dr Keith

  Mills, Iain

  Hanley, Jeremy

  Mitchell, Andrew (Gedling)

  Hannam, Sir John

  Mitchell, Sir David (NW Hants)

  Hargreaves, Andrew

  Moate, Sir Roger

  Harris, David

  Molyneaux, Sir James

  Haselhurst, Sir Alan

  Monro, Sir Hector

  Hawkins, Nick

  Montgomery, Sir Fergus

  Hawksley, Warren

  Needham, Richard

  Heald, Oliver

  Nelson, Anthony

  Heath, Sir Edward

  Neubert, Sir Michael

  Heathcoat-Amory, David

  Newton, Tony

  Heseltine, Michael

  Nicholson, David (Taunton)

  Hicks, Sir Robert

  Norris, Steve

  Higgins, Sir Terence

  Onslow, Sir Cranley

  Hill, Sir James (Southampton Test)

  Oppenheim, Phillip

  Hogg, Douglas (Grantham)

  Page, Richard

  Horam, John

  Paice, James

  Hordern, Sir Peter

  Patnick, Sir Irvine

  Howard, Michael

  Patten, John

  Howell, David (Guildf'd)

  Pawsey, James

  Howell, Sir Ralph (N Norfolk)

  Peacock, Mrs Elizabeth

  Hughes, Robert G (Harrow W)

  Pickles, Eric

  Hunt, David (Wirral W)

  Porter, David (Waveney)

  Hunt, Sir John (Ravensb'ne)

  Portillo, Michael

  Hunter, Andrew

  Powell, William (Corby)

  Hurd, Douglas

  Rathbone, Tim

  Jack, Michael

  Redwood, John

  Jackson, Robert (Wantage)

  Renton, Tim

  Jenkin, Bernard (Colchester N)

  Richards, Rod

  Jessel, Toby

  Riddick, Graham

  Johnson Smith, Sir Geoffrey

  Robathan, Andrew

  Jones, Gwilym (Cardiff N)

  Roberts, Sir Wyn

  Jones, Robert B (W Herts)

  Robertson, Raymond S (Ab'd'n S)

  Jopling, Michael

  Robinson, Mark (Somerton)

  Kellett-Bowman, Dame Elaine

  Robinson, Peter (Belfast E)

  King, Tom

  Roe, Mrs Marion

  Kirkhope, Timothy

  Rowe, Andrew

  Knapman, Roger

  Rumbold, Dame Angela

  Knight, Mrs Angela (Erewash)

  Sackville, Tom

  Knight, Greg (Derby N)

  Sainsbury, Sir Timothy

  Knight, Dame Jill (Edgbaston)

  Scott, Sir Nicholas

  Knox, Sir David

  Shaw, David (Dover)

  Kynoch, George

  Shaw, Sir Giles (Pudsey)

  Lait, Mrs Jacqui

  Shephard, Mrs Gillian

  Lamont, Norman

  Shepherd, Sir Colin (Heref'd)

  Lang, Ian

  Shepherd, Richard (Aldridge)

  755

  Shersby, Sir Michael

  Tracey, Richard

  Sims, Sir Roger

  Tredinnifck, David

  Skeet, Sir Trevor

  Trend, Michael

  Smith, Sir Dudley (Warwick)

  Trotter, Neville

  Smith, Tim (Beaconsf'ld)

  Twinn, Dr Ian

  Soames, Nicholas

  Vaughan, Sir Gerard

  Speed, Sir Keith

  Waldegrave, William

  Spencer, Sir Derek

  Walden, George

  Spicer, Sir Jim (W Dorset)

  Walker, Bill (N Tayside)

  Spicer, Sir Michael (S Worcs)

  Waller, Gary

  Spring, Richard

  Ward, John

  Sproat, Iain

  Wardle, Charles (Bexhill)

  Squire, Robin (Hornchurch)

  Waterson, Nigel

  Stanley, Sir John

  Watts, John

  Steen, Anthony

  Wells, Bowen

  Stephen, Michael

  Wheeler, Sir John

  Stern, Michael

  Whitney, Ray

  Streeter, Gary

  Whittingdale, John

  Widdecombe, Miss Ann

  Sumberg, David

  Wiggin, Sir Jerry

  Sweeney, Walter

  Wilkinson, John

  Sykes, John

  Willetts, David

  Tapsell, Sir Peter

  Wilshire, David

  Taylor, Ian (Esher)

  Winterton, Mrs Ann (Congleton)

  Taylor, John D (Strangf'd)

  Winterton, Nicholas (Macclesf'ld)

  Taylor, John M (Solihull)

  Wolfson, Mark

  Taylor, Sir Teddy

  Wood, Timothy

  Temple-Morris, Peter

  Yeo, Tim

  Thomason, Roy

  Young, Sir George

  Thompson, Sir Donald (Calder V)

  Thompson, Patrick (Norwich N)

  Tellers for the Noes:

  Townend, John (Bridlington)

  Mr. Richard Ottaway and Mr. Sebastian Coe.

