Commons Sitting of 4 February 1997

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

  KING'S COLLEGE LONDON BILL [Lords] (By Order)
  Order for Third Reading read.
  To be read the Third time on Tuesday 11 February.

  LEVER PARK BILL (By Order)
  Order for Second Reading read.
  To be read a Second time on Tuesday 11 February.

Oral Answers to Questions
  ENVIRONMENT

    House Building Industry
    Mr. Nicholas Winterton: To ask the Secretary of State for the Environment if he will make a statement on the level of activity in the housebuilding industry [12500]
    The Secretary of State for the Environment (Mr. John Gummer): The housebuilding industry is benefiting from strong recovery in the wider housing market. Private housing starts in the three months to December 1996 were up 33 per cent. on the same period a year ago.
    Mr. Winterton: Given that planning delays have been a major factor in the inactivity of the housebuilding sector, will my right hon. Friend proceed as rapidly as possible to implement the proposals that he recently announced to remove inefficiency and, in some cases, deliberate delays in the planning process? Does he accept that action must be taken if we are to achieve the strategic demand of 4.4 million houses over the next 20 years?
    Mr. Gummer: I very much welcome my hon. Friend's support for our proposals, and certainly I shall seek to implement them as fast as possible. He will know that now is a particularly favourable moment in his own constituency, as information from Macclesfield shows that private starts were up 63 per cent. in the past quarter, year on year. I very much hope to be able to expedite the proposals in the sense that he requires.
    Mr. Mackinlay: While the upturn in housebuilding is good news, it also reflects the previous deep depression, in which—during the stewardship of this Tory Government—the housebuilding industry looked like
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    Armageddon, with bankruptcies and people being put out of work, simply because there was no demand for houses. There was no demand because people lacked confidence, as they were unemployed and unable to purchase new homes. Is it not time that the Government realised that they have presided over a massive failure of the house building industry, which has meant the impoverishment and homelessness of countless families?
    Mr. Gummer: That is rich coming from the party that voted against the right to buy; the party that has done everything possible to stop people buying their own houses; and the party that has new tax proposals up its sleeve—should it come into power—which would hit every home owner in the country. The hon. Gentleman is unbelievable, as usual.
    Mr. John Marshall: Does my right hon. Friend agree that one of the most important influences on the level of house building is the level of interest rates? Has he contemplated what would happen to interest rate levels and to the house building industry if we were ever to have a Government who were determined to spend an extra £30 billion?
    Mr. Gummer: Low interest rates and low inflation are the result of the Government's extremely good financial stewardship. The Labour party is committed to signing the European social chapter, which would increase unemployment. It is also committed to supporting a series of measures that would increase interest rates and put Britain back in the position that it was under the previous Labour Government—as the laughing stock of Europe, instead of as the leader of Europe.
    Mr. Sutcliffe: How will housing needs be met? Housing association grants have been cut, and, because of political dogma, the Government will not allow councils to build houses. So how will the Government achieve the 4.4-million target in new houses by the turn of the century? Who will build those houses when the Government will not give local authorities the opportunity to do so?
    Mr. Gummer: Of course, the only reason that all would need to be social housing is if there were a Labour Government pushing down people's ability to buy their own houses. So the hon. Gentleman will have to explain why his party has now announced that—in the next two years, which is what we have been discussing—it would not provide any more money for social housing. He had better ask those questions of the right hon. Member for Dunfermline, East (Mr. Brown), who has clearly shot him out of the water.

    Stockton City Challenge
    Mr. Devlin: To ask the Secretary of State for the Environment, pursuant to his answer of 20 January, Official Report, column 437, if he will announce his decision on the future of Stockton city challenge high street redevelopment scheme. [12501]
    The Minister for Construction, Planning and Energy Efficiency (Mr. Robert B. Jones): The orders and applications for this scheme are now before my right

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    hon. Friend the Secretary of State for the Environment, and my right hon. Friend the Secretary of State for Transport, for decision. They have raised some complex issues, but good progress is being made and the decisions will be issued as soon as it is practicable to do so.
    Mr. Devlin: Given that it is a year since the public inquiry ended and that the whole of the town centre scheme in Stockton has been left in limbo because his officials have been sitting on it for so long, will my hon. Friend now deal with the matter as an urgent priority and disregard the representations that are obviously being received from Chesterfield Properties, which has a vested interest in wrecking the scheme?
    Mr. Jones: I fully recognise that my hon. Friend has been leading a vigorous campaign to get the scheme approved; he has certainly left neither my right hon. Friend the Secretary of State for the Environment nor my hon. Friend the Secretary of State for Transport in any doubt as to the importance of the scheme to Stockton. As he said, however, there is a legal challenge to the scheme, and it would be extremely unwise to make a decision that could not stand up in law.

    House Conditions (East Lancashire)
    Mr. Gordon Prentice: To ask the Secretary of State for the Environment how many houses in east Lancashire (a) are unfit for habitation and (b) require repairs to bring them up to a habitable standard. [12502]
    The Parliamentary Under-Secretary of State for the Environment (Mr. James Clappison): At the most recent estimate, there were approximately 48,800 houses statutorily unfit in east Lancashire.
    Mr. Prentice: Does the Minister appreciate that 67 per cent. of properties in Pendle were built before 1919, which is the highest percentage of any local authority in England outside inner London? Does he further appreciate that 25,000 properties there are in need of repair and that 5,400 are unfit? Ministers presumably want people to live in warm and comfortable homes, so why have Conservative policies been such a failure in north-east Lancashire?
    Mr. Clappison: The hon. Gentleman is right inasmuch as east Lancashire has one of the highest proportions of older properties in the country, which is a particular problem. According to the most recent analysis of the English house condition survey, the number of unfit properties in the country as a whole has fallen by about 10 per cent. The hon. Gentleman's local authority will no doubt want to deal with its particular problems by taking advantage of the Housing Grants, Construction and Regeneration Act 1996 strategically to use the renovation grants that the Government provide to—[Interruption.]
    I am hearing sedentary comments from the hon. Member for Greenwich (Mr. Raynsford). The implication of what he is saying and the implication of the hon. Gentleman's question is that they are pleading for additional public expenditure and the hon. Member for Oldham, West (Mr. Meacher), who is sitting next to the hon. Member for Greenwich, has his own ideas about
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    increases in taxation which could bring that about. The fact must be faced—this is a clear plea for extra public expenditure.
    Dame Elaine Kellett-Bowman: Is my hon. Friend aware that the number of single pensioners—they are the most vulnerable people—who live in unfit dwellings fell by 10 per cent. between 1986 and 1991? Is not that an important improvement in the conditions of our elderly population?
    Mr. Clappison: My hon. Friend makes an excellent point. It is indeed good news that pensioners' housing conditions have improved. Pensioners will no doubt want to take advantage of the more generous home repairs assistance under the Housing Grants, Construction and Regeneration Act 1996.

    Homelessness
    Mr. Touhig: To ask the Secretary of State for the Environment how many households were accepted as homeless by local authorities in England in 1996; and what was the equivalent figure for 1979. [12503]
    The Minister for Local Government, Housing and Urban Regeneration (Mr. David Curry): Households that have been found accommodation by local authorities after being accepted as statutorily homeless numbered 55,530 in 1979 and 120,810 in 1995. Detailed changes—uncontroversial changes—to the reporting system were made in 1980 and 1982.
    Mr. Touhig: However much the Minister tries to fudge the figures, he cannot escape the harsh fact that homelessness has more than doubled under this Government. Will he therefore accept that the fact that his party has failed to deal with this problem, which affects the most vulnerable in society, is the strongest argument for a change of Government?
    Mr. Curry: It is curious to be accused of fudging the figures when I have just given two extremely precise figures. The hon. Gentleman ought to listen and use a little common sense. Homelessness is falling and there are measures in place to deal with it. He should also be cautious in assuming that homelessness and other social ills which result from, for example, the falling apart of families, the break-up of partnerships and many social trends of which he or I might or might not approve, can all be remedied by the Government. It takes only a little common sense to realise that the Government can do some things, but that sometimes we have to react just like everyone else—our reaction is comprehensive, effective and working.
    Mr. David Nicholson: My right hon. Friend will be aware that there is a widespread welcome for the success of the rough sleepers initiative and its extension outside London to other centres. However, the success of the initiative is limited when it has to deal with homeless people who suffer from drug or alcohol dependency or mental illness. Will my right hon. Friend assure the House that his Department is working with other Departments, including the Home Office and the Department of Social Security, to ensure that the

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    problems of homelessness and public begging are tackled by co-ordinated policies that get to the root of the matter?
    Mr. Curry: I agree with my hon. Friend that, when we come to deal with the hard core of rough sleepers—it is a hard core; we have reduced the numbers significantly—we come across problems of mental health and of drink and drugs. Those are not problems to which the Opposition's simplistic answer, "Put a roof over his or her head," applies. A great deal of care is needed. A home is often the last thing that people in such circumstances need, because an enormous amount of work needs to be done before they have the competence even to contemplate looking after themselves. We need a co-ordinated approach to the problems. The rough sleepers initiative, now in its seventh year, adopts such an approach. It is a remarkable example of co-operation between the Government and the voluntary sector.

    Air Pollution
    Mr. Soley: To ask the Secretary of State for the Environment what recent representations he has received regarding air pollution. [12504]
    Mr. Gummer: My Department has received 420 representations from members of the public, business, local authorities and other bodies, in response to consultation on the draft national strategy for air quality, which the Government are preparing in accordance with the Environment Act 1995.
    Mr. Soley: Bearing in mind the fact that one in seven children suffer from asthma, which is thought to be aggravated—and even occasionally caused—by air pollution, and given that nobody believes that the Government have coherent policies on transport or air pollution, what hope does the Secretary of State offer to those children and their parents?
    Mr. Gummer: I am surprised by the hon. Gentleman's final comments. We have a national air quality strategy and have arranged a common strategy with the rest of the European Union. We are seen as the leader in Europe on this. I have committed myself to getting rid of summer and winter smog within 10 years, and shall spend much of my time working on that. Our policies are the best in Europe. We are continuing along those lines with an integrated transport strategy, which the hon. Gentleman knows about. On environmental issues, the Labour party knows so little and cares so little that it cannot even produce a coherent question.
    Mr. Evennett: I welcome what my right hon. Friend has done to improve air quality and to monitor the effects of pollution. Is he aware that, in my part of south-east London, there are still considerable air pollution problems? Will he continue to look into those problems and examine the results of the monitoring that is taking place in Bexley?
    Mr. Gummer: Certainly. As my hon. Friend knows, we are working closely with local authorities. I am happy to consider the specific problems of the London borough of Bexley. Air quality is improving. We have high
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    standards to attain, which we are determined to reach. We are recognised by the rest of the world as being well ahead of most other countries.
    Mr. Meacher: How can the Secretary of State pretend that he is being serious about his so-called air quality strategy when it fails to set any standards for before 2005, when even then it fails to set any statutory standards for PM10s—by far the most dangerous particles—when it allows monitoring away from the areas of greatest traffic density and when he has provided no powers or money to local authorities to implement it? For all those who have suffered from the doubling in recent years of air pollution-caused asthma, is not the strategy just another pathetic Tory pre-election scam?
    Mr. Gummer: I know that the hon. Gentleman is coming from a long distance back, as the Opposition have done nothing about the environment. It seems that even less will be done now, as the hon. Gentleman has not even read his brief properly. He does not appear to know that we have provided local authorities with money and powers and that we are working with them to carry out our national air strategy. Nor does he seem to understand that we hosted a conference of northern European nations to work out a common air quality strategy that we now lead. No doubt the hon. Gentleman will suggest that we should spend more money and propose a whole series of new taxes to pay for that. The Government have achieved the necessary results. We are leading the rest of Europe—something that the hon. Gentleman could never understand or achieve.
    Mr. Tredinnick: Will my right hon. Friend discuss with my right hon. Friend the Secretary of State for Transport the key problem of vehicle exhaust emissions? Is he aware that only 40,000 vehicles were tested last year and 6 per cent. were found to be above the limit? Particularly in respect of the M1, which carries the heaviest traffic, does he agree that that is a completely inadequate number, and that the Vehicle Inspectorate needs to test many more vehicles in order to cut down the toxic fumes from which we all suffer on motorway journeys?
    Mr. Gummer: I am sure that my hon. Friend is right to say that we need to concentrate more on that. We are taking part in the negotiations on the auto-oil programme so that it will be a success throughout Europe. As my hon. Friend knows, half the pollution in Britain comes from the rest of Europe and we export half our pollution to Europe. We need a common policy, and we are determined to achieve it.

    Local Government Finance
    Mr. Pope: To ask the Secretary of State for the Environment what discussions he has had with the local authority associations on standard spending assessments. [12505]
    The Parliamentary Under-Secretary of State for the Environment (Sir Paul Beresford): We have discussions with the local authority associations on standard spending assessments several times throughout the year.
    Mr. Pope: Can the Minister confirm that, following this year's financial settlement, the Government are responsible for forcing up council tax bills by more than 6 per cent.? Will he further confirm that, if Hyndburn council received the same assistance from the Government as Westminster, it would be able to give every band D council tax payer a rebate of £572? Is it not the case that we have to pay more so that Tory Westminster can pay less?
    Sir Paul Beresford: I am disappointed that the hon. Gentleman, who I thought had some understanding of standard spending assessments, has taken a line that fell flat on its face last night. Let me put it the other way round. If the flagship Labour authority of Harlow was as efficient as Westminster, relative to its SSA, its band D council tax would be £10, saving local people some £180 this year. In other words, the local authorities should get their act together.
    Mr. Peter Atkinson: When my right hon. Friend met councillors from the north-east of England recently and they asked him for increased SSAs and greater Government grants, did they discuss the funding of the North of England Assembly of Local Authorities? Did they tell him about the increasing burden that that authority was placing on them, and did they say that it was advertising for a new director at a salary of £60,000 a year with the duty of promoting regional government in the north-east of England? Is it not a shameful waste of public money? Is not regional government deeply unpopular in the north of England, as people know that it means heavier local taxes and jobs for the boys?
    Sir Paul Beresford: My hon. Friend is absolutely right. Funnily enough, the councillors forgot to mention that. We heard much pleading—there was a little of that last night. Taxpayers and council tax payers, through the SSA, have to carry an extra burden of bureaucracy that will gum up the works even more than the regional authority manages to do now.
    Mr. Rendel: The Secretary of State has leaned heavily on what he describes as local government association support for his decisions on SSAs. When will the Government carry out official Conservative party policy to abolish capping which, unlike the right hon. Gentleman's policies, is supported by local government associations?
    Sir Paul Beresford: I find it intriguing to be told what is official Conservative party policy. The hon. Gentleman should recognise that, while he is free with other people's money, the Government are not.
    Mr. Congdon: Does my hon. Friend agree that the representations from local authorities would carry more weight if they got their house in order by managing their resources properly, and in particular embracing compulsory competitive tendering? What further action will he take to prevent local authorities from trying to deter the private sector from making bids and when they make the lowest bids, doing everything in their power to find excuses to give the contract to their own in-house direct services organisation?
    Sir Paul Beresford: My hon. Friend is right. He was a member of a local authority that went down that road to the benefit of the people of Croydon. New orders were laid at the end of last month to achieve exactly what he has mentioned.

    Downland Protection
    Mr. Waterson: To ask the Secretary of State for the Environment what steps he is taking to protect the downland (a) near Eastbourne and (b) elsewhere. [12507]
    Mr. Robert B. Jones: We fully recognise the importance of the chalk downland in Sussex and elsewhere. The Sussex downs are designated as an area of outstanding natural beauty and further protection is given to important sites through designation as national nature reserves and sites of special scientific interest. The Ministry of Agriculture, Fisheries and Food has also established the environmentally sensitive areas scheme, which protects downland landscapes, including an extensive area of the Sussex downs.
    Mr. Waterson: When my hon. Friend reviews the role of the Sussex Downs conservation board, will he seriously consider the possibility of extending its powers to give it, for example, the power to call in planning applications? Will he also look closely at the suggestion of putting the Eastbourne downland under the control of an independent charitable trust, so that it can be removed from political control and interference once and for all?
    Mr. Jones: My hon. Friend has fought a vigorous battle to protect downland in his constituency—sometimes against his Liberal-controlled local authority, which seems to want to develop on the downland. When we receive the advice due from the Countryside Commission, we shall make absolutely certain that we consider all the options, including the sensible ones that my hon. Friend has put forward.
    Mr. Sheerman: Can the Minister confirm that industrial waste is being spread on downland? Is he aware that 1 per cent. of Britain's waste is spread on the land, and that there is no efficient method of checking the quality of the waste or how dangerous it can be to the long-term prospects for agriculture? Will he consider an auditing system that works, talk to ADAS about it, and implement it quickly?
    Mr. Jones: Without the detail of the hon. Gentleman's complaint, it is obviously very difficult to comment. I am happy to look at the circumstances that he describes. Then we can no doubt consider whether any action is necessary.

    Fire Services (Essex)
    Mr. Amess: To ask the Secretary of State for the Environment if he will make a statement on the calculation of the element allowed for fire services in the standard spending assessments for Essex. [12509]
    Mr. Curry: As I announced last week, the fire element of the standard spending assessment for Essex is £35.1 million for 1997–98—an increase of 4.6 per cent. on the same element for 1996–97, and higher than the national average of 4.2 per cent.
    Mr. Amess: Is my right hon. Friend aware that there is widespread concern throughout Essex at the way in which the Labour and Liberal-controlled Essex county council is trying to reorganise local fire services? Does he regret that some local politicians are unfairly trying to blame the Government for that? Does he recognise that local residents under no circumstances want Leigh-on-Sea fire station to be closed?
    Mr. Curry: Essex county council has done very well over successive years from changes in SSAs. Indeed, it has had significant additional funds. The fact is that the county can increase its budget by £19.5 million. The fire element increase is £1.5 million. None of that is hypothecated. If it chooses to do so, it could give priority to its fire service. The decision not to do so would be entirely that of local councillors.
    Mr. Olner: While the Minister is considering the problems in Essex, will he turn his mind to the problems in Warwickshire—
    Madam Speaker: Order. Not today, thank you. Perhaps tomorrow.