  Townsend, Cyril D (Bexl'yh'th)

  Question accordingly negatived.
  Amendment proposed, at the end of the Question, to add,
  "but humbly regret that the Gracious Speech fails to set out adequate proposals to create an excellent education system for all pupils, to reform Britain's discredited system of government or to make the necessary improvements to the NHS to restore it as a first class provider of care; and further regret that measures outlined in the Gracious Speech on crime are designed for political effect rather than practical effectiveness and will do little to strengthen the police and prevent crime."—[Mr. Beith.]
  Question put forthwith, pursuant to Standing Order No. 32 (Calling of amendments at end of debate), That the amendment be made:—
  The House divided: Ayes 38, Noes 300.

  Division No. 4]

  [10.15 pm

  AYES

  Alton, David

  Maclennan, Robert

  Ashdown, Paddy

  Maddock, Mrs Diana

  Beith, A J

  Marek, Dr John

  Bruce, Malcolm (Gordon)

  Michie, Mrs Ray (Argyll Bute)

  Campbell, Menzies (File NE)

  Molyneaux, Sir James

  Canavan, Dennis

  Nicholson, Miss Emma (W Devon)

  Carlile, Alex (Montgomery)

  Rendel, David

  Chidgey, David

  Robinson, Peter (Belfast E)

  Dafis, Cynog

  Salmond, Alex

  Davies, Chris (Littleborough)

  Steel, Sir David

  Ewing, Mrs Margaret

  Taylor, John D (Strangf'd)

  Forsytne, Clifford (S Antrim)

  Taylor, Matthew (Truro)

  Harvey, Nick

  Thurnham, Peter

  Hughes, Simon (Southwark)

  Tyler, Paul

  Johnston, Sir Russell

  Wallace, James

  Jones, Ieuan Wyn (Ynys Môn)

  Welsh, Andrew

  Jones, Nigel (Cheltenham)

  Wigley, Dafydd

  Kennedy, Charles (Ross C & S)

  Llwyd, Elfyn

  Tellers for the Ayes:

  Lynne, Ms Liz

  Mr. Archy Kirk wood and Mr. Don Foster.

  McCrea, Rev William

  756

  NOES

  Ainsworth, Peter (E Surrey)

  Douglas-Hamilton, Lord James

  Aitken, Jonathan

  Dover, Den

  Alexander, Richard

  Duncan, Alan

  Alison, Michael (Selby)

  Duncan Smith, Iain

  Allason, Rupert (Torbay)

  Dunn, Bob

  Amess, David

  Durant, Sir Anthony

  Ancram, Michael

  Dykes, Hugh

  Arbuthnot, James

  Eggar, Tim

  Arnold, Jacques (Gravesham)

  Elletson, Harold

  Ashby, David

  Emery, Sir Peter

  Atkinson, David (Bour'mth E)

  Evans, David (Welwyn Hatf'ld)

  Atkinson, Peter (Hexham)

  Evans, Jonathan (Brecon)

  Baker, Kenneth (Mole V)

  Evans, Nigel (Ribble V)

  Baker, Nicholas (N Dorset)

  Evans, Roger (Monmouth)

  Baldry, Tony

  Evennett, David

  Banks, Matthew (Southport)

  Faber, David

  Banks, Robert (Harrogate)

  Fabricant, Michael

  Bates, Michael

  Fenner, Dame Peggy

  Batiste, Spencer

  Field, Barry (Isle of Wight)

  Bellingham, Henry

  Fishburn, Dudley

  Bendall, Vivian

  Forman, Nigel

  Beresford, Sir Paul

  Forsyth, Michael (Stirling)

  Biffen, John

  Forth, Eric

  Body, Sir Richard

  Fowler, Sir Norman

  Bonsor, Sir Nicholas

  Fox, Dr Liam (Woodspring)

  Booth, Hartley

  Fox, Sir Marcus (Shipley)

  Boswell, Tim

  Freeman, Roger

  Bottomley, Peter (Eltham)

  French, Douglas

  Bottomley, Mrs Virginia

  Fry, Sir Peter

  Bowden, Sir Andrew

  Gale, Roger

  Bowis, John

  Gallie, Phil

  Boyson, Sir Rhodes

  Gardiner, Sir George

  Brandreth, Gyles

  Garel-Jones, Tristan

  Brazier, Julian

  Garnier, Edward

  Bright, Sir Graham

  Gill, Christopher

  Brooke, Peter

  Gillan, Mrs Cheryl

  Brown, Michael (Brigg Cl'thorpes)

  Goodlad, Alastair

  Browning, Mrs Angela

  Goodson-Wickes, Dr Charles

  Bruce, Ian (S Dorset)

  Gorman, Mrs Teresa

  Budgen, Nicholas

  Gorst, Sir John

  Burns, Simon

  Grant Sir Anthony (SW Cambs)

  Burt, Alistair

  Greenway, Harry (Ealing N)

  Butcher, John

  Greenway, John (Ryedale)

  Butler, Peter

  Griffiths, Peter (Portsmouth N)

  Butterfill, John

  Grylls, Sir Michael

  Carlisle, John (Luton N)

  Gummer, John

  Carlisle, Sir Kenneth (Linc'n)

  Hague, William

  Canington, Matthew

  Hamilton, Sir Archibald

  Carttiss, Michael

  Hamilton, Neil (Tatton)

  Cash, William

  Hampson, Dr Keith

  Channon, Paul

  Hanley, Jeremy

  Chapman, Sir Sydney

  Hannam, Sir John

  Churchill, Mr

  Hargreaves, Andrew

  Clappison, James

  Harris, David

  Clark, Dr Michael (Rochf'd)

  Haselhurst, Sir Alan

  Clarke, Kenneth (Rushcliffe)

  Hawkins, Nick

  Clifton-Brown, Geoffrey

  Hawksley, Warren

  Coe, Sebastian

  Heald, Oliver

  Congdon, David

  Heath, Sir Edward

  Conway, Derek

  Heathcoat-Amory, David

  Coombs, Anthony (Wyre F)

  Heseltine, Michael

  Coombs, Simon (Swindon)

  Hicks, Sir Robert

  Cope, Sir John

  Higgins, Sir Terence

  Cormack, Sir Patrick

  Hill, Sir James (Southampton Test)

  Couchman, James

  Hogg, Douglas (Grantham)

  Cran, James

  Horam, John

  Currie, Mrs Edwina

  Hordern, Sir Peter

  Curry, David

  Howard, Michael

  Davies, Quentin (Stamf'd)

  Howell, David (Guildf'd)

  Davis, David (Boothferry)

  Howell, Sir Ralph (N Norfolk)

  Day, Stephen

  Hughes, Robert G (Harrow W)

  Devlin, Tim

  Hunt, David (Wirral W)

  Dicks, Terry

  Hunt, Sir John (Ravensb'ne)

  Dorrell, Stephen

  Hunter, Andrew

  757

  Hurd, Douglas

  Merchant Piers

  Jack, Michael

  Mills, Iain

  Jackson, Robert (Wantage)

  Mitchell, Andrew (Gedling)

  Jenkin, Bernard (Colchester N)

  Mitchell, Sir David (NW Hants)

  Jessel, Toby

  Moate, Sir Roger

  Johnson Smith, Sir Geoffrey

  Monro, Sir Hector

  Jones, Gwilym (Cardiff N)

  Montgomery, Sir Fergus

  Jones, Robert B (W Herts)

  Needham, Richard

  Kellett-Bowman, Dame Elaine

  Nelson, Anthony

  King, Tom

  Neubert, Sir Michael

  Kirkhope, Timothy

  Newton, Tony

  Knight Mrs Angela (Erewash)

  Nicholson, David (Taunton)

  Knight Greg (Derby N)

  Norris, Steve

  Knight Dame Jill (Edgbaston)

  Onslow, Sir Cranley

  Knox, Sir David

  Oppenheim, Phillip

  Kynoch, George

  Page, Richard

  Lait, Mrs Jacqui

  Paice, James

  Lamorrt, Norman

  Patrick, Sir Irvine

  Lang, Ian

  Patten, John

  Lawrence, Sir Ivan

  Pawsey, James

  Legg, Barry

  Peacock, Mrs Elizabeth

  Leigh, Edward

  Pickles, Eric

  Lennox-Boyd, Sir Mark

  Porter, David (Waveney)

  Lester, Sir Jim (Broxtowe)

  Portillo, Michael

  Lidington, David

  Powell, William (Corby)

  Lilley, Peter

  Rathbone, Tim

  Lloyd, Sir Peter (Fareham)

  Redwood, John

  Lord, Michael

  Renton, Tim

  Luff, Peter

  Richards, Rod

  Lyell, Sir Nicholas

  Riddick, Graham

  MacGregor, John

  Robathan, Andrew

  MacKay, Andrew

  Roberts, Sir Wyn

  Maclean, David

  Robertson, Raymond S (Ab'd'n S)