    Uniform Business Rate
    Mr. Whittingdale: To ask the Secretary of State for the Environment what assessment he has made of the impact of the uniform business rate on small businesses. [12511]
    Mr. Gummer: Rates place a disproportionate burden on small businesses. For that reason, we have announced that rate bills for small business premises will not rise in 1997–98. We are looking at what other steps can be taken further to address this problem.
    Mr. Whittingdale: Does my right hon. Friend accept that the burden of business rates bears particularly heavily not only on small businesses but on high-street retailers, who are trying to compete with out-of-town superstores? Is he aware that the Government's announcement that they are intending to redistribute the burden is particularly welcome to small shops such as those in Maldon high street? Will he assure us that he will introduce such measures as soon as possible after the general election?
    Mr. Gummer: I can certainly give the assurance that, if we can find a more satisfactory and equitable way of doing these things, we shall do so as rapidly as possible. I am sure that my hon. Friend would like to extend what he said to the fact that village shops can now get the special mandatory relief—mandatory relief that Liberal Members voted against. They did not want local shops to get that relief as of right, but wanted to leave it in the hands of Liberal councils, which very often do not provide that relief.
    Mr. Pike: Does the Secretary of State accept that we all recognise the importance of small business, but that, when he says that about the part of the poll tax legislation which refers to non-domestic rates, it really shows how that flagship legislation was flawed in both sections—in respect of non-domestic rates and of the poll tax—and shows what a disaster the Government have been since 1987?
    Mr. Gummer: I must point out that the hon. Gentleman represents a party that used to set enormously high business rates and drove businesses out of its areas. For example, he will remember that, before we changed the rules, shopkeepers in Newcastle upon Tyne paid three times as much per square foot as people in Westminster, in Oxford street. That is what it meant to have a Labour council and Labour rates in those days—thank goodness we put that right.
    Mr. Dover: Does the Minister accept that, in fact, probably the large majority of small businesses pay no uniform business rates, because they operate from residential homes? Is it not time that the Government considered scrapping all business rating for small businesses, in view of the arbitrary lines that separate those who pay and those who do not?
    Mr. Gummer: My hon. Friend must accept that, wherever one draws those lines, one has such difficulties. I have suggested that we need to get the proportional weight of the business rate correct, which is why we are looking carefully, particularly at small businesses, to ensure that we can do what is best.

    Social Housing
    Mr. Gunnell: To ask the Secretary of State for the Environment what estimate he has made of the number of new lettings for social needs which will be available in (i) 1997–98, (ii) 1998–99 and (iii) 1999–2000. [12512]
    Mr. Clappison: We estimate 148,000.
    Mr. Gunnell: That is a rather higher figure than I had anticipated, but why is it that, when there is such a huge level of unmet social need, the Government have allowed social needs housing starts to fall to the lowest level since the second world war? I opened some of those units completed in Leeds only a week ago. Will the Minister ensure that creative partnerships, like that between Leeds city council and its five housing associations, can continue? Will he ensure that more money is made available for social housing, because we have the lowest number of social starts and it is time that the Government paid attention to it?
    Mr. Clappison: I can tell the hon. Gentleman that we have our estimates of housing need, and that we are on target to create between 58,000 and 60,000 new lettings over the decade as a whole, which is in line with our estimate of need. We are doing so in a variety of ways and, as the hon. Gentleman acknowledged by his use of the example of Leeds, we are drawing in a great deal of private finance—we estimate £1.7 billion over the next three years The hon. Gentleman asks for more money to meet needs over and beyond those that we have defined,

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    so I regard his question as yet another plea for more public expenditure, which is in contradiction of Labour Front Benchers' apparently pre-ordained desire to stay within pre-ordained spending limits and breaches their spending commitments—once again, more public spending.
    Mr. Dobson: The Minister's answer, in effect, only promises more of the same, which we all know is inadequate. Why will not the Government agree to the release of the takings from the right-to-buy sale of council houses, so that they can be invested in building new houses and improving old ones? That would create jobs in the building industry and provide new homes; and it would create new jobs in the building supply industry, whether they be for people making carpets in Halifax and Brighouse, people making electrical fittings in Basildon, or people making doors and windows in Keighley?
    Mr. Clappison: The hon. Gentleman's policy will not work because, as he well knows, many of the areas with the greatest housing need, such as Birmingham, Newcastle, Hackney and Southwark, have no housing receipts to spend, whereas areas with less housing need, such as West Dorset and Malvern Hills, have the receipts. He has never explained how he will transfer the receipts from one to another.
    The next problem that the hon. Gentleman faces is the fact that every pound spent from the capital receipts represents additional public spending.
    Mr. Dobson indicated dissent.
    Mr. Clappison: No amount of fudging can disguise that fact; the hon. Gentleman's proposal amounts to more public spending, which would have to be paid for, as the hon. Gentleman's Front-Bench colleague, the hon. Member for Oldham, West (Mr. Meacher), wants, through more taxation—taxation of allowances, and more and more taxation.

    Local Government Finance (Kent)
    Mr. Jacques Arnold: To ask the Secretary of State for the Environment if he will make a statement on the 1997–98 financial settlement for Kent county council. [12513]
    Sir Paul Beresford: Kent's overall standard spending assessment increased by 2.2 per cent.—just short of £22 million. Within that, the element relating to education increased by 3.5 per cent., and that relating to fire by 5 per cent. I think that my hon. Friend will agree that that is a very fair settlement.
    Mr. Arnold: My hon. Friend will know that the people of Kent were delighted to receive an extra £22 million for this year—an increase that takes the spending of Kent county council beyond £1 billion. Does he share the dismay of people throughout Kent at the fact that the Labour-Liberal Democrat coalition proposes to cut massive sums from the budgets of our schools, our fire
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    service and our social services, and to decimate adult education, the youth service and many other services in Kent?
    Sir Paul Beresford: I should have thought that my hon. Friend would be used to that by now. It is what we call the bleeding stump syndrome—chop off something vital and wave it around to frighten the public.
    Mr. Allen: Will the Minister point out to the outgoing hon. Member for Gravesham (Mr. Arnold), as well as to the hon. Members for Dartford (Mr. Dunn) and for Dover (Mr. Shaw), that all Kent's Tories trooped through the Lobby last night to impose the local government settlement on Kent? It is that settlement, not Kent county council, that will force council tax payers in Gravesham to find another 20 per cent. of the cost of their local services, and voters in Dartford to find another 30 per cent., while the Tories' cronies in Westminster pay only 10 per cent. Will the Minister urge Kent's Tory Members, in their few remaining weeks in this place, to do what Chris Pond will do in Gravesham, Howard Stoate will do in Dartford and Gwyn Prosser will do in Dover, and speak up for Kent in this place, instead of constantly denigrating it?
    Sir Paul Beresford: That is a double-handed blow. On the one hand we have the bleeding stump, and on the other hand, the hon. Member is counting chickens long before they are hatched.
    Sir Roger Moate: Does not the fact remain that Kent has received an extra £22 million, that Labour shadow Ministers are saying that there is no more money available anyway, and that it is Liberal and Labour councillors who are shutting our fire stations, cutting our library services and closing our youth services? The sooner we get them out on 1 May, the sooner we shall be able to ensure that those closures and cuts do not happen.
    Sir Paul Beresford: My hon. Friend is absolutely right. If he had been in our shoes at the Department, he would have seen Labour authority after Labour authority coming to complain, wanting more central Government funding, more local funding and council tax, the transfer of the business rate into their hands, and the removal of the compulsory aspect of compulsory competitive tendering. This is not a new tax; it is the same council tax but many times greater.

    Metropolitan Green Belt
    Sir Sydney Chapman: To ask the Secretary of State for the Environment if he will make a statement on his policy to protect the metropolitan green belt. [12515]
    Mr. Robert B. Jones: I have consistently made clear my commitment to green belts, including the metropolitan green belt. The revised version of planning policy guidance note 2 on green belts, published in 1995, reaffirms the strict control over development in green belts and maintains the presumption against inappropriate development.
    Sir Sydney Chapman: I thank my hon. Friend for that statement. Does he agree that the creation of green belts, especially the metropolitan green belts, has been one of the outstanding successes of our town and country planning system? Will he confirm that the pressure to develop in such places is at its greatest near the inner boundaries of the green belts and take this opportunity to iterate that none of the estimated 4.4 million more dwellings needed in the next 20 years are planned to be sited on green belt land?
    Mr. Jones: I pay tribute to my hon. Friend, who, as a former president of the London Green Belt Council, provided able leadership for the movement to protect the green belt in the capital—as does the current president, my hon. Friend the Member for Uxbridge (Sir M. Shersby). He is right about the pressures on the green belt, which we will resist, but if he wants to know who is on the side of the green belt and who is not, he need only look across his county boundary into Hertfordshire, where the Conservatives proposed that no new housing should be built in the green belt, but were voted down by Labour and Liberal councillors who wanted housing concentrated there.
    Mr. Hardy: I accept the Minister's reply to the hon. Member for Chipping Barnet (Sir S. Chapman), but will he make it clear that the Government will not be inclined to approve applications for opencast mining and mineral extraction in the green belt, especially where there is bitter opposition by local communities?
    Mr. Jones: The hon. Gentleman knows that every application must be looked at on its merits, but—as I have just said—the strong presumption against inappropriate development in the green belt has led us to turn down many applications in the past.

    Local Authority Housing (Transfers)
    Dr. Spink: To ask the Secretary of State for the Environment how many local authorities have transferred their housing stock to new landlords. [12516]
    Mr. Curry: Fifty-three local authorities have transferred more than 230,000 homes, generating more than £3.7 billion of private investment. I announced at the end of last month the 1997 programme, in which a further 17 authorities will transfer all or part of their housing. The programme includes some 55,000 homes and will generate another £350 million in capital receipts.
    Dr. Spink: Has it not been proved beyond question that tenants in deprived and rundown local authority housing estates are far better served in every way by non-profit-making landlords? Will my hon. Friend denounce my local council housing committee, which will not speak to my local housing tenants' association?
    Mr. Curry: We have sufficient evidence on transfers to know that tenants like them and that they work in their interests. In addition, tenants have to vote for them. Local authorities should be more interested in service and less in ownership. The case for local authority home ownership is long past, and we must look towards a more sensible arrangement.
    Mr. Raynsford: Does the Minister accept that, while there may be a case in certain circumstances for transfers
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    of stock to increase investment, they will not create any new homes? Will he admit to the House—as his hon. Friend the Under-Secretary did in an earlier answer—that the Government have abandoned the target that he gave to the Select Committee only a year ago of 60,000 new lettings? The Government cannot achieve that figure, they have broken yet another promise and they have sold out and betrayed the homeless and the badly housed in this country.
    Mr. Curry: That is a piece of nonsense. The hon. Gentleman should accept that there is an extremely good case for transfers—his own local authority is one of our transfer authorities, and is trying to transfer houses on the Charlton triangle in Greenwich. Instead of being mealy-mouthed about this, he should recognise that, unless he is willing to pour large public sums into housing—his hon. Friend the Member for Oldham, West (Mr. Meacher) may be, the shadow Chancellor says that he will not and he himself says that he would like to, but does not know how—he should concentrate on doing what is possible, which is improving the conditions of those who live in council houses, and liberating them from local authority control.

    Local Government Finance
    Mr. Michael Brown: To ask the Secretary of State for the Environment when he expects to announce the conclusions of the standard spending assessment consultations with local authorities. [12517]
    Sir Paul Beresford: On 27 January last.
    Mr. Brown: May I take this opportunity to thank my hon. Friend and his colleagues at the Department for the transitional relief provisions that they were able to make for North Lincolnshire? Will he confirm that there is no need for any local authority to make any cuts in education, providing that it spends sensibly? Will he set out the opportunities that exist for local authorities to make further savings in administration costs?
    Sir Paul Beresford: I think that my hon. Friend is well aware of them. In fact, there was a debate on his local authorities in the House on exactly that point. They accept, even though they protest and screech and scream, that they have a special advantage—as they are now authorities governing all local government services—that would allow them to make much greater efficiency savings than they appear willing to do.
    Mr. Turner: If the Minister had visited Wolverhampton and met members of my local authority, they would have told him that the Government have imposed very serious cuts—real-terms cuts—on all standard spending assessment blocks, and that we in Wolverhampton have the worst revenue grant settlement of the 36 metropolitan districts.
    Sir Paul Beresford: Perhaps the hon. Gentleman should reflect that I was leader of a local authority when its SSA was cut by 25 per cent. but that it has the best services in London.
    Mr. Turner: I am talking about Wolverhampton.
    Madam Speaker: The hon. Gentleman's question related to Wolverhampton. However, it is 3.15 pm. Prime Minister's Questions.

  PRIME MINISTER

    Engagements
    Mr. Davidson: To ask the Prime Minister if he will list his official engagements for Tuesday 4 February. [12530]
    The Prime Minister (Mr. John Major): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. Davidson: Will the Prime Minister give a clear, unequivocal commitment that he will allow the Wirral, South by-election to proceed?
    The Prime Minister: The Wirral, South by-election is proceeding.
    Mr. Rowe: To ask the Prime Minister if he will list his official engagements for Tuesday 4 February. [12531]
    The Prime Minister: I refer my hon. Friend to the reply I gave some moments ago.
    Mr. Rowe: The Lib-Lab coalition that runs Kent county council has said that it requires a grant increase of no less than 10 per cent. merely to stand still. Does the Prime Minister know of any other councils that are making a similarly absurd demand?
    The Prime Minister: I do not yet know what other absurd demands may come, but I have no doubt that the natural appetite for spending of so many Labour and Liberal-controlled local authorities will mean that there are quite a number of substantially above inflation demands for increased council tax. When the shadow Chancellor talks about Labour's plans for public spending, he clearly does not talk for the Labour local councils, which spend and spend and must then tax and tax.
    Mr. Blair: In respect of the Ofsted report, does the Prime Minister agree that the inspectors found much to praise and many competent and hard-working teachers, but that they also found severe problems in literacy, numeracy and, in particular, with a significant minority of head teachers? Given the central importance of leadership by a head in a school, does he agree that it is sensible at least to consider making the new national competence qualification a requirement for all new and aspiring head teachers, so mat, over time, this weakness can be remedied to the benefit of our children?
    The Prime Minister: I agree with a great deal of what the right hon. Gentleman said. Undoubtedly there has been an improvement in the past year—that is clear from Mr. Woodhead's report, and I am delighted to see that. It shows that the quality of teaching is satisfactory or better in the majority of schools, and I am pleased about that. I particularly congratulate those schools singled out for special praise by the chief inspector on the basis of the inspection evidence. I believe that they will provide a real example.
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    As the right hon. Gentleman said, the professional qualification for headship will be available nationally from September. It will equip aspiring heads with the skills necessary to lead and manage a school and it may, over time, be desirable to make it a requirement. I would like to see how it works in the short term, but I certainly would not rule that out.
    Mr. Gale: I am sure that my right hon. Friend shares my desire that transport safety standards across and under the channel should improve. Does he agree, however, that proposals from Brussels to make cross-channel ferries list the names and addresses of every man, woman and child travelling backwards and forwards on day trips is a bureaucratic nonsense and wholly unnecessary? Will he resist it, please?
    The Prime Minister: I agree, both about taking whatever action is necessary to assure safety and about ensuring that action is not taken that will not help on safety grounds but will simply add to costs, the price of tickets and bureaucracy.
    Mr. Janner: To ask the Prime Minister if he will list his official engagements for Tuesday 4 February. [12532]
    The Prime Minister: I refer the hon. and learned Gentleman to the answer I gave some moments ago.
    Mr. Janner: Has the Prime Minister seen the findings of the Employment Policy Institute, which show that some 4 million people in this country are seeking work? In those circumstances, will he use his speech in Brussels tonight to explain to our European partners why the Government's so-called unemployment figures are rigged, inaccurate and deliberately misleading, and that the only people in this country who deserve to be unemployed are the clapped-out, stale and fag-end Government?
    The Prime Minister: The hon. and learned Gentleman gives me the opportunity to tell the House that unemployment in his constituency has fallen by 39 per cent. In due course, perhaps, the Labour candidate will add one to the figure at the general election. In reality, unemployment in this country is 6.7 per cent. and falling, compared with more than 4 million in Germany, 3 million in France and nearly 3 million in Italy. Indeed, 18.5 million people are unemployed in the European Union, and we have created more jobs in this country in recent years than the rest of the European Union added together. I shall send the hon. and learned Gentleman a copy of the speech that I shall make this evening, so that in future he may be better informed.
    Mr. MacGregor: As rail privatisation completes its final stages, does the Prime Minister agree that it already demonstrates substantial benefits for both passengers and taxpayers? Is not its success one of the main reasons why the Labour party, which bitterly opposed rail privatisation through all its parliamentary stages, as it did with nearly every other privatisation, is all at sea over its policy?
    The Prime Minister: It is undoubtedly the case that the Labour party has not supported a single privatisation until it has proved to be a success, at which point it pays lip service to it. Under Labour, none of the privatisations

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    would have taken place. It certainly bitterly attacked rail privatisation, which has now increased investment, increased rolling stock, improved services, provided extra service and saved the taxpayer a substantial amount. [Interruption.] It is, in short, a success, and no doubt that is why the Labour party wishes to shout it down.
    Mr. MacShane: To ask the Prime Minister if he will list his official engagements for Tuesday 4 February. [12533]
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. MacShane: Is the Prime Minister aware that his Chancellor is proposing so to increase air passenger duty that a family of four will pay an extra £80 on a family holiday? How does he justify that increased tax on children and family holidays?
    The Prime Minister: It will be interesting to see which of Labour's expenditure proposals it will ditch to keep within the spending and tax plans that the shadow Chancellor has apparently endorsed. Is it not remarkable that my right hon. and learned Friend the Chancellor has had from the shadow Chancellor the most remarkable endorsement of his economic policy that any Chancellor has ever received? On every single tax and spending decision, this year and next, the shadow Chancellor agrees that my right hon. and learned Friend is infallible.
    Sir Peter Tapsell: May I put it to my right hon. Friend that there is no such thing as a stable currency, except for relatively short periods, and that any political party that sought to base its policies on such a misconception would merely demonstrate its complete ignorance of the way in which foreign exchange markets operate in practice?
    The Prime Minister: With the growth in importance of exchange markets and the growth in currency passing daily across exchange markets, my hon. Friend's point is undeniable.
    Mr. Loyden: To ask the Prime Minister if he will list his official engagements for Tuesday 4 February. [12534]
    The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.
    Mr. Loyden: On several occasions, and again today, the Prime Minister has told the House that the economic policies pursued by his Government have been responsible for inward investment and job creation in Britain. How does he square that claim with the fact that 1,300 jobs at Ford on Merseyside, as well as many others, are threatened? Is it not time that the Prime Minister woke up to the fact that jobs are being lost daily throughout the country? As far as I know—I have checked with the Library—Merseyside is still part of Britain.
    The Prime Minister: It is Conservative policy to keep every part of the United Kingdom within the United Kingdom. I hope that the hon. Gentleman will not support policies that might force an important part of the United Kingdom out of the United Kingdom.
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    Of course I am concerned about the implications of the job losses at Ford as a result of the rationalisation of its business in the United Kingdom and abroad. However, the hon. Gentleman must recognise that, despite those job losses, unemployment has fallen by 130,000 in the past two months.
    Mr. Skinner: Fiddled figures, and 4 million out of work.
    The Prime Minister: The hon. Member for Bolsover (Mr. Skinner) seeks to deny the reality of falling unemployment. He lives in his own dream world, where he may best be left. The reality is that unemployment is falling throughout the United Kingdom. The hon. Member for Liverpool, Garston (Mr. Loyden) will know that people from areas such as Merseyside, where Ford has withdrawn its jobs, have been in touch with my right hon. Friend the Minister for Industry to see what assistance may be provided.
    Mr. William Powell: Will my right hon. Friend make available three days of Government time next week to give the whole House the opportunity to discuss a Government motion congratulating the hon. Member for Oldham, West (Mr. Meacher) on his candour in admitting that the Opposition have ample scope for huge tax increases? Such a debate would also allow the House to discuss Opposition Members' widespread hopes and expectations that there will be a £30 billion increase in public expenditure, even though that is denied by Labour Front Benchers. Does my right hon. Friend believe that we should discuss the Opposition's extraordinary agreement to Government economic targets as laid down by my right hon. and learned Friend the Chancellor of the Exchequer?
    The Prime Minister: I am not sure that I can immediately offer three days for debate, but we would certainly require three days to explain the distinction between the remarks of the hon. Member for Oldham, West and those of the shadow Chancellor. It was an outburst of candour from the hon. Member for Oldham, West and also from the hon. Member for Newcastle upon Tyne, East (Mr. Brown), the Opposition Deputy Chief Whip, who presumably has some idea of Labour's tax and spending policies. I cannot promise a three-day debate, but I can promise to mention that point on every necessary occasion.
    Mr. Hain: To ask the Prime Minister if he will list his official engagements for Tuesday 4 February. [12535]
    The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.
    Mr. Hain: How does the Prime Minister reconcile his assurance to the chairman of the Japanese equivalent of the CBI that he supports a single currency and would take Britain into it, with his assurance to the hon. Member for Southend, East (Sir T. Taylor) that he opposes a single currency and would block British entry? Which of those views—personally expressed by him—is correct, or are they both "infallible"?
    The Prime Minister: No, they are both incorrect.
    Sir Ivan Lawrence: To ask the Prime Minister if he will list his official engagements for Tuesday 4 February. [12536]
    The Prime Minister: I refer my hon. and learned Friend to the answer I gave some moments ago.
    Sir Ivan Lawrence: Will my right hon. Friend congratulate a firm in my constituency, Technic Holdings, which is now the world leader in manufacturing tyre re-treads? [Laughter.] Will he note the laughter from Opposition Members about a firm that has increased its work force from four to 450 in nine years, and that uses
    800
    70 men to produce the tyres that 300 men are needed to produce in its German competitor, which it has now seen off? Its managing director and chairman have given three reasons for its success: first, the excellence of its workers; secondly, the enterprise culture created by the Government; and, thirdly, the throttling effect of Euro-legislation and German state taxes.
    The Prime Minister: My hon. and learned Friend illustrates clearly where the new jobs are coming from. No doubt the hon. Member for Bolsover would say that those fresh jobs created in my hon. and learned Friend's constituency were fiddled jobs, but they are real jobs. They are jobs that would not have been created but for the Government's policies.