  McLoughlin, Patrick

  Robinson, Mark (Somerton)

  McNair-Wilson, Sir Patrick

  Roe, Mrs Marion

  Madel, Sir David

  Rowe, Andrew

  Maitland, Lady Olga

  Rumbold, Dame Angela

  Major, John

  Sackville, Tom

  Malone, Gerald

  Sainsbury, Sir Timothy

  Mans, Keith

  Scott Sir Nicholas

  Marland, Paul

  Shaw, David (Dover)

  Martow, Tony

  Shaw, Sir Giles (Pudsey)

  Marshall, John (Hendon S)

  Shephard, Mrs Gillian

  Marshall, Sir Michael (Arundel)

  Shepherd, Sir Colin (Heref'd)

  Martin, David (Portsmouth S)

  Shepherd, Richard (Aldridge)

  Mates, Michael

  Shersby, Sir Michael

  Mawhinney, Dr Brian

  Sims, Sir Roger

  758

  Skeet, Sir Trevor

  Trend, Michael

  Smith, Sir Dudley (Warwick)

  Trotter, Neville

  Smith, Tim (Beaconsf'ld)

  Twinn, Dr Ian

  Soames, Nicholas

  Vaughan, Sir Gerard

  Speed, Sir Keith

  Waldegrave, William

  Spencer, Sir Derek

  Walden, George

  Spicer, Sir Jim (W Dorset)

  Walker, Bill (N Tayside)

  Spicer, Sir Michael (S Worcs)

  Waller, Gary

  Spring, Richard

  Ward, John

  Sproat, Iain

  Wardle, Charles (Bexhill)

  Squire, Robin (Hornchurch)

  Waterson, Nigel

  Stanley, Sir John

  Watts, John

  Steen, Anthony

  Wells, Bowen

  Stephen, Michael

  Wheeler, Sir John

  Stern, Michael

  Whitney, Ray

  Streeter, Gary

  Whittingdale, John

  Sumberg, David

  Widdecombe, Miss Ann

  Sweeney, Walter

  Wiggin, Sir Jerry

  Sykes, John

  Wilkinson, John

  Tapsell, Sir Peter

  Willetts, David

  Taylor, Ian (Esher)

  Wilshire, David

  Taylor, John M (Solihull)

  Winterton, Mrs Ann (Congleton)

  Taylor, Sir Teddy

  Winterton, Nicholas (Macclesf'ld)

  Temple-Morris, Peter

  Wolfson, Mark

  Thomason, Roy

  Wood, Timothy

  Thompson, Sir Donald (Calder V)

  Yeo, Tim

  Thompson, Patrick (Norwich N)

  Young, Sir George

  Townend, John (Bridlington)

  Townsend, Cyril D (Bexl'yh'th)

  Tellers for the Noes:

  Tracey, Richard

  Mr. Richard Ottaway and Mr. Roger Knapman.

  Tredinnick, David

  Question accordingly negatived.
  Main Question put and agreed to.
  Resolved,
  That an humble Address be presented to Her Majesty, as follows:
  Most Gracious Sovereign,
  We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.
  To be presented by Privy Councillors or Members of Her Majesty's Household.