Points of Order
3.31 pm
Mr. Kevin McNamara: On a point of order, Madam Speaker. In column 452 of yesterday's Hansard, in the reply to my written question, it appears that I suffered injuries that were shown in police photographs taken on 13 September; that the allegations of assault upon me were referred to the Cambridgeshire constabulary on 14 September; and that my solicitors were informed that the Crown Prosecution Service was to take no action about those allegations.
I was in Cambridgeshire on that day. I cannot remember what my alibi was, but I was not at Whitemoor prison. That is a bad example of a misprint. I do not know whether I am being paranoid, but, since the printing of Hansard has been privatised, my questions have been lost and there have been absurd failures in sub-editing and proofreading. Can something be done to protect us from the evils of privatisation?
Madam Speaker: I appreciate the point of order raised by the hon. Gentleman. He has a right to complain, and to make a second complaint in a short space of time about the printing or non-printing of Hansard.
Mr. Andrew Faulds: Further to that point of order, Madam Speaker.
Madam Speaker: I am making a ruling—do you mind?
Mr. Faulds: I am sorry, Madam Speaker.
Madam Speaker: I should think so.
Accuracy in the printing of Hansard is crucial to the work of this House. I have yet again instructed the printers to pay more careful attention to the detail of printing. A corrigendum will be printed tomorrow, but that does not resolve what has happened today. I reject and deprecate the inaccuracies in Hansard, which are all too frequent these days.
Mr. Bill Walker: On a point of order, Madam Speaker. I wish to draw your attention to a press release entitled "News from Scottish Labour." Its headline is "Public spending watchdog to inquire into Tory ad blitz on vouchers". It goes on to say:
"Shadow Secretary of State, George Robertson MP today announced that the Hon Robert Sheldon, chairman of the powerful all party House of Commons Public Accounts Committee, will be raising the Scottish Office advertising campaign on nursery vouchers with the Comptroller Auditor General, Sir John Bourne, when he meets him tomorrow.
The issue of a £800,000 advertising campaign just before a general election was raised with Mr. Sheldon by George Robertson yesterday, who questioned whether this was a proper use of public money."
The press release continues:
"Mr. Robertson said … 'Ministers may be operating within technical government rules, but the fact that they will piggyback Tory posters on taxpayer funded advertisements shows what a shabby exercise all this is.'"
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The hon. Member for Hamilton (Mr. Robertson) has received a letter from Sir Robin Butler. I shall quote parts of it—
Hon. Members: Order.
Madam Speaker: Order. If the hon. Gentleman wants me to examine written material, I think that I ought to have an opportunity to do so. He ought to send it to my office. I cannot comment on something that the hon. Gentleman is reading on the Floor of the House. What is the point of order for me?
Mr. Walker: I have no hesitation in coming to the point of order, because I believe it to be fundamental and important to the Chamber. You know, Madam Speaker, how deeply I care about the way in which things are done in the Chamber.
Is it in order for a Front Bencher to put out a press release about the possible action of the Chairman of a Select Committee in regard to matters that may or may not be discussed at a meeting with the Comptroller and Auditor General, Sir John Bourn? Is that not a hijack of the procedures of the House—as if the Public Accounts Committee were part of the Labour election machine, as per the headlines in the press release?
Madam Speaker: I should like very much, if I may, to have the material that the hon. Gentleman has. I shall want to look into it very carefully. It certainly concerns the activities of the House—I entirely agree with the hon. Gentleman about that.
Mr. Tony Banks: On a point of order, Madam Speaker. I know that it is said that Prime Minister's Question Time generates more heat than light—but am I having a heart attack, or could it be the light at the end of the tunnel? The luminosity in the Chamber seems to have been significantly increased, to the extent that I now realise how ugly Conservative Members are. Some of us like to skulk in the dark at the back of the Chamber. Were you consulted about the change, Madam Speaker, and can we have an opportunity to say something about it?
Madam Speaker: I thought that it was very illuminating to have improved lighting in the Chamber. I heartily endorse it. For a while, I thought that it was because I had cleaned my spectacles rather carefully this morning.
Mr. Faulds rose—
Madam Speaker: It cannot be a point of order with which I have already dealt.
Mr. Faulds: I am quickly devising a response, Madam Speaker—but, while I do so, may I say that I urge my hon. Friend the Member for Newham, North-West (Mr. Banks) to lurk in dark corners more often, and not to assert his ugly profile so publicly and frequently?
On a point of order, Madam Speaker. You may not be aware—but I know that you study Hansard assiduously—that there was a gross misrepresentation a couple of weeks ago of a question of mine in business

803
questions. I took it up with the Editor of the Official Report, who was extremely responsive, and issued a corrigendum the next day—or a couple of days later—but did regret that there were so many frequent occurrences of this misrepresentation of what the House actually said.
Madam Speaker: The hon. Gentleman must be careful to recognise the difference between Hansard reporting and printing. The original point of order to me, and others earlier, were about the printing. This is not about our Hansard reporters in the Press Gallery; it is about the printing that hon. Members are concerned, and I take that on board.
Mr. Faulds: But it was a different point of order, in that case.
Madam Speaker: The hon. Gentleman might have made it clearer.

Points of Order
  DELEGATED LEGISLATION
  Motion made, and Question put forthwith, pursuant to Standing Order No. 101(4) (Standing Committees on Delegated Legislation),
  DELEGATED LEGISLATION

    DELEGATED LEGISLATION
    That the Occupational Pension Schemes (Winding Up) Regulations 1996 (S.I., 1996, No. 3126) and the Advanced Television Services Regulations 1996 (S.I., 1996, No. 3151) be referred to a Standing Committee on Delegated Legislation.—[Mrs. Lait.]
    Question agreed to.

    NORTHERN IRELAND GRAND COMMITTEE:
    That the Matter of the Public Expenditure Plans for Northern Ireland for 1997–98—1999–2000, being a Matter relating exclusively to Northern Ireland, be referred to the Northern Ireland Grand Committee for its consideration.—[Mrs. Lait.]
    Question agreed to.

Statute Law Balancing (Limit on Maximum Quantity)
3.39 pm
Mr. Anthony Steen: I beg to move,
That leave be given to bring in a Bill to oblige Ministers of the Crown, when proposing either to implement any proposal under the European Community Treaties for legislation by the Council of Ministers or to introduce any bill or statutory instrument, simultaneously to propose the repeal of at least a similar quantity of existing legislation to that which they propose to implement or to introduce.
The Bill seeks to halt the growth in the number of pages of statute law. The idea is nothing new. It comes from ancient Greece. In his play "The Frogs", Aristophanes tells how Dionysius, overcome by the plight of Athens, ventured to Hades to find a poet best suited to save the city. He was asked to judge a contest between Euripides and Aeschylus using a giant set of scales to weigh up the qualitative pros and cons of each line of poetry. Two and half thousand years later, we use an equivalent test every day. Cost-benefit analysis has become a common tool of government, and the extension of compliance cost assessments has made the weighing-up process easier and more precise.
Today, we consider only the qualitative aspect of legislation—what we do in the Chamber. No one gives a thought to the total quantity of law that has been passed. Since 1979, we have produced 220,000 pages of additional legislation. In the 235 years between 1715 and 1950, we passed 298 volumes of Acts of Parliament. In just 45 years since 1950, we have added a further 112 volumes of legislation.
I wonder whether we would have fared just a little better if less legislation had been passed, as it often damages competitiveness, affects our enterprise culture and restricts individual freedoms. It is therefore not a moment too soon to find a way in which to halt the never-ending expansion of the statute book.
Some people will argue that we live in an increasingly complex society, and that it is inevitable that there will be more and more legislation. Others say that the harmonisation of Europe has resulted in more European directives, but many of those new laws are unnecessary, and dozens already on the statute book have lost their importance and relevance.
The Government have valiantly tried to do something about the problem by attempting to push back the insidious growth of statute law, but even their deregulation initiative has run into problems, what with the laborious process of passing deregulation orders via a Select Committee and of trying to push Brussels to repeal outmoded directives originating there. Some success can be claimed in limiting the cost of the implementation of new directives in Britain, but gold plating still lurks in some Ministries. Unlike King Canute, Ministers with responsibility for deregulation have temporarily stemmed the tide, but they have been unable to reverse it.
I seek leave to introduce the Bill because we can reverse the tide. One way is to cut the time that the House sits. There is clearly a correlation between the amount of time we spend in Parliament and the amount of law we churn out. If we sat less, inevitably we would pass fewer laws. In 1950, we sat for just over four months; by 1995, we were sitting for more than

805
five months. Perhaps the Jopling reforms will prove a blessing in disguise by reducing the number of hours that the House sits, and thereby providing fewer opportunities to pass laws.
There is a second way: to use sunset clauses, which automatically lapse unless reinstated. However, the simplest approach, which I favour, is to place a limit on the total weight of the law. I take 1 January 1997 as my baseline. If a new Bill is passed by Parliament, an Act of equivalent weight or a mixture of Acts and statutory instruments must be repealed. Unless that is done, the new Bill would automatically come to a halt, and would not receive its First Reading. That is the most effective way to curb the growth of unnecessary and unwanted legislation.
The approach is well illustrated by Sir Edward Marsh, Sir Winston Churchill's private secretary, who had many paintings. When the walls of his flat were full, he hit upon a simple solution—that he would buy another painting only if he could sell or give away a painting from his existing collection. That is what we must do with our stock of legislation, and my test is not wall space but weight.
Any hon. Member proposing to introduce a Bill must first identify statutes of equal weight to be repealed, and I suggest that the judge could be the Deputy Prime Minister. He would sit at his desk with a set of scales that had been issued by the Clerk of Works. A Minister who wanted new legislation would have to appear before the Deputy Prime Minister with his new Bill and those that he wished to repeal. Only if the scales balanced would the new Bill be eligible for qualitative merit tests in the House.
Clearly, the quantitative test would call for a radical change in the culture of Westminster and Whitehall, since the whole raison d'etre of the civil service is to create new laws, introduce new regulations and enforce new rules rather than wade through existing legislation to see what can be thrown out. Balancing old legislation against new is simple, and that simplicity should commend itself to the House.
Passing laws has always been seen by all hon. Members as a panacea for all ills. When new problems come to light, the cry goes up, "Pass a law," in the belief that a solution will automatically follow. Often, that is not the
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case; and changing the law makes for other problems. If leave is granted to bring in the Bill, we shall have to adjust our approach. Even a private Member's Bill could be introduced only if existing private Members' or private legislation of the equivalent weight balanced it on the Deputy Prime Minister's scales. Knee-jerk reactions to local or national tragedies would no longer qualify on their own unless existing laws could be found to cancel them.
As things are, we are just piling new laws on top of old, similar to the layers of history that are exposed in an archaeological dig. The Bill would result in wider implications being considered when legislation is proposed. Of course worthwhile and important Bills could still go through Parliament, but with the added bonus of cutting out the dead wood on the statute book at the same time.
I seek leave in a somewhat light-hearted vein to underline a serious point. I used the weighing process as a metaphor to highlight a situation which few Members realise exists. As I have said, there have been 220,000 pages of additional legislation since 1970. Red tape, bureaucracy and over-regulation are long-term threats to our nation's competitiveness and they restrict our individual freedoms. We must be much more vigilant and more vigorous in tackling this issue.
Question put and agreed to.
Bill ordered to be brought in by Mr. Anthony Steen, Mr. Michael Alison, Sir John Cope, Sir Peter Emery, Sir Geoffrey Johnson Smith, Sir Sydney Chapman, Sir Anthony Durant, Sir Anthony Grant, Sir Michael Neubert, Sir Donald Thompson, Sir Gerard Vaughan and Mr. David Heathcoat-Amory.

Statute Law Balancing (Limit on Maximum Quantity)
  STATUTE LAW BALANCING (LIMIT ON MAXIMUM QUANTITY)
  Mr. Anthony Steen accordingly presented a Bill to oblige Ministers of the Crown, when proposing either to implement any proposal under the European Community Treaties for legislation by the Council of Ministers or to introduce any bill or statutory instrument, simultaneously to propose the repeal of at least a similar quantity of existing legislation to that which they propose to implement or to introduce.: And the same was read the First time; and ordered to be read a Second time upon Friday 14 February, and to be printed [Bill 93].
Orders of the Day
  Social Security Administration (Fraud) Bill
  As amended (in the Standing Committee), considered.
  Social Security Administration (Fraud) Bill
    New clause 1

      AGGRAVATED OFFENCE OF LANDLORD FRAUD
      '. Where a person is found guilty of an offence or offences under section 111A of the Social Security Administration Act 1992, as inserted by section 13 above, and the offence is or the offences are in respect of—

      (a) more than one claimant for benefit, and

      (b) benefits paid in respect of persons resident in accommodation owned, managed or controlled by him,

      he shall be liable, on conviction on indictment, to imprisonment for a term not exceeding twelve years or to a fine or to both, and in determining the level of any fine imposed, the court shall have regard to the sums dishonestly obtained by him.'.—[Mr. McLeish.]
      Brought up, and read the First time.
      3.49 pm
      Mr. Henry McLeish: I beg to move, That the clause be read a Second time.
      Madam Speaker: With this, it will be convenient to discuss also the following: Government amendments Nos. 5 to 7.
      Mr. McLeish: The Bill provides for careful examination of landlords' activities in housing benefit fraud, and new clause 1 would create a new offence of aggravated landlord fraud. We think that such an offence is necessary, because the Government have not yet been sufficiently tough on such fraud. In Committee, we discussed at great length the extent of the problem, and some of the points are worth repeating in the House.
      We are currently spending almost £11 billion on housing benefit, a sum which has grown dramatically since 1979. In 1979, we spent £440 million, at 1995–96 prices, whereas, in 1996–97, we spend more than £5.5 billion for private tenants. For local authority tenants, the amount has grown from £1.7 billion, in 1978–79, to £5.2 billion, in 1996–97. We are therefore talking about an enormous amount of public expenditure, and that is the first important context in which we should consider the new clause.
      The second context is that the scale of fraud is considerable. There is possibly a consensus that £1 billion of our annual £11 billion expenditure on housing benefit is being defrauded, although some people have suggested that the figure may be much higher. Although there is some controversy surrounding the £2 billion fraud figure that has been suggested and mentioned in some Social Security Select Committee decisions, that may be the upper level of housing benefit fraud.
      Nevertheless—no matter whether the figure is £0.5 billion, £1 billion or £2 billion—fraud costs an enormous sum of money, and the House and the Government, of whichever colour, must take it seriously. We have tabled new clause 1 because of the scale of the problem.
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      In Committee, the Government were sympathetic to a request for a landlord register, and we agreed that Ministers should go away and formulate a new clause dealing with some of the issues that we raised and then return to the Committee. Consequently, we withdrew our new clause dealing with a landlord register. The Government accepted that suggestion, which represent progress, which we welcome. Now the Government have an opportunity to pass a second test, on the matter of an offence of aggravated landlord fraud.
      The Minister said in Committee that the Bill already contained provisions to deal with that offence, but we do not accept that it does. The Bill is clearly focused on landlords and claimants, but far too much emphasis has been placed on claimants and not enough on landlords. Therefore, we want to strengthen the Bill's provisions, particularly those dealing with landlords. We also want to show landlords and the public that we are serious about the annual multi-million-pound fraud. In both the substance and the spirit of legislation, it is important that we send a powerful message to landlords, and especially to those in the private sector, that the House will not tolerate fraud, especially current levels of fraud.
      In new clause 1, we suggest that a person involved in aggravated landlord fraud
      "shall be liable, on conviction on indictment, to imprisonment for a term not exceeding twelve years or to a fine or to both, and"—
      of course—
      "in determining the level of any fine imposed, the court shall have regard to the sums dishonestly obtained by him"
      or her.
      We think that the type of offence that we are considering deserves the punishment we are suggesting, because there are different levels of landlord fraud. One landlord may have a few properties or a few tenants and be defrauding the system, perhaps in collusion with one or more of his tenants. There is then a gradation in criminal activity, however, in which some landlords in our cities are committing organised big-time fraud. We will simply be sending the wrong message if the Bill does not include a specific offence of landlord fraud.
      The new clause also deals with multiple fraud. It provides a tough prison term, but defrauding the state is a serious offence. Most of the London local authorities that have been at the sharp end of this serious crime suggested that the Bill needed to be strengthened even more, and we agree. We find it difficult to understand why the Government will not accept the further strengthening that Labour is offering now, just as we did in Committee.
      The Government have often talked about being tough on fraud—we support and applaud their attitude—but we have to match the rhetoric and fine words with tough action to show that we not only deplore what is happening but intend to root out the worst excesses of fraud by landlords.
      In the past few years, the amount of housing benefit going to the private sector has risen to the point where it will overtake that paid to public sector tenants. Indeed, over the next two years, perhaps another £800 million will be added to the private sector rent allowance housing benefit. That is a staggering sum.
      The Government should accept our proposal with good will. We want to toughen the Bill and strengthen the attack on fraudulent landlords. By accepting new clause 1,

      809
      the Government will do just that, and will send a powerful message to landlords who are currently defrauding the housing benefit system.
      Mr. Chris Davies: I warmly welcome the new clause, and urge the Government to accept it. Since 1988, there has been a 350 per cent. increase in the housing benefit paid to the private sector. As the hon. Member for Fife, Central (Mr. McLeish) said, the opportunities for fraud have increased considerably, and it is estimated that between £1 billion and £2 billion is disappearing into the pockets of fraudulent landlords.
      Fraudulent landlords are getting rich at the expense of the taxpayer. They are doing so in various ways: some simply continue to claim for a tenant who has moved on, while some create fictitious tenants in order to claim housing benefit. Others who own several properties form a conspiracy, and set out to defraud local authorities by arranging for fictitious tenants—or, indeed, real tenants using fictitious names—to move so rapidly from one of their properties to another that it is impossible for the local authority agents to pursue them effectively.
      One problem is that local authorities are so strapped for cash that they may not prosecute even when they know that fraud has taken place. Gathering the evidence required for a successful prosecution puts a strain on their manpower. Too often, when a landlord has been detected committing a fraud, all that happens is that the payment is stopped and the landlord goes unpunished. The penalties introduced in the new clause would concentrate the minds of local authorities and of the landlords who seek to defraud the taxpayer.
      The Government claim to be tough on crime, and the new clause simply apes the Government's own sentiments by introducing penalties to curb a problem that we all recognise as one of the utmost seriousness.
      The Parliamentary Under-Secretary of State for Social Security (Mr. Oliver Heald): A claimant or a landlord can be guilty of this offence. The new clause deals only with the sentence. How can it be right to lay down a sentence of 12 years for landlords involved in organised fraud and one of seven years for claimants involved in a series of organised attacks on the benefit system? That is nothing but ludicrous.
      Mr. Davies: With respect, we are dealing only with one new clause, which is aimed at landlords. Whether the matter should also be addressed in other ways is for the Minister to determine. It is for him to take the opportunity to table amendments at the appropriate time. If the Government wish to be tough on crime, they have an opportunity to demonstrate it.
      4 pm
      Mr. Frank Field: I should like to set the new clause in context. It is an extraordinary turn of events for the Minister to find himself in his current position. It must appear to the outside world that he is softer on crime by landlords than on crime by claimants.
      Mr. Heald: The Bill contains eight solid measures to tackle landlord fraud. Is the hon. Gentleman denying that?
      Mr. Field: No, I am not denying that. I await with anticipation the Minister's speech, in which I hope that he will put forward cogent arguments as to why the Government do not accept the new clause. I was merely warning him that, if he fails to do so, he will stand in the dock appearing to the public to have two standards—one for claimants and a gentler one for landlords, as the hon. Member for Littleborough and Saddleworth (Mr. Davies) has just said.
      The debate has taken a surprising turn. When the Select Committee on Social Security began its investigations into fraud, it had two clear objectives. The first was to find ways of protecting the largest of public budgets from people who make fraudulent claims, either accidentally or on a more organised basis. It seemed to us inconceivable that the budget was not under attack. The second objective was to try to build a consensus in the House—such a consensus exists in the country—on fighting fraud. It appeared to us that the easiest way to build a consensus was to seek redress for the abuses by claimants and landlords.
      One of the positive results of the report is the unanimity that has developed in the House on tackling social security fraud. Indeed, listening to what Ministers say, it becomes clear that the debate has so changed that Labour is now calling for tougher measures than those that the Government propose. That is the crux of the new clause. To answer the case cogently made by my hon. Friend the Member for Fife, Central (Mr. McLeish) and the hon. Member for Littleborough and Saddleworth, the Government must explain what measures in the Bill will fulfil the objectives of the new clause. If they fail to provide such an explanation, they will appear to voters to have two standards.
      It would not be surprising if a large number of people thought that. Until the new consensus emerged in the House, it was all too easy for the Government to put over the message that fraud was a claimant issue, allowing people to think subliminally that it was a Labour problem, because Labour supporters were perpetrating the fraud. The Select Committee report suggested a more even-handed approach to the issue.
      Labour has certainly adopted such an approach. We are as serious about rooting out individual abuse by claimants as about giving the authorities the most effective powers possible to counter landlord fraud. I wait with interest to find out how the Government will deal with that.
      Let me pick up another issue that was touched upon earlier in the debate. Have we become more effective in trying to prevent social security fraud, and do we always pursue those who perpetrate it? In other words, do we have a system of incentives that encourages local authorities not only to prevent fraud, but actively to prosecute those who commit fraud and publicly bring them to justice? Many Opposition Members are worried that, although the present structure of incentives and penalties seeks to prevent fraudulent claims—that is important—local authorities do not always have the resources to prosecute those who perpetrate large-scale fraud.

      811
      I hope that the Minister will not join the Secretary of State in skating on thin ice and trying to get away with double standards to counter fraud. At present, we are prepared to throw the book at fraudulent claimants, but we tend to be much more careful in respect of landlords.
      It may be true that fraudulent claimants get away with more money, but that is questionable. Nevertheless, there is no question that the largest individual acts of fraud are perpetrated by landlords, as it is much easier for them.
      Mr. Heald: The hon. Gentleman should recognise that the offence that the Bill addresses is the same whether it is perpetrated by a landlord or a claimant. The new clause proposes that the sentence for a landlord should be 12 years rather than seven years. How does the hon. Gentleman square that with a difficulty that regularly arises when organised gangs who are not landlords attempt to attack the benefits system? Their criminality is just as serious as that of fraudulent landlords. In those circumstances, why should there not be equality?
      Mr. Field: Indeed there should be equality. It is not too late for the Minister to table a manuscript amendment to that effect. We are anxious to make a distinction between fraud committed by individuals and that which is seriously organised by groups of people. The public are most concerned about that.
      As I have said, it would be inconceivable if the largest budgets were not under attack by organised crime, yet many people make a distinction between that category of social security fraud and fraud that is committed by individuals. It is not that the public approve of that fraud, but it is quite clear that certain individuals commit fraud because their position in the labour market has been transformed in the past 10 years by the Government's massive extension of means-tested assistance.
      Many such people keep quiet about the change in their circumstances because of the reduction in their personal income during that period. Although that is wrong and needs to be stopped, it is clearly different from the problem that the new clause seeks to address—landlord fraud and the groups of claimants to whom the Minister referred, who determinedly commit fraud against the public purse.
      I sit down with considerable excitement. I hope to hear not only that the Government intend to accept our new clause, but whether they will table a manuscript amendment seeking to single out groups who are organising fraud in a similar way to landlords, and treat them the same as fraudulent landlords.
      Mr. Ian Bruce: I came into the debate to speak on subsequent amendments that excited me, but having listened to the hon. Member for Birkenhead (Mr. Field) express his excitement about waiting for my hon. Friend the Under-Secretary to get to his feet, I have become excited about how much new Labour has permeated the thoughts not only of the hon. Gentleman, who is one of the most knowledgable
      812
      Members on social security matters, but the Liberal Democrats. It is extraordinary to see the web that is being woven. I am sure that Opposition Members are acting in an honourable way, but it is nonetheless an extraordinary way.
      The Labour party has traditionally been against landlords. Socialists would always be attacking them. Labour is obviously trying to put down a marker for when it goes back to being old Labour and returns to its socialist roots. It is trying to set a trap for the Government, so that it will be able to claim on the hustings and in its election manifesto that it is the tough party on law and order. Opposition Members know very well that the new clause will not be accepted.
      Mr. Field: The biggest landlords in the country are local authorities. The Opposition are as clear about preventing fraud among them as they are about preventing it among landlords in the private sector. There are no double standards on the Opposition Benches. It is interesting how standards are developing on the Conservative Benches. If we wait long enough before the excitement of the Under-Secretary's reply, we will no doubt see new Conservatism.
      Mr. Bruce: One might have to wait an awful long time for new Conservatism. Conservatism is, of course, a very basic approach, to which we have been sticking through thick and thin, despite the Labour party trying to out-Conservative the Conservative party.
      I was trying to expound what came through clearly from Opposition Members' speeches. Labour and Liberal Democrat Members are saying, "Here we have a wonderful opportunity through the new clause"—even if it is not voted on—"to say that we are the really tough group of people." Perhaps even the Ulster Unionists will be making such a claim, although I am sure that they are much too sensible to jump on the bandwagon.
      I am glad to say that all of us in the House are very pleased to see the clampdown on fraud. I am sure that my hon. Friend the Under-Secretary will be able to tell us whether other offences, such as conspiracies to defraud, would put very large fraud into a category outside the Bill's remit.
      Mr. Robert G. Hughes: In case my hon. Friend is misinterpreted, I should point out that, whereas the Labour Front Benchers and the Liberal Democrats are all over the place on the issue, the hon. Member for South Antrim (Mr. Forsythe), who serves on the Social Security Committee, knows precisely what he is talking about. He brings a great deal of wisdom and expertise to the Committee.
      Mr. Bruce: I am grateful for the trailer for the hon. Gentleman's speech. I was very careful not to put him on one side of the web or the other. I am sure that he will speak for himself, and very ably.
      We can clearly see the web that is being constructed. Labour Members are taking what they believe is a wonderful opportunity to say that they are tougher on crime than the Conservatives. One can see that entering

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      their election manifestos immediately. I am tempted to suggest to my hon. Friend the Under-Secretary that he accepts the new clause.
      Mr. Field: Ah, that is what we want.
      Mr. Bruce: With a big smile on his face, the hon. Gentleman says that that is what Labour wants, but is that really sensible?
      As many hon. Members know, I quite often speak about prisons—I am often invited on to television programmes to talk about the situation in them. There are two prisons in my constituency, and we might be getting a third. Labour and Liberal Democrat Members constantly tell me that long prison sentences do not work, and that the Government should be trying other measures.
      If the new clause had been tabled by the Government, a Labour party spokesman would no doubt have told us about the wonders of community service orders in dealing with multiple fraud. Such is the nonsense that comes up. I really stood up to speak so that, when we see the election manifestos, people will be able to go to Hansard, and so understand what the Opposition were up to.
      4.15 pm
      Mr. Clifford Forsythe: I sat through the Committee stage of the Bill, and well remember the debate there on this matter. I recall a suggestion from Opposition Members that they would leave the clause until it came to the Floor of the House, so as to give the Minister the opportunity to think the matter over and perhaps bring forward something acceptable to the Opposition.
      Knowing the Bill, I have listened to the Minister and heard his point that people should not be treated differently, and that, if there is a penalty for doing something that is wrong, it should apply to everyone equally. Of course, there is the difficulty that the Minister himself raised when speaking about organised gangs.
      If the Minister takes the view that those who are carrying out organised crimes should perhaps be treated differently, that could be extended to landlords, because, if they commit that sort of crime, it is arguable that a distinction should be made. While those who are receiving benefit personally might do something wrong through force of circumstances, it is arguable that, although the action is wrong, an allowance could be made because of the circumstances; whereas the Minister might consider that those who deliberately set out in an organised way to defraud the taxpayer should be treated differently.
      Mr. Heald: My point is that measures in respect of conspiracy to defraud and offences under the Theft Act 1968 are adequate to deal with such cases, and that the offence we are debating has its own special place in the scheme of things.
      Mr. Forsythe: I understand that, perhaps in a way that differs from the understanding of others on the Opposition Benches. I understand that the Government, and especially Ministers in the Department of Society
      814
      Security, are anxious to reduce fraud in the system, and I praise them for that. What is debatable is whether the system that they are now introducing is sufficient.
      Contrary to what the hon. Member for South Dorset (Mr. Bruce) said, I, as a member of a Committee, make up my mind on the basis of the debate, the argument and my instincts as to whether legislation is correct and will do what is it supposed to do. I do not want to frighten the Minister, but I shall listen carefully to what he says. I do not make up my mind beforehand.
      Mr. Ian Bruce: I am listened carefully to the hon. Gentleman. I had not intended to paint him into a corner with other Opposition Members, but he seems to be going down the same route.
      Let us imagine a case of organised fraud in which a massive fraud was organised by claimants—by people who were not landlords—who inveigled many landlords into taking part. If all the participants were prosecuted under the same Act, would it not be strange that the individual little landlords would be likely to receive a much higher sentence than the persons—the claimants—who did the massive organisation?
      Mr. Forsythe: I think that the hon. Gentleman has misunderstood, or perhaps he has a preconceived notion of the road that I am going down. However, I think that the Minister understands exactly what I am saying. I am patiently trying to put the two sides of the argument and achieve a balance. I have not made up my mind, and I have not yet recommended to my hon. Friends how we should vote. But I shall listen carefully to the Minister.
      I am a member of the Select Committee on Social Security, and I have listened to the evidence, as have others among my hon. Friends, so I shall be most interested to hear what the Minister has to say. The recommendation I make to my hon. Friends will be based on that, and on what has already been said.
      Mr. Heald: We have heard distinguished comments by my hon. Friend the Member for South Dorset (Mr. Bruce) and by the hon. Member for South Antrim (Mr. Forsythe), and interesting and helpful comments by others who have spoken. We have also heard the hon. Member for Fife, Central (Mr. McLeish) putting the case for the Opposition.
      However, I must start by saying that the new clause is really simply another attempt by Opposition Members to suggest that the Government and the Bill are in some way soft on landlord fraud. They are not. The reverse is true. Initiatives already in place, together with the measures in the Bill, amount to a 10-point plan to crack down on landlord fraud—
      Mr. Frank Field: Will the Minister give way?
      Mr. Heald: I should like to make a little progress first.
      Mr. Field: On that precise point?
      Mr. Heald: All right, then.
      Mr. Field: The Minister has misread the situation. We relied on the people in the field who are countering

      815
      fraud, both to help us choose the subject of our inquiry and to guide that inquiry. We did not come to the subject with views; we were not experts on it. The Bill follows many of the report's recommendations, and we are grateful for the Government's response. Those very people, who helped us to shape our inquiry and our report, suggested that we should investigate the area, and it is they who now suggest that the new clause is necessary. It is not a great game put up by the Opposition; it comes from the people who put us on to the issue in the first place.
      Mr. Heald: As you will have noticed, Madam Speaker, I was in the process of criticising the Labour Front-Bench spokesman rather than the hon. Member for Birkenhead (Mr. Field). I am always complimentary about the Select Committee, because of the complimentary remarks that it in turn has made about my right hon. Friend the Secretary of State and his efforts in this context.
      The 10-point plan contains new powers of entry for local authority investigators, which will enable them to enter landlords' business premises and to make inquiries about any person believed to be a benefit claimant or recipient. That new power will help in the fight against landlord fraud.
      There are also new powers, where the local authority has grounds for suspecting impropriety or fraud, to require a landlord or agent receiving direct payments to give information about all the properties that he owns and controls. That is another strong measure in the battle against landlord fraud.
      Thirdly, the new provision for the recovery of overpayments will discourage the type of fraud in which a landlord continues to receive benefit after a claimant has left the premises. It will do that by allowing for overpayment recoveries of benefit in respect of one tenant to be made from benefit paid direct to a landlord in respect of his other tenants. That is another strong measure in the battle against landlord fraud.
      The ability of local authorities to exchange information should make multiple claims, which represent one of the most common landlord frauds, much more difficult.
      The fifth measure will mean that crooked landlords will no longer be able to sit at home and use the postal redirection service to receive their ill-gotten gains. New powers in the Bill will enable the post office to return such post to the local authority that sent it, thus saving the taxpayer from landlord fraud.
      The new benefit fraud inspectorate, using the powers provided in the Bill, will assist local authorities by making recommendations to improve their anti-fraud performance, which will include measures to tackle landlord fraud. The seventh measure is the new offence of dishonest representation or failure to disclose, which is intended to be used against serious fraudsters including landlords.
      In addition, we announced in Committee that my right hon. Friend the Secretary of State intends to bring forward proposals for regulations as soon as practicable to enable local authorities to refuse or to terminate direct payments when an authority has reasonable
      816
      grounds for doubting that the recipient—including a landlord—is a "fit and proper person". The Department of Social Security will make clear in guidance to local authorities that they do not have to make direct payments to landlords unless claimants are substantially in arrears with their rent. The new measures give local authorities powerful new tools to tighten up on crooked landlords and to combat serious frauds.
      The eighth point is that the Government have made available £1 million in start-up money for the London organised fraud investigation team, which is designed to tackle serious landlord fraud in London. The team became operational in December 1996.
      The ninth measure is the national roll-out of the housing benefit matching service, run by the Department. This began in November 1996, and is expected to be complete by 1998. It is able to match one local authority's housing benefit data with that held by other authorities, and with DSS benefit data. Discrepancies which point to suspect claims—including false representations by landlords—will be referred for investigation.
      Where local authorities have information about landlords—for instance, those who have made false representations—this can be disclosed to other local authorities for the purposes of the prevention or detection of benefit fraud and checking the accuracy of housing benefit information under the new section 122E of the Social Security Administration Act 1992, which clause 3 introduces. This will help to stop multiple claims by landlords.
      Mr. Alan Howarth: The Minister has been describing a number of initiatives involving data management that are already under way. Are those measures legitimate under existing law, or will the Bill put them on a sound basis ex post facto?
      Mr. Heald: The existing data matching measures used by the Department are all covered by the legal regime under the Data Protection Act 1988, and they meet the terms of the European convention on human rights. The external data matching we carry out at present is limited to cases where there is evidence of fraud, and, in those circumstances, it is covered by the appropriate legislation. We are not approving something retrospectively, although the new powers will, of course, take us further in the data matching direction—something that the Select Committee recommended, and with which we agree.
      Under the anti-fraud incentive scheme—the tenth measure—local authorities receive significant additional subsidy when they successfully tackle all types of benefit fraud—including fraud by landlords. Moreover, local authorities were awarded a further £6 million this year to finance a variety of anti-fraud projects. It is sometimes said that there is not enough Government money to help with these tasks, but local authorities earned £27.8 million in 1995–96 in additional subsidy for successfully tackling fraud. It is estimated that that figure will be higher this year. When looked at together, the measures produce a substantial package to deal with landlord fraud.
      New clause 1 is a new variation on a familiar theme. In Committee, the Opposition sought to introduce an additional offence, which was intended to target