  Organophosphate Pesticides
  Motion made, and Question proposed, That this House do now adjourn.—[Mrs. Lait.]
  10.28 pm
  Mr. Paul Tyler: I am delighted to note that a Minister from the Department of Health is to reply to the debate. That shows a recognition that there are wider implications for public health generally, rather than just for specific groups of occupations, from organophosphate compounds. I hope that during his preparation for his speech, the Minister managed to see tonight's BBC programme which revealed a close causal connection between OPs and chronic fatigue syndrome—what used to be called ME—as a result of the work of Professor Peter Behan.
  The potential danger to human health of exposure to OPs was first identified 45 years ago by the Zuckerman committee. That is scarcely surprising, because these potentially lethal chemicals were originally developed by the Nazis as part of their nerve gas programme. Since then, increasing evidence of the damage to the individual's nervous system, together with some specific research studies, have led to ever more stringent official guidance on the use and misuse of OPs. Tonight's short debate offers an opportunity for the Government—all the Departments involved—to set out their current policies.
  I first became concerned some six years ago, when I met a number of sheep farmers and farm workers from the south-west whose lives and livelihoods had been simply ruined by continuing ill health after dipping their sheep. Since they had been virtually forced to use OP dips, while the Government were still making that treatment for scab compulsory twice a year, the responsibility clearly lay with Whitehall.
  On re-entering the House in 1992, I gathered together an informal all-party group to investigate the matter further, and we have maintained constant pressure on Ministers. I hope that there may be time this evening for one or two of my colleagues to contribute. I am glad to see here the hon. Members for Taunton (Mr. Nicholson), for Pembroke (Mr. Ainger) and for Meirionnydd Nant Conwy (Mr. Llwyd), all of whom have been with me throughout the campaign and have met Ministers with me.
  Because of those origins, the series of questions that I wish to put to the Minister must necessarily start with the agricultural and horticultural use of OPs. First, a number of farm workers have now succeeded in obtaining industrial injury benefit for serious ill health caused by exposure to OP sheep dips. Is it not unjust that self-employed farmers with similar symptoms cannot obtain similar compensation?
  Secondly, the increasing level of precaution and recommended protective clothing for OP sheep dipping, advanced by the Health and Safety Executive in the past 10 years and more, makes it clear that the previous advice was simply inadequate. Do the Government now accept the responsibility for that former failure?
  Thirdly, the HSE guidance note, Medical Series 17, entitled "Biological monitoring of workers exposed to organophosphorous pesticides", which was originally prepared in 1980, revised in 1986, and then revised again in 1987, lists a wide range of symptoms, from simple nausea to major effects on the nervous system. The
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  revised version I have with me warns of complications when a victim undergoes simple operations and is subject to a common anaesthetic. Why was that advice not made available to all sheep farmers, their general practitioners, their consultants and all others concerned, as soon as it was available?
  Fourthly, the Minister of State for the Armed Forces admitted to me earlier this month, contrary to his previous assurances, that hundreds of service personnel were exposed to OP pesticides during the Gulf war. That was three years after specific warnings were given in MS 17 by the HSE and by the responsible Ministries.
  Why were those personnel needlessly contaminated with those extremely dangerous chemicals, and even told not to wear protective clothing in the Gulf because it might be damaged? Why did it take so long for Ministers to admit that mistake, and how quickly can the Government now establish whether OPs could have been the cause of widespread experience of Gulf war syndrome?
  Mr. Elfyn Llwyd: Does the hon. Gentleman share my alarm that highly acclaimed research in 1977 by Korsak and Sato, which proved that brain damage was likely to occur when a person was exposed to those chemicals, was not heeded by the Government? That danger has been known since 1977 at the very least.
  Mr. Tyler: I am grateful to the hon. Gentleman, who instances yet another example of the availability of information on OPs, which is then not made available to the key people who should know about it.
  I have a long list of additional questions from the National Gulf Veterans and Families Association, on which I obviously cannot spend sufficient time this evening, but which I will hand to the Minister after the debate. I hope that we will receive some written responses to questions, if he is unable to comment on all the issues tonight.
  Fifthly, which Department is responsible now in Whitehall for ensuring that everyone who may come into contact with OPs, or who may be called upon to treat the victims of OPs, is fully informed of their characteristic effects, the necessary precautions and remedial treatments? I hope that the Minister can assure us that it is his Department.
  Sixthly, what steps are being taken to evaluate the risks to children who have been treated with organophosphate head lice preparations, including malathion, the chemical that was used as pesticide in the Gulf war? The Pesticide Trust has issued serious warnings in recent months about these products, describing malathion as
  "a cholinesterase inhibitor which has been found to disrupt the immune system."
  It states that children are especially susceptible to absorption through the skin, and that some individuals are more sensitive than others. What are Ministers doing to warn parents about those different options and the difference between an organophosphate treatment and other treatments that may be safer?
  Seventhly, some organophosphate compounds, even the very dangerous diazanon, are now used extensively to control fleas and other parasites on cats and dogs. I understand that vets are concerned that warnings are