      817
      dishonest behaviour by landlords in connection with multiple claims to housing benefit and council tax benefit, with a maximum penalty of ten years imprisonment. The Committee rejected that proposal. Yet we now have before us a new clause that seeks to top that by introducing a maximum of twelve years for certain types of landlord fraud.
      I am pleased that, in tabling the new clause, the Opposition appear to have accepted my explanation that the offence in clause 13 applies equally to a landlord as to a claimant, and they no longer suggest that there should be a separate offence. I am disappointed that they continue to argue that landlord fraud is somehow inherently more serious than all other types of benefit fraud, including that committed by professional organised criminals.
      The real question is whether a separate, more severe sentence is needed for landlords. As I said in Committee, the new offence in clause 13 is not the only basis for prosecuting landlords who commit serious fraud. They can also be prosecuted—and are in appropriate cases—under the Theft Act 1968 and for conspiracy. Conspiracy to defraud and a Theft Act offence both carry a maximum penalty of 10 years' imprisonment.
      4.30 pm
      I fail to see any justification for a maximum penalty of 12 years directed specifically at landlords. Landlord fraud is serious, particularly when it involves abuse of a position of trust, but 12 years is a higher penalty than that for many serious offences against the person, such as indecent assault, cruelty to children, causing death by dangerous driving, or causing death while under the influence of drink or drugs.
      As I said in Committee, existing fraud offences for which there is a 10-year maximum sentence may involve multi-million-pound frauds or a particularly vulnerable victim, such as an old lady callously defrauded out of her life savings; yet new clause 1 would make a landlord who committed a serious fraud, but on a smaller scale and without aggravating circumstances, liable to 12 years in prison just because he was a landlord. The Opposition have failed to make a convincing case to show the need for such a severe maximum sentence.
      The Court of Appeal has considered the range of sentences which it and the courts feel are appropriate for serious dishonesty in the benefits field, involving large sums of money and an element of breach of trust. Its guideline, which is established as a benchmark, is six years' imprisonment for contested trials in those circumstances. Above that benchmark, the courts have headroom to pass even more serious sentences in more serious cases. However, it is hard to see what a landlord acting as a landlord would have to do to merit a sentence of 12 years, which is double the benchmark.
      In summary, landlord fraud is serious. The Bill introduces a range of practical measures that will help local authorities to investigate fraudulent landlords and bring them to justice. Landlords can be prosecuted under a range of tough offences, carrying maximum sentences of up to seven years under social security legislation and up to 10 years under the Theft Act 1968 and common law conspiracy. A separate, even more severe, sentence is just window dressing.
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      I shall now briefly explain the Government amendments. Clause 13 creates a new offence of dishonest representation for obtaining benefit. It covers dishonestly making a false representation, and dishonestly producing or furnishing false information, or causing or allowing another person to do so.
      Social security frauds can continue for a long, time and involve very many false declarations. In the past, we have relied on specimen charges to reflect that criminality. However, in 1996, in the case of R v. Clark, the Court of Appeal ruled out that approach. The implication for social security fraud is that the court would be able to sentence only on the basis of the specimen offences, each of which relates to only one period of two weeks, instead of being able to take into account the individual's full criminality in relation to benefit fraud. This is totally inappropriate where a fraudster is a landlord or a professional criminal, and hundreds of payments may be involved.
      We therefore need an offence—as serious as those under the Theft Act 1968—for those cases in which dishonest obtaining of benefit over a period is a direct consequence of a single false statement or failure to notify changes of circumstances, so that we can avoid having to charge for each girocheque obtained. This is intended to relate the entire dishonest overpayment to the person's initial false statement.
      That new offence is intended to be, in effect, what may be regarded as a continuing offence: an offence that covers the continuing period of dishonest behaviour. The inclusion of the offence of dishonest failure to report a change of circumstances is intended to enable the offence to relate to the full overpayment consequences arising from the failure to report, instead of relying on a series of false representations thereafter to the effect that no change had taken place.
      Clause 13 also makes it an offence for someone dishonestly to cause or allow another person to fail to notify a change of circumstances which regulations under the Social Security Administration Act 1992 require them to notify.
      I hope that I have not trespassed on the House's good will in outlining those details, but it is important to have the reasons for the change clearly stated on the record.
      The purpose of amendments Nos. 5 and 6 is to clear up any possible ambiguity in the reference to "him" in this subsection by making it clear that the "him" referred to is, in all cases, the person who is required by regulations to report the change of circumstances.
      Clause 14 extends the existing provisions in section 112 of the Act to include the offence of failure, without reasonable excuse, to report a change of circumstances which regulations require to be reported. It will also be an offence for someone knowingly to cause or to allow another person to fail to notify such a change of circumstances.
      Amendment No. 7 introduces a further test. The offence of "failing to notify" is being introduced to enforce the existing duty on beneficiaries to disclose a change of circumstances. Much social security fraud arises from omissions rather than acts of commission. That duty is laid on both claimants and, in certain circumstances, third parties.
      The provision will catch, where appropriate, automated credit transfer cases where no declarations are made at the point when payments are received and where a landlord

      819
      receiving direct payments of housing benefit fails in his duty to notify the local authority of a change. Such cases cannot easily be prosecuted under current legislation.
      As I explained to the Committee, it is not the intention that failures to notify caused by a genuine mistake should be treated as cases of fraud and prosecuted. In a case where a person is genuinely unaware of the relevance of a change of circumstances, the intention is that the safeguard of "reasonable excuse" would apply, and that, ultimately, the courts would decide what that constituted. Additionally, the legislation would operate within the framework of the Department's prosecution policy, which is to prosecute only where prosecutions are clearly in the public interest.
      We therefore believe that the defence of "reasonable excuse" provides all the safeguards needed, should proceedings be brought. Nevertheless, concerns were expressed in Committee, especially by the hon. Member for Southampton, Itchen (Mr. Denham), about the scope of the offence, particularly where it could be the underlying alleged offence for an offer of an administrative penalty under clause 15.
      In practice, we would not expect a prosecution or an administrative penalty offer in a case where the claimant genuinely did not know that a change of circumstances needed to be reported. However, having reflected on the points made in Committee, the Government consider that it would increase confidence in the prosecution and penalty arrangements if the offence were amended to underline the policy intention.
      The amendment therefore introduces an additional safeguard by adding to the offence of failing to notify the same test as applies elsewhere in section 112—that the person knows that he is required to notify the change of circumstances. That will ensure that only fraudsters can be offered penalties, and people who have simply made a mistake cannot be brought into the penalty regime. I hope that the amendment will allay the fears that were expressed.
      I propose to retain the test of "reasonable excuse", for the reasons that I explained when the matter was discussed in Committee. I want to exclude, for example, someone who had had to go to hospital and had not notified the change, even though he knew that he should have made that notification.
      Like the more serious offence in clause 13, clause 14 contains a reference to a third party causing or allowing another person to fail to notify a change of circumstances. As I explained in the introduction to the amendment to clause 13, there may be a possible ambiguity in the reference to "him". Amendment No. 7, therefore, in addition to introducing a test of knowledge, clears up that ambiguity by making it clear that the "him" referred to is, in all cases, the person who is required by regulations to report the change of circumstances.
      In summary, therefore, I ask the House to reject new clause 1 and to accept Government amendments Nos. 5, 6 and 7.
      Mr. McLeish: I am disappointed by the Government's response to new clause 1. In a sense, they have had three tests. First, we asked them to review the direct payments system and allow local authorities to stop direct payments
      820
      to landlords if fraud was suspected. They refused to accept that suggestion. Secondly, in Committee we proposed the creation of a landlord register. They accepted the merits of that proposal, and came back with their own new clause.
      Now we find that they will fail at the final hurdle, because this new clause has been concocted for the benefit of no one; it has been proposed so that this Parliament can say to landlords, "We shall simply not accept what you have been doing, and will crack down firmly with this new offence of landlord fraud." If the Government do not accept new clause 1, they are sending the wrong message to the country. That is why we hope that, as Conservative Members have suggested, there will be a consensus on being tough on the matter.
      It is not right to say that organised criminal landlord fraud is exactly the same as an individual claimant defrauding the system. Both are fundamentally and utterly wrong, but the difference is the scale of fraud and the volume of expenditure involved in the case of private housing landlords. That is the key reason that we want the new clause to be accepted.
      The Government have had their opportunity, but they have failed to accept new clause 1. We shall therefore divide the House.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 244, Noes 297.

      Division No. 64]

      [4.40 pm

      AYES

      Ainger, Nick

      Cohen, Harry

      Ainsworth, Robert (Cov'try NE)

      Cook, Frank (Stockton N)

      Allen, Graham

      Corbett, Robin

      Alton, David

      Cousins, Jim

      Anderson, Donald (Swansea E)

      Cox, Tom

      Anderson, Ms Janet (Ros'dale)

      Cunningham, Jim (Cov'try SE)

      Ashton, Joseph

      Cunningham, Dr John

      Austin-Walker, John

      Dafis, Cynog

      Banks, Tony (Newham NW)

      Dalyell, Tam

      Barnes, Harry

      Darling, Alistair

      Barron, Kevin

      Davidson, Ian

      Battle, John

      Davies, Bryan (Oldham C)

      Bayley, Hugh

      Davies, Chris (Littleborough)

      Beckett, Mrs Margaret

      Davies, Ron (Caerphilly)

      Bell, Stuart

      Davis, Terry (B'ham Hodge H)

      Benn, Tony

      Denham, John

      Bennett, Andrew F

      Dewar, Donald

      Benton, Joe

      Dixon, Don

      Bermingham, Gerald

      Dobson, Frank

      Berry, Roger

      Donohoe, Brian H

      Betts, Clive

      Dowd, Jim

      Blunkett, David

      Dunwoody, Mrs Gwyneth

      Boateng, Paul

      Eagle, Ms Angela

      Bradley, Keith

      Eastham, Ken

      Bray, Dr Jeremy

      Ennis, Jeff

      Brown, Nicholas (Newcastle E)

      Etherington, Bill

      Bruce, Malcolm (Gordon)

      Evans, John (St Helens N)

      Burden, Richard

      Ewing, Mrs Margaret

      Callaghan, Jim

      Faulds, Andrew

      Campbell, Mrs Anne (C'bridge)

      Field, Frank (Birkenhead)

      Campbell, Menzies (Fife NE)

      Fisher, Mark

      Campbell, Ronnie (Blyth V)

      Flynn, Paul

      Campbell-Savours, D N

      Foster, Don (Bath)

      Canavan, Dennis

      Foulkes, George

      Cann, Jamie

      Fyfe, Mrs Maria

      Chisholm, Malcolm

      Galbraith, Sam

      Clapham, Michael

      Galloway, George

      Clarke, Eric (Midlothian)

      Gapes, Mike

      Clelland, David

      Garrett, John

      Clwyd, Mrs Ann

      George, Bruce

      Coffey, Ms Ann

      Gerrard, Neil

      821

      Gilbert, Dr John

      Michie, Bill (Shef'ld Heeley)

      Godman, Dr Norman A

      Milburn, Alan

      Golding, Mrs Llin

      Miller, Andrew

      Gordon, Ms Mildred

      Mitchell, Austin (Gt Grimsby)

      Graham, Thomas

      Moonie, Dr Lewis

      Griffiths, Nigel (Edinburgh S)

      Morgan, Rhodri

      Griffiths, Win (Bridgend)

      Morley, Elliot

      Grocott, Bruce

      Morris, Ms Estelle (B'ham Yardley)

      Gunnell, John

      Morris, John (Aberavon)

      Hain, Peter

      Mowlam, Ms Marjorie

      Hall, Mike

      Mudie, George

      Hardy, Peter

      Mullin, Chris

      Harman, Ms Harriet

      Murphy, Paul

      Hill, Keith (Streatham)

      Oakes, Gordon

      Hinchliffe, David

      O'Brien, Mike (N Warks)

      Hodge, Ms Margaret

      O'Brien, William (Normanton)

      Hogg, Norman (Cumbernauld)

      O'Hara, Edward

      Home Robertson, John

      Olner, Bill

      Hood, Jimmy

      O'Neill, Martin

      Hoon, Geoffrey

      Orme, Stanley

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

      Pearson, Ian

      Howarth, George (Knowsley N)

      Pendry, Tom

      Howells, Dr Kim

      Pickthall, Colin

      Hoyle, Doug

      Pike, Peter L

      Hughes, Kevin (Doncaster N)

      Powell, Sir Raymond (Ogmore)

      Hughes, Robert (Ab'd'n N)

      Prentice, Gordon (Pendle)

      Hughes, Roy (Newport E)

      Prescott John

      Hughes, Simon (Southwark)

      Primarolo, Ms Dawn

      Hutton, John

      Purchase, Ken

      Illsley, Eric

      Quin, Ms Joyce

      Ingram, Adam

      Radice, Giles

      Jackson, Ms Glenda (Hampst'd)

      Randall, Stuart

      Jamieson, David

      Raynsford, Nick

      Janner, Greville

      Reid, Dr John

      Jenkins, Brian D (SE Staffs)

      Rendel, David

      Jones, Barry (Alyn & D'side)

      Robertson, George (Hamilton)

      Jones, Ieuan Wyn (Ynys Môn)

      Roche, Mrs Barbara

      Jones, Jon Owen (Cardiff C)

      Rogers, Allan

      Jones, Dr L (B'ham Selly Oak)

      Rooker, Jeff

      Jones, Martyn (Clwyd SW)

      Rooney, Terry

      Jones, Nigel (Cheltenham)

      Ross, Ernie (Dundee W)

      Jowell, Ms Tessa

      Rowlands, Ted

      Kaufman, Gerald

      Ruddock, Ms Joan

      Kennedy, Charles (Ross C & S)

      Sedgemore, Brian

      Kennedy, Mrs Jane (Broadgreen)

      Sheerman, Barry

      Khabra, Piara S

      Sheldon, Robert

      Kilfoyle, Peter

      Shore, Peter

      Lestor, Miss Joan (Eccles)

      Short, Clare

      Lewis, Terry

      Simpson, Alan

      Liddell, Mrs Helen

      Skinner, Dennis

      Litherland, Robert

      Smith, Chris (Islington S)

      Livingstone, Ken

      Smith, Llew (Blaenau Gwent)

      Lloyd, Tony (Stretf'd)

      Snape, Peter

      Llwyd, Elfyn

      Soley, Clive

      Loyden, Eddie

      Spearing, Nigel

      McAllion, John

      Spellar, John

      McAvoy, Thomas

      Squire, Ms R (Dunfermline W)

      Macdonald, Calum

      Steel, Sir David

      McFall, John

      Steinberg, Gerry

      McKelvey, William

      Stevenson, George

      Mackinlay, Andrew

      Straw, Jack

      McLeish, Henry

      Sutcliffe, Gerry

      McNamara, Kevin

      Taylor, Mrs Ann (Dewsbury)

      MacShane, Denis

      Taylor, Matthew (Truro)

      Madden, Max

      Thompson, Jack (Wansbeck)

      Maddock, Mrs Diana

      Thurnham, Peter

      Mahon, Mrs Alice

      Timms, Stephen

      Mandelson, Peter

      Tipping, Paddy

      Marshall, David (Shettleston)

      Touhig, Don

      Marshall, Jim (Leicester S)

      Trickett, Jon

      Martin, Michael J (Springburn)

      Turner, Dennis

      Martlew, Eric

      Tyler, Paul

      Maxton, John

      Vaz, Keith

      Meacher, Michael

      Walker, Sir Harold

      Meale, Alan

      Wallace, James

      Michael, Alun

      Wardell, Gareth (Gower)

      822

      Wareing, Robert N

      Wise, Mrs Audrey

      Watson, Mike

      Wray, Jimmy

      Wicks, Malcolm

      Wright, Dr Tony

      Wigley, Dafydd

      Williams, Alan (Swansea W)

      Tellers for the Ayes:

      Williams, Alan W (Carmarthen)

      Mr. Greg Pope and

      Winnick, David

      Mr. John Cummings.

      NOES

      Ainsworth, Peter (E Surrey)

      Dicks, Terry

      Aitken, Jonathan

      Dorrell, Stephen

      Alexander, Richard

      Douglas-Hamilton, Lord James

      Alison, Michael (Selby)

      Dover, Den

      Allason, Rupert (Torbay)

      Duncan, Alan

      Amess, David

      Duncan Smith, Iain

      Arbuthnot, James

      Dunn, Bob

      Arnold, Jacques (Gravesham)

      Durant, Sir Anthony

      Atkinson, David (Bour'mth E)

      Dykes, Hugh

      Atkinson, Peter (Hexham)

      Eggar, Tim

      Baker, Kenneth (Mole V)

      Elletson, Harold

      Baldry, Tony

      Emery, Sir Peter

      Banks, Matthew (Southport)

      Evans, David (Welwyn Hatf'ld)

      Banks, Robert (Harrogate)

      Evans, Jonathan (Brecon)

      Bates, Michael

      Evans, Nigel (Ribble V)

      Batiste, Spencer

      Evans, Roger (Monmouth)

      Beggs, Roy

      Evennett, David

      Bellingham, Henry

      Faber, David

      Bendall, Vivian

      Fabricant, Michael

      Beresford, Sir Paul

      Fenner, Dame Peggy

      Biffen, John

      Field, Barry (Isle of Wight)

      Body, Sir Richard

      Fishburn, Dudley

      Bonsor, Sir Nicholas

      Forman, Nigel

      Booth, Hartley

      Forsyth, Michael (Stirling)

      Boswell, Tim

      Forsythe, Clifford (S Antrim)

      Bottomley, Mrs Virginia

      Forth, Eric

      Bowden, Sir Andrew

      Fox, Dr Liam (Woodspring)

      Bowis, John

      Fox, Sir Marcus (Shipley)

      Boyson, Sir Rhodes

      Freeman, Roger

      Brandreth, Gyles

      French, Douglas

      Brazier, Julian

      Fry, Sir Peter

      Bright, Sir Graham

      Gale, Roger

      Brooke, Peter

      Gallie, Phil

      Brown, Michael (Brigg Cl'thorpes)

      Gardiner, Sir George

      Browning, Mrs Angela

      Garel-Jones, Tristan

      Bruce, Ian (S Dorset)

      Garnier, Edward

      Budgen, Nicholas

      Gill, Christopher

      Burns, Simon

      Gillan, Mrs Cheryl

      Burt, Alistair

      Goodlad, Alastair

      Butler, Peter

      Goodson-Wickes, Dr Charles

      Butterfill, John

      Gorst, Sir John

      Carlisle, John (Luton N)

      Grant, Sir Anthony (SW Cambs)

      Carlisle, Sir Kenneth (Linc'n)

      Greenway, Harry (Ealing N)

      Carrington, Matthew

      Greenway, John (Ryedale)

      Carttiss, Michael

      Griffiths, Peter (Portsmouth N)

      Cash, William

      Grylls, Sir Michael

      Channon, Paul

      Gummer, John

      Chapman, Sir Sydney

      Hague, William

      Clappison, James

      Hamilton, Sir Archibald

      Clark, Dr Michael (Rochf'd)

      Hamilton, Neil (Tatton)

      Clarke, Kenneth (Rushcliffe)

      Hampson, Dr Keith

      Clifton-Brown, Geoffrey

      Hanley, Jeremy

      Colvin, Michael

      Hannam, Sir John

      Congdon, David

      Hargreaves, Andrew

      Conway, Derek

      Harris, David

      Coombs, Anthony (Wyre F)

      Haselhurst, Sir Alan

      Coombs, Simon (Swindon)

      Hawkins, Nick

      Cope, Sir John

      Hawksley, Warren

      Cormack, Sir Patrick

      Hayes, Jerry

      Cran, James

      Heald, Oliver

      Currie, Mrs Edwina

      Heath, Sir Edward

      Curry, David

      Heathcoat-Amory, David

      Davies, Quentin (Stamf'd)

      Hendry, Charles

      Davis, David (Boothferry)

      Heseltine, Michael

      Day, Stephen

      Hicks, Sir Robert

      Deva, Nirj Joseph

      Higgins, Sir Terence

      Devlin, Tim

      Hogg, Douglas (Grantham)

      823

      Horam, John

      Pattie, Sir Geoffrey

      Howard, Michael

      Pawsey, James

      Howell, David (Guildf'd)

      Peacock, Mrs Elizabeth

      Howell, Sir Ralph (N Norfolk)

      Pickles, Eric

      Hughes, Robert G (Harrow W)

      Porter, David

      Hunt, David (Wirral W)

      Portilio, Michael

      Hunt, Sir John (Ravensb'ne)

      Powell, William (Corby)

      Hunter, Andrew

      Rathbone, Tim

      Hurd, Douglas

      Redwood, John

      Jack, Michael

      Renton, Tim

      Jackson, Robert (Wantage)

      Richards, Rod

      Jenkin, Bernard (Colchester N)

      Riddick, Graham

      Jessel, Toby

      Rifkind, Malcolm

      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

      Roe, Mrs Marion

      Key, Robert

      Rowe, Andrew

      King, Tom

      Rumbold, Dame Angela

      Kirkhope, Timothy

      Ryder, Richard

      Knapman, Roger

      Sackville, Tom

      Knight, Mrs Angela (Erewash)

      Sainsbury, Sir Timothy

      Knight, Greg (Derby N)

      Scott, Sir Nicholas

      Knight, Dame Jill (Edgbaston)

      Shaw, David (Dover)

      Knox, Sir David

      Shaw, Sir Giles (Pudsey)

      Kynoch, George

      Shephard, Mrs Gillian

      Lait, Mrs Jacqui

      Shepherd, Richard (Aldridge)

      Lamont, Norman

      Shersby, Sir Michael

      Lang, Ian

      Sims, Sir Roger

      Lawrence, Sir Ivan

      Skeet, Sir Trevor

      Legg, Barry

      Smith, Sir Dudley (Warwick)

      Leigh, Edward

      Smith, Tim (Beaconsf'ld)

      Lennox-Boyd, Sir Mark

      Soames, Nicholas

      Lester, Sir Jim (Broxtowe)

      Speed, Sir Keith

      Lidington, David

      Spencer, Sir Derek

      Lilley, Peter

      Spicer, Sir Jim (W Dorset)

      Lloyd, Sir Peter (Fareham)

      Spicer, Sir Michael (S Worcs)

      Lord, Michael

      Spink, Dr Robert

      Luff, Peter

      Spring, Richard

      Lyell, Sir Nicholas

      Sproat, Iain

      MacGregor, John

      Squire, Robin (Hornchurch)

      MacKay, Andrew

      Stanley, Sir John

      Maclean, David

      Steen, Anthony

      McLoughlin, Patrick

      Stern, Michael

      McNair-Wilson, Sir Patrick

      Stewart, Allan

      Madel, Sir David

      Streeter, Gary

      Maitland, Lady Olga

      Sumberg, David

      Malone, Gerald

      Sweeney, Walter

      Mans, Keith

      Sykes, John

      Marland, Paul

      Tapsell, Sir Peter

      Marlow, Tony

      Taylor, Ian (Esher)

      Marshall, John (Hendon S)

      Taylor, John M (Solihull)

      Marshall, Sir Michael (Arundel)

      Temple-Morris, Peter

      Mates, Michael

      Thompson, Sir Donald (Calder V)

      Mellor, David

      Thompson, Patrick (Norwich N)

      Merchant, Piers

      Thornton, Sir Malcolm

      Mitchell, Andrew (Gedling)

      Townend, John (Bridlington)

      Mitchell, Sir David (NW Hants)

      Townsend, Sir Cyril (Bexl'yh'th)

      Moate, Sir Roger

      Tracey, Richard

      Monro, Sir Hector

      Tredinnick, David

      Montgomery, Sir Fergus

      Trend, Michael

      Needham, Richard

      Trotter, Neville

      Nelson, Anthony

      Twinn, Dr Ian

      Neubert, Sir Michael

      Vaughan, Sir Gerard

      Newton, Tony

      Waldegrave, William

      Nicholls, Patrick

      Walden, George

      Nicholson, David (Taunton)

      Walker, Bill (N Tayside)

      Norris, Steve

      Waller, Gary

      Onslow, Sir Cranley

      Ward, John

      Oppenheim, Phillip

      Wardle, Charles (Bexhill)

      Ottaway, Richard

      Waterson, Nigel

      Page, Richard

      Watts, John

      Paice, James

      Wheeler, Sir John

      Patnick, Sir Irvine

      Whitney, Sir Raymond

      Patten, John

      Whittingdale, John

      824

      Widdecombe, Miss Ann

      Wolfson, Mark

      Wiggin, Sir Jerry

      Wood, Timothy

      Wilkinson, John

      Yeo, Tim

      Willetts, David

      Young, Sir George

      Wilshire, David

      Tellers for the Noes:

      Winterton, Mrs Ann (Congleton)

      Mr. Bowen Wells and

      Winterton, Nicholas (Macclesf'ld)

      Mr. Sebastian Coe.

      Question accordingly negatived.

    New clause 2

      CODE OF PRACTICE ON PRIVACY
      '—(1) The Secretary of State shall prepare a Code of Practice on the use and processing of personal data for purposes associated with the provisions of this Act or any enactment amended by this Act.
      (2) A copy of any Code of Practice prepared under the provisions of this section shall be laid before Parliament.
      (3) Before he lays before Parliament a copy of any Code of Practice prepared under the provisions of this section, it shall be the duty of the Secretary of State to publish a draft of that Code and consider any representations made to him about that draft by—

      (a) the Data Protection Registrar, and

      (b) any other person or body,

      and he may modify that draft accordingly.
      (4) A Code of Practice prepared under the provisions of this section shall not come into effect until it has been approved by resolution of each House of Parliament and issued by the Secretary of State.
      (5) The Secretary of State may from time to time revise the whole or any part of a Code of Practice issued under the provisions of this section, and the provisions of subsections (1) to (4) above shall apply to any such revision, with appropriate modifications.
      (6) It shall be the duty of the Data Protection Registrar to keep under review compliance with any Code of Practice issued under the provisions of this section, and in pursuance of this duty he shall have power to require the provision of any information necessary to him in the discharge of this duty.
      (7) Where the Registrar considers that the provisions of any Code of Practice issued under this section have been breached, then such a breach will be deemed to be a breach of the data protection principle or principles to which that part of the Code relates.
      (8) The Secretary of State shall lay before Parliament annually a report on the monitoring of compliance with any Code of Practice issued under the provisions of this section.
      (9) In this section, "data protection principles", "Data Protection Registrar", "personal data", "processing" and related expressions have the same meaning as in the Data Protection Act 1984.'—[Mr. McLeish.]
      Brought up, and read the First time.
      Motion made, and Question proposed, That the clause be read a Second time.—[Mr. McLeish.]
      Mrs. Anne Campbell: It is necessary to provide a clear legal basis for the use and disclosure of information. I remind the House that we are discussing information that has been collected for one purpose but will be used for another. Such data may be supplied by statute to the Inland Revenue or by a person who is claiming benefit. People provide the information voluntarily because they believe that they are entitled to claim benefit.
      We have a duty to protect both kinds of information, but we have a particular and pressing duty to safeguard information that must be disclosed according to Government requirements. The Bill proposes to use the information supplied by disclosing it to other Departments

      825
      and local authorities in order to detect fraud. The Opposition support that objective, but the Bill contains wide powers for data matching activities that may be carried out in two ways: first, by checking an individual's details with other databases—for example, by checking whether an address supplied is valid or income details remain the same—and, secondly, by performing a side-by-side comparison of two or more large databases to detect trends, anomalies and potential duplicates.
      It is possible to compile a comprehensive picture of an individual, and to identify likes, purchase habits and credit behaviour. Alternatively, the information may be used to detect similarities and differences between data that are collected for different purposes—for example, someone may be collecting social security and paying income tax. The information may be used both as a commercial tool and as a weapon in the fight against fraud.
      With the proposed privatisation of many Department of Social Security functions, many data will end up in the hands of private operators. The two remaining bidders for Project Accord—the centralised computer project in the Department—are American, and one is registered in Liechtenstein. There is no guarantee that work will not be exported to another country to take advantage of cheap wages. The Department of Social Security is accountable to Parliament, but that partner would be far removed from it.
      New clause 2 does not contain any proposals that the Government have not already acknowledged. In their Green Paper, "Government direct", the Government state specifically that people want their interests to be protected. The document says:
      "people want to be assured that their interests—such as their reputations, their finances, their entitlements and their prospects in life—are properly safeguarded. Information about them must not be misused, wrongly disclosed, accidentally revealed or fraudulently obtained … New methods of service delivery outlined in this Green paper will be developed in accordance with the requirements of the UK's international data protection obligations."
      It also promises that the Government will consult the Data Protection Registrar so that the collection, use and disclosure of data can comply with the necessary requirements and meet the necessary standards of protection. It goes on to give an assurance that the commitment to consultation on all those issues will apply equally once the European Community data protection directive is in force.
      The Opposition want the Government to do what they have said they want and intend to do in "Government direct". I have quoted the Government's own words—but they are empty promises unless the Government can ensure that public concerns are met. Labour proposes that the Government achieve that aim through the provision of a code of practice to regulate the way in which information is used and disclosed.
      Mr. Heald: The problem with new clause 2 is that it applies to only a limited area of government, so we would end up with a piecemeal approach to data protection rather than the seamless provision that everyone wants. Consultations are taking place on the European data protection directive and the "Government.direct" Green Paper. That is surely the proper place to deal with those issues.
      Mrs. Campbell: The Minister is correct to say that we shall soon require new legislation to bring the EC data
      826
      protection directive into force. It will apply only to data that are specifically guarded by EC legislation, and it will not apply across government as a whole. There will be a time lag before that directive is implemented in the United Kingdom, so we shall require some protection in the interim. Our proposal has been suggested by the Data Protection Registrar herself, to protect the interests of individuals in the meantime.
      If we consider the possible abuses, it is clear what problems may arise. I am sure that the right hon. Member for Kingston upon Thames (Mr. Lamont) felt angry and betrayed when the details of his unpaid Visa bill were made public. Similarly, members of the royal family were embarrassed and dismayed when it was revealed that a private telephone conversation had been recorded.
      It is clear that, when the technology was invented, such activity was not intended to happen. We must guard against the unexpected and the harmful. Intrusion into private lives could become commonplace if regulation is not put in place. The stakes are high. I urge the Government to think twice before being cavalier about privacy.
      5 pm
      We propose a code of practice, but we do not set out what should be in it. There should be full public consultation, and the Data Protection Registrar's advice should be sought. The code of practice may need to be reviewed regularly, as technologies change rapidly, security requirements differ over time as criminals discover new techniques for defrauding the system, and international treaties may change our obligations. Flexibility is required. The new clause would provide for a code of practice, which should be drawn up after consultation and introduced by regulation.
      The Minister referred to the EC data protection directive. We do not yet know what form of domestic legislation will transpose that directive into United Kingdom law. The statutory code that we propose should serve to ensure that decisions that are made on the basis of automated, data-matching exercises are not in breach of article 15, which gives individuals the right not to be subject to an automated individual decision, although there may be exemptions. As a person who has suffered damage as a result of a breach of the data protection principles can claim compensation, it is important that the Secretary of State takes note of that. He should now establish procedures that would avoid that problem.
      Our proposal is by no means unusual. In Australia, Canada, New Zealand, the United States and Germany, data matching by government is subjected to independent scrutiny. Individuals who are identified in "hits" as a result of data matching must have a chance to make representations.
      I hope that the Minister will accept the new clause, or at least agree to introduce a clause of his own when the Bill goes to the other place. Our proposal follows the advice given to the Secretary of State by the Data Protection Registrar in a letter dated 10 January. If the Minister will not safeguard personal privacy by a code of practice, I hope that he will spell out in his reply precisely what he will do instead.
      Mr. Ian Bruce: I shall comment briefly on the excellent provisions in the Bill, and explain why I believe that the new clause, although worthy, should not be accepted.

      827
      Hon. Members will have heard me talk about the European informatics market group, which has an unfortunate acronym—it sounds like something completely different unless one listens carefully. That all-party group considers issues such as data protection. It was set up because of an unfortunate EC draft directive that probably would have destroyed the whole of the informatics market in the United Kingdom. The hon. Member for Cambridge (Mrs. Campbell) raises her eyebrows, but she will be pleased to know that the current draft directive, which is doing the rounds in Europe, is more to the United Kingdom's liking and to the liking of the European informatics market group, which has taken sensible advice.
      The United Kingdom civil service has almost the most enviable record of any civil service in the world on keeping people's personal data secret and secure. It may not have such an enviable record on keeping the Government's secrets secure—especially when draft information is being sent between Departments—but we should be proud of what the Inland Revenue, the Department of Social Security and housing benefit offices in our town halls have already achieved. The codes of practice they work to are exemplary.
      We are considering whether it is right or wrong to allow information that is collected for one purpose to be used in matching to discover whether criminals—I emphasise that—are trying to rip off the system and steal taxpayers' money. No hon. Member who has read the reports of the Social Security Committee can be in any doubt that we should use whatever technology is available to check that we are making best use of public money, and that we are not being ripped off.
      The Opposition propose that, instead of having discrete information in discrete Government Departments, we should establish a special code of practice with a special form of policing to cover the exchange of such discrete information between Departments. That is an unnecessary leap.
      The Data Protection Registrar has made many proposals. Many aspects of our data protection registration are nonsense. We can prosecute people if they do not register to operate and keep data—if they have not informed the registrar—but once they have registered, there is not a lot that the registrar can do to them. It is important for the registrar to lay down principles. We should not have a bureaucratic system. We should ensure that remedies are available to people who are damaged because data on them have been passed on when they should not have been. We should examine that aspect of the problem.
      It is long past time that we had this exchange of information. Many hon. Members will know that I ran an employment agency in Yorkshire for about 12 years. Towards the end of that time, the Department of Social Security found out that a temporary member of staff had more than one job. In fact, that individual had five jobs and was claiming unemployment benefit and social security. The Department knocked on our door and said, "This person has been claiming and has also been working for you." I said that I could provide the necessary details, because we had told the Inland Revenue and the Contributions Agency that that person was working for
      828
      me. I was amazed that that information had not immediately been passed to the Department of Employment so that it could check the details.
      When the investigator asked whether we could give him a list of all the people who had been working for us in the past six months, I said, "No problem," and provided him with a complete list. We found that a third of the people who were registered in our agency were working for us, being paid by us, paying taxes and national insurance—and receiving unemployment benefit.
      The first thing that amazed me was the time that it had taken the Department of Social Security to ask us for information. We were only too happy to co-operate: we were taxpayers, and we wanted to ensure that people were "signed off' before coming to work for us. Following the successful outcome of our passing information to the Department, however, I was even more amazed when it did not contact us again.
      I strongly believe that data matching should be available to Departments that are trying to establish whether people are ripping off the system. It is very simple; it is a case of churning through data, using high-powered computers, and trying to find a match. Records involving people who are not in any way suspicious are ignored. No person examines the records: certain information is thrown up that looks a little suspicious—perhaps 50 people, all supposedly living at the same address, claiming housing benefit, or perhaps 30 people with different names claiming unemployment benefit in a one-bedroom flat. A large number of people may be found to have the same date of birth, and to be living in the same place. I am sure hon. Members will agree that that is the kind of information that we want to find.
      The hon. Member for Cambridge made an impassioned plea for data to be treated properly. She should accept that this country has a good record on ensuring that personal data are kept in an appropriate way. Most people would be amazed to learn that information they give to one Department is not shared with others. Most honest citizens would probably consider sharing entirely normal and natural; it is because the crooks know that it is not that they have been getting away with murder for years.
      I oppose the new clause.
      Mr. Chris Davies: I do not believe that any hon. Member can wish to do other than end benefit fraud. Money should, of course, reach those who are most in need, and not be siphoned off by people who are out for private gain, and defraud taxpayers and other claimants for their personal advantage. People should not, however, be able to take advantage of the bureaucratic obstacles that may exist now in order to play one Department off against another. We support the widening of powers to ensure that data can be cross-referenced to enable crooks and fraudsters to be caught out.
      As long as the powers in the Bill are used as they are intended to be used, there will be no problem. The question is, how do we ensure that that happens? How do we prevent civil servants with access to information from going on fishing expeditions to find out—for reasons of curiosity, devilment or desire for personal gain—the private details of other citizens? The details may be those of a personal acquaintance: a neighbour, perhaps, or an ex-wife's new partner.