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  inadequate and labels insufficient, and that protective clothing and the dangers of inhalation are not specified. While the amounts used may be small, continuous use and the cumulative effect on especially sensitive pet owners, let alone on the pets, could be devastating. Why are Ministers apparently so relaxed about their use?
  Finally, the European Union Commissioner for Agriculture has just acknowledged in response to representations by my Liberal Democrat colleague, the Member of the European Parliament for Somerset and Devon North, that there may be a connection between the impact of OPs on the central nervous system of cattle, their immune and enzyme systems, and therefore their susceptibility to bovine spongiform encephalopathy, because organophosphate warble fly treatment was used extensively in the 1980s. It is a remarkable coincidence that countries, especially the United Kingdom, which used organophosphates for that purpose during that period have had major BSE epidemics, while other countries have escaped. Will Ministers swallow their pride and re-examine that possibility in co-operation with the European Commission?
  Dr. Tim Marrs, who is the principal adviser to the Department of Health on organophosphates, has met the members of my group a number of times. He has behind him all the expertise of Porton Down, and is reported to have made a remarkable admission to the joint meeting of the British Medical Association and the National Farmers Union on this subject at the beginning of October. Dr. Mans said that he now accepted that nerve damage was known to occur from low or medium-level repeated exposure to organophosphates, corresponding to those occurring during sheep dipping. That explicit statement seems to underline previous informal remarks by Dr. Marrs to farmers. Is that the advice that he is now giving to Ministers? If it is, why have we not been told, and will the Minister repeat that advice?
  The new warning suggests that all the previous precautions and protective clothing were inadequate, and that concentration on large doses and acute symptoms is not enough. It also suggests that longer-term chronic illnesses may be the worst results of organophosphates. The House will wish to hear that the Government are prepared to adopt the precautionary principle. If we have to wait until the continuing research, some of which will not be available until 1999, proves conclusively that organophosphates are unsafe, we shall have to wait for a long time, and many victims will suffer unnecessarily. Instead, surely we should insist that these chemicals be withdrawn until it can be conclusively proved that they are safe.
  10.38 pm
  Mr. David Nicholson: I congratulate the hon. Member for North Cornwall (Mr. Tyler) on securing this most important debate, and I am grateful to him for giving me a few minutes in which to speak.
  Like the hon. Gentleman, I became aware of the problem about six or seven years ago, when farmers in my constituency and in the neighbouring constituency of North Devon communicated to me and to the local media the severe effects which they believed, and certainly the south-west group of the NFU believed, were linked to the use of organophosphate dips.
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  It is fair to say that thousands of farmers throughout the United Kingdom have used organophosphate dips to treat their sheep without suffering adverse consequences. At the same time, whether in the south-west, Wales or elsewhere in the UK, dozens—probably more than dozens—of farmers and others have suffered severe or varying consequences through their use, they and others believe, of OP dips. Some are now unable to work. Others—they include personal friends in my constituency—are able to work capably and effectively most of the time, but if they get a whiff or a scent, that affects them, so there is a consequential effect after the initial OP dip infection.
  Some years ago, an all-party group of hon. Members, who are present and who, I am happy to accept, were headed by the hon. Member for North Cornwall, came together; we had a succession of meetings with successive Ministers with responsibility for agriculture, most recently with my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food. Those have been most useful in exploring these matters.
  As the hon. Member for North Cornwall said, we have recently had tragic evidence of the consequences of the use of certain treatments during the Gulf war, which have produced what is known and now recognised as a medical condition: Gulf war syndrome. That is tragic, and it increases the evidence that there is a problem with these substances.
  I emphasise to my hon. Friend the Under-Secretary of State for Health and to the House that the Department of Health has an important function, not only in dealing with the points that the hon. Member for North Cornwall has raised and in communicating to other sections of the Government machine the long-held view of the National Farmers Union in the south-west that OP dips should be banned, but in communicating to general practitioners that they should be aware of and recognise the symptoms of this disease. All too often—this happens with other diseases—GPs will say only, "You're just suffering from exhaustion, a bad day or depression," and dismiss it. I have taken farmers from my constituency to raise that matter with my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food.
  I hear what the hon. Member for North Cornwall says about the recent role of his colleague the Liberal Member of the European Parliament for Somerset and Devon North in promoting with European institutions the claims of Somerset farmer Mr. Mark Purdey and others that there is a link between OP dips and bovine spongiform encephalopathy. I should be happy to hear a conclusive response from the Government on that, but, in the past six months, BSE and the various scientific speculations on it have caused so much havoc with the farming and rural communities in Britain that I caution the hon. Member for North Cornwall and his colleagues against stirring this up and widening the issue by linking the great OP dip problem with the BSE problem. That will not help our handling of the BSE issue.
  10.43 pm
  The Parliamentary Under-Secretary of State for Health(Mr. Simon Burns): I congratulate the hon. Member for North Cornwall (Mr. Tyler) on having secured this important debate. As he said, he has raised some important issues, and, if I do not have time now, I

  763
  will ensure that he is written to as soon as possible with full answers to the questions that I am unable to deal with tonight.
  I reassure hon. Members that the Government are determined to ensure, so far as is possible, that no pesticide or veterinary medicine should be approved or licensed for use if such use could be a risk to people's health. That applies both to farmers using pesticides and to people who eat the food that farmers produce.
  As the hon. Member for North Cornwall will no doubt also know, the Government take great care to ensure that a pesticide is safe before it is approved for use in the United Kingdom. All pesticides are thoroughly analysed and investigated, and approvals for use are granted only when—on an assessment of all available data by the Advisory Committee on Pesticides, or, if appropriate, by the Veterinary Products Committee—they are considered to be safe. Furthermore, UK regulatory authorities can review the substances at any time.
  Ministers in five Departments must approve pesticides before they can be marketed. That includes, under separate regulations, the Department of Health, the Department of the Environment, the Ministry of Agriculture, Fisheries and Food, the Scottish Office, the Welsh Office and the Northern Ireland Office. For veterinary drugs, the licensing authority is Health and Agriculture Ministers. Clearly, therefore, MAFF is only one of several Departments regulating the substances—an arrangement that is designed to ensure that human health and environmental considerations all play a full role in the process.
  The Government and the Veterinary Products Committee are constrained, by section 118 of the Medicines Act 1968, not to divulge information that is commercially sensitive. However, as the hon. Member for North Cornwall will know, the workings of the Veterinary Medicines Directorate and the VPC are fully transparent. In addition to its annual report, the VMD publishes a quarterly bulletin of its work, and a press release is issued after every meeting of the VPC.
  The Government also make available detailed explanations of licensing and of the suspected adverse reactions scheme, and Ministers announce the findings of the VPC on certain topics—particularly reviews of the use of OP sheep dips. Furthermore, the working party on pesticide residues and that on veterinary residues oversee the sampling of foods for pesticide and veterinary residues. Each year, the results are published and submitted to the European Commission.
  As the hon. Member for North Cornwall is aware, although others may not be, organophosphates are insecticides used on arable crops. They are also used on farm animals, such as sheep, to kill insects in the fleece—in which case they are usually used as sheep dips. They are also used on pets to kill various insects, such as fleas.
  Although there have been a few instances of adverse reactions to OPs used in other situations, most of the concerns have centred on sheep dips. As the hon. Member for North Cornwall will be aware, that is a serious problem. Because of the thickness of their fleeces, sheep suffer badly from the attention of parasites, which include sheep scab mite and flies that cause flystrike. Those infestations are major humane and economic problems. They are potentially fatal, and they cannot be left untreated. The issue of control is therefore extremely important.
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  Until 1984, the most widely used dips were those containing the chemical lindane, although sheep dips using OPs were also available. In that year, lindane dips were withdrawn on grounds of safety, and OPs replaced them in the market. At present, most sheep dips contain OPs.
  As the hon. Gentleman will also know, it was compulsory to dip sheep until a few years ago, although that is no longer the case. I am aware that—during an interview with the hon. Member for North Cornwall about OPs, which was broadcast this morning on the Radio 4 programme "Farming Today"—one of my officials was quoted as saying at a recent meeting with the British Medical Association that
  "he now accepts that nerve damage can occur from a medium or low level of exposure to sheep dip."
  That is entirely untrue. I repeat: that is entirely untrue. It is unfortunate that neither the programme presenter nor the hon. Gentleman was able to check the accuracy of their information beforehand.
  Mr. Andrew Mackinlay rose—
  Mr. Burns: I have a copy of the minutes of the meeting in question, and it clearly records that my official said:
  "Changes in peripheral and/or central nervous system function had been shown in some studies, while others had not shown such effects."
  Mr. Tyler: Will the Minister give way?
  Mr. Burns: I am sorry; I do not have time.
  That statement is clearly quite different from the impression given during the radio interview. I should be happy to let the hon. Member for North Cornwall see the extract from those minutes.
  Mr. Michael Meacher: Will the Minister give way?
  Mr. Burns: Very briefly, because I have only another four minutes.
  Mr. Meacher: I think that it is rather more than that.
  Whatever the truth may be about what was said by the Minister's official, will the Government now undertake an investigation into the 500 farmers who are known to be ill with organophosphate poisoning, which they have hitherto refused to do? Will the Minister accept, in view of his earlier remarks, that the licensing system is over-dependent on manufacturers' toxicity data?
  Will the Minister take steps to ensure that the evidence on which the licensing decisions are made is made available to the general public? Will he, in the light of the very effective evidence produced by the hon. Member for North Cornwall (Mr. Tyler), now impose a moratorium on the use of organophosphate dips, while instituting a programme to assist farmers with alternative methods of protecting against sheep scab?
  Mr. Burns: I am grateful to the hon. Gentleman. I would appreciate it if he would let me develop my theme, especially on the last point he raised. As I have said, if I run out of time in what is a short debate, I shall write to