      829
      One thing is certain. The House cannot rely on the good behaviour of every civil servant; that is expecting too much of human nature. As sure as eggs is eggs, there will be cases of abuse.
      I listened with interest to the comments of the hon. Member for South Dorset (Mr. Bruce). He spoke of the specific information that would be available, giving us to believe that it would be possible to gain access only to that information; but a National Audit Commission report published in March 1995 noted 655 reported incidents of computer hacking among civil servants—staff who were exceeding their authority by using passwords to obtain information about members of the public which they intended to disclose, or did disclose, to outsiders. That happened two years ago.
      Mr. Bruce: It is interesting that the hon. Gentleman should raise the subject of computer hacking. Does he accept that someone who opens a filing cabinet and examines a piece of information in that cabinet can get away with it very easily, but that someone who hacks into a computer leaves an audit trail? Many people say that a computer is less secure than a filing cabinet, but I would contend that it is much more secure.
      Mr. Davies: The hon. Gentleman misses the point. He may be correct in saying that it is possible for computer hacking to be detected—if, that is, someone is aware that it is taking place, and bothers to go and check. There is clearly a huge difference between access to one filing cabinet in one Department and the ability to touch a computer keyboard and gain access to a full range of Government information on the screen. The technology that is now at our disposal, and the sheer amount of information on private citizens that is stored in Government offices, create an opportunity for the fostering of Orwellian conditions.
      As Liberty has pointed out in the past few days, there is a danger that human rights may be violated if the Bill is passed in its present form. The House must remember that it has an obligation not only to protect taxpayers from fraud, but to protect and safeguard the liberties of all individuals, along with their privacy. It must give them the right to ensure that that privacy is not invaded without specific and lawful reason.
      5.15 pm
      In an intervention, the Minister said that powers would shortly be introduced to ensure that access to information was properly controlled, but I, for one, do not feel happy about supporting proposals now on the assumption—only the assumption—that safeguards will be introduced later. In the past few weeks, the official Opposition's approach to the Police Bill has demonstrated all too clearly that they do not share the approach of Liberal Democrats and, I believe, Liberty to the defence of civil liberties. That does not make us feel confident that the safeguards mentioned by the Minister are likely to be introduced if the official Opposition become a Government later this year.
      None the less, I support the proposals for a code of practice, which go some way towards meeting my concerns. I ask hon. Members to remember that we have a duty to set standards that are, in this respect, at least as tough as those applying in other democracies, and that we should not forsake that duty.
      Mr. Alan Howarth: In contemplating the Bill, we face a dilemma. We are all committed to introducing measures
      830
      and powers to prevent and expose fraud, but, equally, we should all be committed to safeguarding civil rights, and, in particular, the right to privacy that is enshrined in article 8 of the European convention on human rights. We must strike a balance. That involves a difficult judgment, but I believe that the introduction of the code of practice proposed in new clause 2 would help us to strike the right balance. At present, such a balance is grievously lacking.
      Last week, I asked the Secretary of State a question about this matter, and his response was not discouraging. I hope that the Minister will be able to tell us today that it is indeed the Government's intention to introduce a code of practice—but we must wait and see what he says.
      In the meantime, hon. Members are doubtless aware of the legal opinion with which Liberty was provided by Mr. Richard Drabble QC and Dinah Rose, who clearly consider that the Bill fails to constrain powers within the exceptions that are set out in the second paragraph of article 8 of the European convention—the exceptional circumstances in which intrusion into privacy can be justified. They doubt whether the powers that would be exercised under the Bill could be regarded as being in accordance with the law; in the sense that the Bill creates such large discretion, and omits so comprehensively to provide safeguards, that it would not be possible for the citizen to regulate his conduct with sufficient precision—to use the terminology of legal opinion. They question whether the Bill, and the actions that could be taken under it, would be proportionate.
      Of course there is a pressing social need to address the problem of fraud, but it remains at the very least highly doubtful that such far-ranging powers should be taken and exercised by the Government and their agencies, invading the privacy of the individual citizen through data matching. The opinion's authors deplore the absence of an effective remedy, to which the citizen should be entitled under article 13 of the convention when there is abuse of his privacy. They say that, before someone's personal records are divulged to others, there should at least be grounds for suspicion or, at any rate, inaccuracies and inconsistencies should already have been demonstrated. Of course, the Government will contend that, until they have the data matching powers, it will not be possible to demonstrate the inaccuracies and the inconsistencies, as is necessary in the effort to deal with fraud, so we are clearly faced with a conundrum.
      What the House cannot be in doubt about is that the Bill provides for a large extension of state powers. It amends section 122 of the Social Security Administration Act 1992 so that the Inland Revenue, Customs and Excise and other Departments may pass on information to the Secretary of State. He may pass on information to local authorities and their contractors, who may pass it on to each other—not to mention access to the Royal Mail's database for redirection of mail. We are therefore talking of a vast increase in the scope for data matching and of the use of extended powers not just for purposes of prevention, detection, investigation and prosecution of fraud, but to enable greater accuracy to be achieved in records.
      Then there is the catch-all phrase:
      "any other matter relating to social security".
      The Department of Social Security already has powers to obtain information from other Departments when it investigates fraud, but, if the Bill is passed in its present

      831
      form, the Department will have powers to embark on wholesale trawling of increasingly large databases. As my hon. Friend the Member for Cambridge (Mrs. Campbell) said, that must at least be contrary to the 1981 European convention on data processing, which stipulates that data compiled for one purpose should not be used for another.
      Safeguards need to be introduced. We need legislation to incorporate the new European data protection directive. We also need privacy legislation. We should incorporate the European convention on human rights into our domestic law and, following satisfactory public debate, introduce a Bill of Rights in Britain.
      In response to my intervention, the Minister said that the Bill was not needed to legitimise existing data matching, but I understand that, since April 1995, the Department has cross-checked certain benefit payments, looking for inconsistencies and multiple claims. The London fraud initiative is already under way. Existing legal powers must be being stretched to their ultimate, if not being overstepped. We should be careful and sensitive about civil liberties. The Police Bill has been mentioned, and I think that we are all conscious of this issue's delicacy.
      There was a story in the press recently—I think last Sunday—about benefit spies joining police road checks. It said that fraud investigators and the Benefits Agency were interrogating people who were stopped by police in routine roadside checks and that, last year, up to 10,000 vehicles were checked. Benefits Agency staff were alongside the police as they did that.
      Liberty reports that some people who were questioned were not told of their right to stay silent. That must worry us all. There is always the temptation for big government and officialdom to step beyond where they should go in the exercise of their powers, using excessive zeal, and jeopardising civil liberties. That is why it is particularly important for the code of practice to be incorporated into the Bill.
      Mr. Bruce: The hon. Gentleman seems to be supporting the Bill but saying things that would preclude its being passed. May I give him an example? The original data protection directive said to people who wanted to mail a person information that was unrelated to the fact that they had the person's name and address from another source that they first had to mail the person and say, "Am I allowed to mail you something?" but, by doing that, they would have broken the law in the first place. That is the way we can go if we take it absolutely at face value that no one is allowed to cross-check information that is given to the Government.
      Mr. Howarth: I think that the hon. Gentleman misunderstands me. I am not suggesting that there should not be data matching. I argue that data matching should be circumscribed by powers that enable the citizen to be protected. Limitations on data matching should be set out in a code of practice, which can evolve over time to match best practice internationally, and match agreements that we enter into. We would have flexibility within what I hope would be an absolutely resolute desire to strike the balance that we need between the civil rights of the individual citizen, particularly the citizen's right to
      832
      privacy, and the Government's obvious duty to do what they can to stamp out fraud. I am arguing not for an absolute in one direction or the other, but for maximum care.
      I hope that, in the exercise of whatever powers the Government take through the Bill, they will always be anxious to do what they can to minimise intrusion into privacy by using, for example, privacy enhancing technology such as encryption and "pseudonymisation", ensuring that names of individuals about whom data may be revealed are known to the minimum number of officials and only in circumstances when that can be absolutely justified.
      In Committee, I quoted from DSS research report No. 56 on "Confidentiality: the public view"—the Department-commissioned report by Mr. Alan Hedges. Its findings should warn Ministers that public opinion is sensitive in this matter, and they must be extremely careful in deciding what powers to take—and certainly in the exercise of those powers.
      My hon. Friend the Member for Cambridge described how legislative practice in other countries has moved well ahead of ours. By the autumn of next year, we shall have to legislate to incorporate into our law the new European directive. That will inevitably provide a new legislative context for the Bill's operation, but, as we do not have that safeguard in place, it is all the more important, as she has said, that the code of practice should be incorporated.
      Mr. Harry Cohen: I support the new clause, which provides for a code of practice on privacy. First, it does not adversely impact on data matching for anti-fraud activity. All it does is ensure that such activities comply with a code of practice that is approved by the Data Protection Registrar.
      I tabled a parliamentary question on the Bill to the Under-Secretary of State for Social Security. His answer stated:
      "The registrar wrote to my right hon. Friend, the Secretary of State, on 10 January about the scope of the disclosure of information powers contained in the Bill, advocating the introduction of a statutory code of practice for DSS datamatching activities."—[Official Report, 27 January 1997; Vol. 289, c. 108.]
      Therefore, the registrar clearly supports the new clause's purpose.
      Liberty's opinion has already been quoted to the House. Its press release, published on 31 January, said:
      "Liberty today published a legal opinion from two leading lawyers, one of whom is a Queen's Counsel, which states that the "Datamatching" provisions of the fraud Bill breach the right to privacy contained in the European Convention on Human Rights."
      Liberty stated:
      "The opinion is by Richard Drabble QC and Dinah Rose who are experts in social security and the law of the European Convention on Human Rights and advise the government on such matters."
      A code of practice would help to prevent Ministers from breaching our international obligations under recommendation R(86)1 of the Council of Europe convention. Although the United Kingdom has opted out of the provisions of paragraphs 1.2, 3.3 and 5 of the recommendation, it has not derogated from paragraph 4.3, which states:
      "Personal data should not be communicated outside the framework of social security for other than social security purposes except with the informed consent of the person concerned or in accordance with other guarantees laid down by domestic law."

      833
      The importance of paragraph 4.3 is that, if other uses occur, guarantees must be laid down in domestic law.
      5.30 pm
      Clause 1 replaces section 122 of the Social Security Administration Act 1992, and clause 1(4) shows that personal data can be lawfully supplied to other organisations. There is no statutory guarantee offering the protection that the recommendation proposes. A code of practice would supply such a guarantee.
      My second reason for supporting a code of practice is that the legislation has the potential to negate most of the Data Protection Act 1988. As the House knows, that has eight principles, and the Bill could negate all of them. I shall refer to a couple of those. The first principle states:
      "The information to be contained in personal data shall be obtained and personal data shall be processed, fairly and lawfully."
      Clause 1(4) makes lawful certain disclosures of detail from the Inland Revenue to the Department of Social Security and vice versa. Later clauses legalise disclosures to local authorities and vice versa. The Data Protection Registrar has no remit under the lawfulness arm of the first principle, as any processing with respect to the exchange of personal data is made lawful by the Bill. Similarly, the fairness arm of the principle, which requires a data subject to be notified of any non-obvious use and disclosure, is also negated. The new law, as represented by the Bill, overrides it.
      If the use or disclosure of personal data is required by law, it can be used or disclosed "in any event". The "fairly obtained or processed" provision is overridden, which means that any use or disclosure under the legislation can lawfully be kept secret and data subjects need not be informed of it. The fourth principle states:
      "Personal data held for any purpose or purposes shall be adequate, relevant and not excessive in relation to that purpose or those purposes."
      As I said in Committee, any hon. Member who loses his job after the election—many Conservatives will lose theirs—and makes a social security claim can be data-matched for ever under the Bill. That is an excessive provision. As my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) said, clause 1 legitimises the disclosure of personal data, not just about offences relating to social security but
      "for use in checking the accuracy of information relating to benefits, contributions or national insurance numbers or to any other matter relating to social security and (where appropriate) amending or supplementing such information."
      That is a broad provision, and it makes a mockery of the principle that data should not be used excessively.
      The Government have the potential to negate all the data protection principles. In almost all other fields, if the Data Protection Registrar wishes to enforce compliance with the data protection principles, she serves an enforcement notice on data users in the knowledge that failure to comply with it is a criminal offence. However, under section 38(2) of the Data Protection Act, a Government Department cannot be prosecuted. If Departments cannot be prosecuted, enforcement notices cannot be enforced, and serving them is irrelevant. As a result, the Data Protection Registrar is impotent in terms of enforcing the principles.
      That is a worst case scenario, but, as we are dealing with fundamental privacy matters, we need to give the registrar an effective role in correcting abuses. There
      834
      should be a statutory code of practice which brings in the registrar, and it should relate to the data protection principles and privacy considerations. If the DSS decides to act in an underhand way, the registrar could make her views known to Parliament, and it could take account of her warnings. Such a code of practice should hold no fears for the DSS. However, we cannot leave the potential for gross neglect of the data protection principles by the DSS to chance, thereby trampling on the privacy rights of individuals. A statutory code of practice on privacy is necessary.
      Mr. Heald: My hon. Friend the Member for South Dorset (Mr. Bruce) made an excellent point when he said that this country should be proud of the way in which the security of personal data has been protected for many years by Government Departments.
      There are stringent rules governing the way in which the Department records and uses such information. It is available only to officials on a "need-to-know" basis. There are random management checks to ensure that access has been properly authorised, and there is also audit trail analysis. Officials are conscious of the need to hold and process data securely, not least because, each time an official logs on to the system, he is reminded of the fact that every access must be authorised and that unauthorised use is a serious disciplinary offence. Some staff in the Department have been disciplined and some have been dismissed within the past year for breaches of the rules. However, there have been very few breaches, because there have been few instances of officials and staff not following the rules that we have laid down.
      All computer processing is registered under the Data Protection Act 1988, and officials are in regular contact with the Data Protection Registrar. Any unlawful disclosure of information is an offence and, occasionally, prosecutions are pursued. The Department's record on handling personal data by computer is exemplary in terms of security, confidentiality and conformity with data protection principles and other requirements of the Act.
      As the hon. Member for Stratford-on-Avon (Mr. Howarth) said, since July 1995 we have been data matching between different computer systems. That has been carried out by a small team of highly skilled officials working in secure conditions on a single site. Detailed criteria are set, any matched data must be relevant to the benefit, and discrepancy is investigated only where it raises a suspicion of fraud. In the Office of the Data Protection Registrar, the registrar is aware of that service and of the action that is taken to protect data.
      The same rigorous principles of confidentiality and security will be applied to the Bill: only relevant data will be supplied by the Inland Revenue and Customs and Excise, and about emigration, immigration, nationality and prisoners; it will be held in secure conditions by a small number of specially appointed officials; and data that are consistent with data we already hold will not need to be further disclosed within the Department. Moreover, the Department's use of that data will be registered in accordance with the Data Protection Act 1988, and—once they come into force—with the requirements of the European Union data protection directive.
      Like all other data users, local authorities are bound by the requirements of the Act and other legislative requirements to ensure confidentiality and proper

      835
      handling of data. They, too, have a good compliance record. The Office of the Data Protection Registrar has produced guidance for local authorities—which is endorsed by both the DSS and local authority associations and issued to all local authorities—and it will be updated once the Bill receives Royal Assent.
      As drafted, new clause 2 presents the House with a very wide proposal. It would apply to all current processing performed by the Department of Social Security and range across other Departments—not only the DSS—and it would be unsystematic. It would also extend the operation of the Data Protection Act 1988. Any breach of a code of practice would be deemed to be a breach of the data protection principles, even if it were not. Moreover, the Data Protection Registrar's role would be greatly expanded, and she would have to review compliance with the code of practice. That would be unnecessary because, as I have explained, our policy is to co-operate with her. I think that she would agree with that. Her annual reports and those of her predecessors show that it is not the DSS but other data users that cause concern.
      Hon. Members may believe that the Data Protection Registrar should have a right to obtain information from any data user, but that is a general issue to which, no doubt, the House will return when it considers the Government's proposals for the implementation of the EU data protection directive.
      Mr. Alan Howarth: Will the Minister give way on that point?
      Mr. Heald: I think that I am about to deal with the point that the hon. Gentleman wishes to make. Perhaps I can go on, and we can then discover whether his question has been answered.
      Other concerns are specific to the new powers introduced by the Bill. We are in touch with the Data Protection Registrar on the use of personal data within the Department, and she has suggested to us some ideas on additional safeguards which could apply to data matching. Although the Government are unconvinced at the moment by the case for a code of practice—as it would not add any practical measures to safeguard personal data, and risks blurring the clear provisions of the Data Protection Act 1988 and the Secretary of State's accountability to the House for compliance with it—the Government will consider further the points made by hon. Members in this debate and, if she wishes, discuss them further with the Data Protection Registrar; that offer has been made.
      I do not doubt that similar concerns will be raised when the Bill is considered in another place, and there will undoubtedly be further opportunities for debate then. The Government are unconvinced of the case for a code of practice, but will reflect on the points made in this debate.
      I should also mention the point on Liberty's opinion. In framing the Bill, it was of course vital that the proposals complied with the provisions of the European convention on human rights. The issue would be tested only in the context of an individual case being pursued. However, when we were developing the proposals, we considered all the issues of lawfulness and prescribed the law in a very tight and careful manner. We believe that there is no question of there being any breach of our obligations.
      836
      I realise that hon. Members are as concerned as we are to protect the interests of individuals, and I can assure them that the Bill's provisions are not the thin end of any wedge.
      The powers we propose have been framed to allow relevant information to be provided by other Departments to the DSS, and the purposes for doing so have been explained clearly in the Bill. There is no question of curious civil servants being able to trawl through information to investigate friends and neighbours. There are very tight procedures for such activity, and clear measures for discipline and prosecution are available, should it occur. I do not think that it is necessary for me to say more on that issue, unless the hon. Member for Stratford-on-Avon would like to pursue it.
      Mr. Howarth: I am grateful to the Minister.
      Many administrative functions have of course now been contracted out to private sector organisations. I am not sure how confident he can be that the very strict rules, informal code and ethics—which he rightly says he insists on in the Department—will be observed by private sector agencies. As matters now stand, the Data Protection Registrar does not have a power to audit; she can only respond to complaints. Does the Minister really consider that sufficient, considering the scale of the operation?
      Mr. Heald: I think that the package of current safeguards, which I have outlined, are adequate. The hon. Gentleman mentioned the Hedges report. It is worth remembering that one of its key findings was that the public want information to be sufficiently available for the efficient conduct of their own affairs, and for confidentiality not to act as a shield for serious wrongdoing. That is also the Government's view. Having outlined the Government's case on new clause 2, I hope that the hon. Member for Fife, Central (Mr. McLeish) will be prepared to withdraw the motion.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 258, Noes 300.