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  the hon. Member for North Cornwall and deal with all the issues that have been raised in the debate which I have not covered.
  I now turn to the issue of what action the Government are taking. The Government are very concerned about the link which some people have claimed between their ill health and the use of organophosphorus insecticides and sheep dips. In common with many other chemicals in daily use, OPs, if misused, can give rise to adverse effects. Without doubt, some of those effects can be very serious.
  However, what is not clear is whether, when used in the approved way, these OPs can cause chronic adverse health effects in the long term to the people who are using them. Much of the evidence for long-term effects has been criticised for being anecdotal and because exposure data have been poor. Also, it is exceedingly difficult to establish cause and effect from individual cases which can be caused by other medical conditions, making diagnosis extremely difficult.
  The Government have two very clear objectives. One is to establish scientifically whether a link exists between ill health and chronic exposure to OPs. The other is to ensure that people suffering ill health which they feel may be due to such exposure get the best medical advice and care possible, and that medical practitioners have a better understanding of the symptoms which may be associated with chronic exposure to organophosphate sheep dips.
  To those ends, we are doing a great deal. First, we are funding a number of research projects, including studies on the occupational hygiene of sheep dipping and on alternative methods of control of sheep scab. One project is being carried out at a number of research institutes, with the aim of producing a vaccine. The other is aimed at obtaining a better understanding of the factors that influence the spread of sheep scab. The projects, which commenced in January 1996, will run for three years from that date.
  Most recently, and on the recommendation of the medical and scientific panel, studies costing approximately half a million pounds are being undertaken at the Institute of Occupational Medicine in Edinburgh. This study, which commenced in November 1995, will take about three years to complete and is designed to investigate the effects of organophosphate sheep dips on sheep farmers and sheep farm workers.
  The Government have also taken a number of measures to ensure that the problem is brought to the attention of the medical profession. Thus, the chief medical officer wrote to all doctors in England in 1991 and again, with the chief executive of the Veterinary Medicines Directorate, in June 1993, to alert doctors to the possibility of adverse effects from exposure to pesticides and certain veterinary medicines, and to remind them of the reporting schemes for human adverse reactions to veterinary products operated by the Employment Medical Advisory Service and MAFF's Veterinary Medicines Directorate.
  The Government also issued in April this year a revised and expanded edition of the book "Pesticide Poisoning: Notes for the Guidance of Medical Practitioners". This includes guidance on the diagnosis and management of acute OP poisoning and on chronic health effects. The
  766
  book also includes details of reporting procedures when OP poisoning is suspected.
  In the past few days, following discussions between Baroness Cumberlege and the presidents of the Royal College of Physicians and the Royal College of Psychiatrists, the chief medical officer has written to the presidents of both colleges giving the Department of Health's support to the setting up of a new advisory group to draw up guidance on how to manage patients who may be suffering from adverse effects from exposure to OP sheep dips.
  We have also been concerned to ensure that those using OP sheep dips follow the correct procedures, and to alert them to the adverse effects if they are misused. We therefore published a leaflet for farmers on the safe use of OP sheep dips. That discussed the need for sheep dipping, safe handling of sheep dips, the use of protective clothing, and possible adverse effects of OP sheep dips.
  OP compounds have been reviewed several times by the independent expert committees which advise Ministers on pesticides and veterinary products. In 1993, the Veterinary Products Committee reviewed the OP sheep dips, and found that there was no evidence to support a ban or suspension on their use when used properly.
  Following its review in 1993, the VPC recommended that the licences should continue, and that a certificate of competence should be required for the purchase of OP dips. A scheme under which a certificate of competence is required before OP sheep dips can be purchased became operative in 1995. Furthermore, the VPC set up an expert panel, the medical and scientific committee, in 1994, to examine the effects of OPs and to recommend research that might be carried out.
  To sum up, Britain has an excellent system for approving pesticides and for licensing veterinary medicines. Under both systems, the Government are advised by independent statutory committees of acknowledged experts. We listen to those expert committees and, if they tell us that a product is likely to harm people, we do not let it get on the market.
  Believe me, if any grounds emerge to think that the use of OP pesticides, or any other pesticide or veterinary drug, poses a serious threat to the health of the public or to those who will use it, we will have no hesitation in withdrawing it. But before contemplating such a step, we must assemble all the evidence and make an assessment based on the facts.
  Malathion is the only OP authorised for the treatment of head lice. There is no evidence to suggest that malathion is dangerous when used for that purpose. Like all marketed medicines, products containing malathion are continuously monitored for safety. That is important, and that is what is happening.
  The hon. Member for North Cornwall raised a number of issues with which I have not been able to deal, but I assure him once again that, as he requested at the beginning of the debate, I shall write to him as soon as possible giving him full answers on those matters with which time has not allowed me to deal today.
  Question put and agreed to.
  Adjourned accordingly at four minutes to Eleven o'clock.