      Division No. 65]

      [5.45 pm

      AYES

      Adams, Mrs Irene

      Boateng, Paul

      Ainger, Nick

      Bradley, Keith

      Ainsworth, Robert (Cov'try NE)

      Bray, Dr Jeremy

      Allen, Graham

      Brown, Gordon (Dunfermline E)

      Anderson, Donald (Swansea E)

      Brown, Nicholas (Newcastle E)

      Anderson, Ms Janet (Ros'dale)

      Bruce, Malcolm (Gordon)

      Armstrong, Ms Hilary

      Burden, Richard

      Ashdown, Paddy

      Byers, Stephen

      Ashton, Joseph

      Caborn, Richard

      Austin-Walker, John

      Callaghan, Jim

      Banks, Tony (Newham NW)

      Campbell, Mrs Anne (C'bridge)

      Barnes, Harry

      Campbell, Menzies (Fife NE)

      Barron, Kevin

      Campbell, Ronnie (Blyth V)

      Battle, John

      Campbell-Savours, D N

      Bayley, Hugh

      Canavan, Dennis

      Beckett, Mrs Margaret

      Cann, Jamie

      Beggs, Roy

      Chisholm, Malcolm

      Beith, A J

      Clapham, Michael

      Bell, Stuart

      Clarke, Tom (Monklands W)

      Benn, Tony

      Clelland, David

      Bennett, Andrew F

      Clwyd, Mrs Ann

      Bermingham, Gerald

      Coffey, Ms Ann

      Berry, Roger

      Cohen, Harry

      Betts, Clive

      Cook, Frank (Stockton N)

      Blunkett, David

      Cook, Robin (Livingston)

      837

      Corbett, Robin

      Janner, Greville

      Corston, Ms Jean

      Jenkins, Brian D (SE Staffs)

      Cousins, Jim

      Jones, Barry (Alyn & D'side)

      Cox, Tom

      Jones, Ieuan Wyn (Ynys Môn)

      Cummings, John

      Jones, Jon Owen (Cardiff C)

      Cunliffe, Lawrence

      Jones, Dr L (B'ham Selly Oak)

      Cunningham, Jim (Cov'try SE)

      Jones, Martyn (Clwyd SW)

      Cunningham, Dr John

      Jones, Nigel (Cheltenham)

      Dafis, Cynog

      Jowell, Ms Tessa

      Dalyell, Tam

      Kennedy, Charles (Ross C & S)

      Darling, Alistair

      Kennedy, Mrs Jane (Broadgreen)

      Davidson, Ian

      Khabra, Piara S

      Davies, Bryan (Oldham C)

      Kilfoyle, Peter

      Davies, Chris (Littleborough)

      Kirkwood, Archy

      Davies, Denzil (Llanelli)

      Lestor, Miss Joan (Eccles)

      Davis, Terry (B'ham Hodge H)

      Lewis, Terry

      Denham, John

      Liddell, Mrs Helen

      Dewar, Donald

      Litherland, Robert

      Dixon, Don

      Livingstone, Ken

      Donohoe, Brian H

      Lloyd, Tony (Stretf'd)

      Dunwoody, Mrs Gwyneth

      Llwyd, Elfyn

      Eagle, Ms Angela

      Loyden, Eddie

      Eastham, Ken

      McAllion, John

      Ennis, Jeff

      McAvoy, Thomas

      Etherington, Bill

      Macdonald, Calum

      Evans, John (St Helens N)

      McFall, John

      Ewing, Mrs Margaret

      McKelvey, William

      Faulds, Andrew

      Mackinlay, Andrew

      Field, Frank (Birkenhead)

      McLeish, Henry

      Fisher, Mark

      McNamara, Kevin

      Flynn, Paul

      MacShane, Denis

      Forsythe, Clifford (S Antrim)

      Madden, Max

      Foster, Don (Bath)

      Maddock, Mrs Diana

      Foulkes, George

      Mahon, Mrs Alice

      Fraser, John

      Mandelson, Peter

      Fyfe, Mrs Maria

      Marshall, David (Shettleston)

      Galbraith, Sam

      Marshall, Jim (Leicester S)

      Galloway, George

      Martin, Michael J (Springburn)

      Gapes, Mike

      Martlew, Eric

      Garrett, John

      Maxton, John

      George, Bruce

      Meacher, Michael

      Gerrard, Neil

      Meale, Alan

      Gilbert, Dr John

      Michael, Alun

      Godman, Dr Norman A

      Michie, Bill (Shef'ld Heeley)

      Golding, Mrs Llin

      Milburn, Alan

      Gordon, Ms Mildred

      Miller, Andrew

      Graham, Thomas

      Mitchell, Austin (Gt Grimsby)

      Griffiths, Nigel (Edinburgh S)

      Moonie, Dr Lewis

      Griffiths, Win (Bridgend)

      Morgan, Rhodri

      Grocott, Bruce

      Morley, Elliot

      Gunnell, John

      Morris, Ms Estelle (B'ham Yardley)

      Hain, Peter

      Morris, John (Aberavon)

      Hardy, Peter

      Mowlam, Ms Marjorie

      Harman, Ms Harriet

      Mudie, George

      Henderson, Doug

      Mullin, Chris

      Heppell, John

      Murphy, Paul

      Hill, Keith (Streatham)

      Oakes, Gordon

      Hinchliffe, David

      O'Brien, Mike (N Warks)

      Hodge, Ms Margaret

      O'Brien, William (Normanton)

      Hogg, Norman (Cumbernauld)

      O'Hara, Edward

      Home Robertson, John

      Olner, Bill

      Hood, Jimmy

      O'Neill, Martin

      Hoon, Geoffrey

      Orme, Stanley

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

      Pearson, Ian

      Howarth, George (Knowsley N)

      Pendry, Tom

      Howells, Dr Kim

      Pickthall, Colin

      Hoyle, Doug

      Pike, Peter L

      Hughes, Kevin (Doncaster N)

      Pope, Greg

      Hughes, Robert (Ab'd'n N)

      Powell, Sir Raymond (Ogmore)

      Hughes, Roy (Newport E)

      Prentice, Gordon (Pendle)

      Hughes, Simon (Southwark)

      Prescott, John

      Hutton, John

      Primarolo, Ms Dawn

      Illsley, Eric

      Purchase, Ken

      Ingram, Adam

      Quin, Ms Joyce

      Jackson, Ms Glenda (Hampst'd)

      Radice, Giles

      Jamieson, David

      Randall, Stuart

      838

      Raynsford, Nick

      Straw, Jack

      Reid, Dr John

      Sutcliffe, Gerry

      Rendel, David

      Taylor, Matthew (Truro)

      Robertson, George (Hamilton)

      Thompson, Jack (Wansbeck)

      Robinson, Geoffrey (Cov'try NW)

      Thurnham, Peter

      Roche, Mrs Barbara

      Timms, Stephen

      Rogers, Allan

      Tipping, Paddy

      Rooker, Jeff

      Touhig, Don

      Rooney, Terry

      Trickett Jon

      Ross, Ernie (Dundee W)

      Trimble, David

      Rowlands, Ted

      Turner, Dennis

      Ruddock, Ms Joan

      Tyler, Paul

      Sedgemore, Brian

      Vaz, Keith

      Sheerman, Barry

      Walker, Sir Harold

      Sheldon, Robert

      Wallace, James

      Shore, Peter

      Walley, Ms Joan

      Short, Clare

      Wardell, Gareth (Gower)

      Simpson, Alan

      Wareing, Robert N

      Skinner, Dennis

      Watson, Mike

      Smith, Andrew (Oxford E)

      Wigley, Dafydd

      Smith, Chris (Islington S)

      Williams, Alan (Swansea W)

      Smith, Llew (Blaenau Gwent)

      Williams, Alan W (Carmarthen)

      Snape, Peter

      Winnick, David

      Soley, Clive

      Wise, Mrs Audrey

      Spearing, Nigel

      Wray, Jimmy

      Spellar, John

      Wright, Dr Tony

      Squire, Ms R (Dunfermline W)

      Steel, Sir David

      Tellers for the Ayes:

      Steinberg, Gerry

      Mr. Joe Benton and

      Stevenson, George

      Mr. Eric Clarke.

      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

      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)

      Colvin, Michael

      Atkinson, Peter (Hexham)

      Congdon, David

      Baker, Kenneth (Mole V)

      Conway, Derek

      Baldry, Tony

      Coombs, Anthony (Wyre F)

      Banks, Matthew (Southport)

      Coombs, Simon (Swindon)

      Banks, Robert (Harrogate)

      Cope, Sir John

      Bates, Michael

      Cormack, Sir Patrick

      Batiste, Spencer

      Couchman, James

      Bellingham, Henry

      Cran, James

      Bendall, Vivian

      Currie, Mrs Edwina

      Beresford, Sir Paul

      Curry, David

      Biffen, John

      Davies, Quentin (Stamf'd)

      Body, Sir Richard

      Davis, David (Boothferry)

      Bonsor, Sir Nicholas

      Day, Stephen

      Booth, Hartley

      Deva, Nirj Joseph

      Boswell, Tim

      Devlin, Tim

      Bottomley, Peter (Eltham)

      Dicks, Terry

      Bottomley, Mrs Virginia

      Dorrell, Stephen

      Bowden, Sir Andrew

      Douglas-Hamilton, Lord James

      Bowis, John

      Dover, Den

      Boyson, Sir Rhodes

      Duncan, Alan

      Brandreth, Gyles

      Duncan Smith, Iain

      Brazier, Julian

      Dunn, Bob

      Bright, Sir Graham

      Durant, Sir Anthony

      Brooke, Peter

      Dykes, Hugh

      Brown, Michael (Brigg Cl'thorpes)

      Eggar, Tim

      Browning, Mrs Angela

      Elletson, Harold

      Bruce, Ian (S Dorset)

      Emery, Sir Peter

      Budgen, Nicholas

      Evans, David (Welwyn Hatf'ld)

      Burns, Simon

      Evans, Jonathan (Brecon)

      Burt, Alistair

      Evans, Nigel (Ribble V)

      Butler, Peter

      Evans, Roger (Monmouth)

      Butterfill, John

      Evennett, David

      Carlisle, John (Luton N)

      Faber, David

      Carlisle, Sir Kenneth (Linc'n)

      Fabricant, Michael

      839

      Fenner, Dame Peggy

      Lait, Mrs Jacqui

      Field, Barry (Isle of Wight)

      Lamont, Norman

      Fishburn, Dudley

      Lang, Ian

      Forman, Nigel

      Lawrence, Sir Ivan

      Forsyth, Michael (Stirling)

      Legg, Barry

      Forth, Eric

      Leigh, Edward

      Fowler, Sir Norman

      Lennox-Boyd, Sir Mark

      Fox, Dr Liam (Woodspring)

      Lester, Sir Jim (Broxtowe)

      Fox, Sir Marcus (Shipley)

      Lidington, David

      Freeman, Roger

      Lilley, Peter

      French, Douglas

      Lloyd, Sir Peter (Fareham)

      Fry, Sir Peter

      Lord, Michael

      Gale, Roger

      Luff, Peter

      Gallie, Phil

      Lyell, Sir Nicholas

      Gardiner, Sir George

      MacGregor, John

      Garel-Jones, Tristan

      MacKay, Andrew

      Garnier, Edward

      Maclean, David

      Gill, Christopher

      McLoughlin, Patrick

      Gillan, Mrs Cheryl

      Madel, Sir David

      Goodlad, Alastair

      Maitland, Lady Olga

      Goodson-Wickes, Dr Charles

      Malone, Gerald

      Gorman, Mrs Teresa

      Marland, Paul

      Gorst, Sir John

      Marlow, Tony

      Grant, Sir Anthony (SW Cambs)

      Marshall, John (Hendon S)

      Greenway, Harry (Ealing N)

      Marshall, Sir Michael (Arundel)

      Greenway, John (Ryedale)

      Martin, David (Portsmouth S)

      Griffiths, Peter (Portsmouth N)

      Mates, Michael

      Grylls, Sir Michael

      Mellor, David

      Gummer, John

      Merchant, Piers

      Hague, William

      Mitchell, Andrew (Gedling)

      Hamilton, Sir Archibald

      Mitchell, Sir David (NW Hants)

      Hamilton, Neil (Tatton)

      Moate, Sir Roger

      Hampson, Dr Keith

      Monro, Sir Hector

      Hanley, Jeremy

      Montgomery, Sir Fergus

      Hannam, Sir John

      Needham, Richard

      Hargreaves, Andrew

      Nelson, Anthony

      Harris, David

      Neubert, Sir Michael

      Haselhurst, Sir Alan

      Newton, Tony

      Hawkins, Nick

      Nicholls, Patrick

      Hawksley, Warren

      Nicholson, David (Taunton)

      Hayes, Jerry

      Norris, Steve

      Heald, Oliver

      Onslow, Sir Cranley

      Heath, Sir Edward

      Oppenheim, Phillip

      Heathcoat-Amory, David

      Ottaway, Richard

      Hendry, Charles

      Page, Richard

      Hicks, Sir Robert

      Paice, James

      Higgins, Sir Terence

      Patnick, Sir Irvine

      Hogg, Douglas (Grantham)

      Patten, John

      Horam, John

      Pattie, Sir Geoffrey

      Hordern, Sir Peter

      Pawsey, James

      Howard, Michael

      Peacock, Mrs Elizabeth

      Howell, David (Guildf'd)

      Pickles, Eric

      Howell, Sir Ralph (N Norfolk)

      Porter, David

      Hughes, Robert G (Harrow W)

      Portillo, Michael

      Hunt, David (Wirral W)

      Powell, William (Corby)

      Hunt, Sir John (Ravensb'ne)

      Rathbone, Tim

      Hunter, Andrew

      Redwood, John

      Hurd, Douglas

      Renton, Tim

      Jack, Michael

      Richards, Rod

      Jackson, Robert (Wantage)

      Riddick, Graham

      Jenkin, Bernard (Colchester N)

      Rifkind, Malcolm

      Jessel, Toby

      Robathan, Andrew

      Johnson Smith, Sir Geoffrey

      Roberts, Sir Wyn

      Jones, Gwilym (Cardiff N)

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

      Jones, Robert B (W Herts)

      Robinson, Mark (Somerton)

      Jopling, Michael

      Roe, Mrs Marion

      Kellett-Bowman, Dame Elaine

      Rowe, Andrew

      Key, Robert

      Rumbold, Dame Angela

      King, Tom

      Ryder, Richard

      Kirkhope, Timothy

      Sackville, Tom

      Knapman, Roger

      Sainsbury, Sir Timothy

      Knight, Mrs Angela (Erewash)

      Scott, Sir Nicholas

      Knight, Greg (Derby N)

      Shaw, David (Dover)

      Knight, Dame Jill (Edgbaston)

      Shaw, Sir Giles (Pudsey)

      Knox, Sir David

      Shephard, Mrs Gillian

      Kynoch, George

      Shepherd, Richard (Aldridge)

      840

      Shersby, Sir Michael

      Townsend, Sir Cyril (Bexl'yh'th)

      Sims, Sir Roger

      Tracey, Richard

      Skeet, Sir Trevor

      Tredinnick, David

      Smith, Sir Dudley (Warwick)

      Trend, Michael

      Smith, Tim (Beaconsf'ld)

      Trotter, Neville

      Soames, Nicholas

      Twinn, Dr Ian

      Speed, Sir Keith

      Vaughan, Sir Gerard

      Spencer, Sir Derek

      Waldegrave, William

      Spicer, Sir Jim (W Dorset)

      Walden, George

      Spicer, Sir Michael (S Worcs)

      Walker, Bill (N Tayside)

      Spink, Dr Robert

      Waller, Gary

      Spring, Richard

      Ward, John

      Sproat, Iain

      Wardle, Charles (Bexhill)

      Squire, Robin (Hornchurch)

      Waterson, Nigel

      Stanley, Sir John

      Watts, John

      Steen, Anthony

      Wheeler, Sir John

      Stern, Michael

      Whitney, Sir Raymond

      Stewart, Allan

      Whittingdale, John

      Streeter, Gary

      Wiggin, Sir Jerry

      Sumberg, David

      Wilkinson, John

      Sweeney, Walter

      Willetts, David

      Sykes, John

      Wilshire, David

      Tapsell, Sir Peter

      Winterton, Mrs Ann (Congleton)

      Taylor, Ian (Esher)

      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:

      Thornton, Sir Malcolm

      Mr. Bowen Wells and

      Townend, John (Bridlington)

      Mr. Sebastian Coe.

      Question accordingly negatived.

    New clause 3

      SUPPLY OF INFORMATION AND IDENTIFICATION OF ENTITLEMENT TO BENEFIT
      '. Regulations made under this section may prescribe circumstances in which—

      (a) information held by any authority under any provisions of this Act, or any other Act amended by this Act, may be used to identify persons who are entitled to receive benefit, for the purposes of determining that entitlement; and

      (b) information supplied under the provisions of this Act or any other Act amended by this Act for the purposes of ascertaining benefit entitlement may be used by an authority or by the Secretary of State for the purposes of verifying another benefit claim.

      (2) Regulations under this section shall be by statutory instrument, which shall be laid before Parliament in draft and which shall be subject to approval by resolution of each House before being made.'.—[Mr. Denham.]
      Brought up, and read the First time.
      6 pm
      Mr. John Denham: I beg to move, That the clause be read a Second time.
      The new clause reflects the clear principles that Labour consistently advocated in Committee: we must be tough on fraud, tough on cheats and tough on crooked landlords, not only because fraud and theft are wrong, but because each pound taken away in fraud could have been used to help those who are entitled. The welfare system should deliver help only to those who need it, but we must ensure that it does indeed deliver that help.
      Some of the powers in the Bill to tackle benefit fraud could also be used to help to identify and encourage claims from and payments to those who are entitled. The

      841
      Bill rightly contains far-reaching powers, but Labour Members have difficulty understanding the Government's objections to using similar techniques to help people to receive the benefits to which they are entitled. The new clause would do that. It would make clear the ability to pass information from one Department to another and between Departments and local authorities, to help to identify people who have an entitlement to benefit.
      Mrs. Anne Campbell: Will my hon. Friend join me in congratulating my local newspaper, the Cambridge Evening News, on its benefits take-up campaign? Its front-page story on 27 January featured Mr. and Mrs. Gibson, who were able to claim several thousand pounds of entitlement that they had not known about.
      Mr. Denham: I have no hesitation in applauding that initiative in Cambridge and those in many other areas. My local authority's benefits take-up week was responsible for identifying a further £80,000 of unclaimed benefit. I am sure that my hon. Friend will agree that there is a sharp contrast between such local initiatives and the Government's record.
      The new clause would make clear the ability of Departments and local authorities to share information to help to identify people with an entitlement to benefit and, under carefully controlled circumstances set by the Secretary of State, would make some claims for benefit simpler by specifying that information accepted as valid by one agency, perhaps a local authority housing benefit department, could be accepted as valid by, for example, the Benefits Agency, for another benefit.
      It is an historical accident that the welfare system is divided into so many units that do not communicate with one another. If history had been different, this debate might not have been necessary. A seamless, unified benefits system could have been created, capable of delivering a person's entire entitlement in one exercise. We do not have such a system, but there is a case for identifying circumstances in which that would be a desirable way forward. The new clause would help with that.
      We should be clear about the problems that need to be tackled. One million pensioners do not receive the income support to which they are entitled—that figure represents a sharp rise on the previous estimate of 700,000—and go without an average of £14 a week, not for one or two weeks or for one or two months, but year in, year out. They remain in poverty because of their lack of income. We are talking not about missing out for a few weeks, as someone on another benefit might, but about permanent poverty.
      The Government have not bothered to find out who those pensioners are, but we can make an informed guess that they are like other poorer pensioners: they are old, they are alone, they are women and they are widows. We should not ignore their plight. We know that, if they do not get income support, they will not get cold weather payments. One million pensioners in Britain lose out on that entitlement and on the reassurance of help with heating bills. We know what happens: high fuel bills mean that many pensioners do not turn up their heating during periods of intense cold, such as the weather that we had in December and January.
      Mr. Heald: Who brought in the cold weather payments system?
      Mr. Denham: The 1 million pensioners do not benefit from a system that does not work. There were 127 separate events triggering cold weather payments during December and January, but those pensioners did not benefit. This country carries the shame of an extra 30,000 to 50,000 deaths a year because of the cold, but the Government's response is confused, uncaring, ineffective and increasingly mean. What do the Government say when faced with evidence that their income support system is failing 40 per cent. of the people whom it is meant to reach? The Secretary of State said in his Politeia lecture last year:
      "Our policies promise security to the least well-off pensioners."
      They do not—not when they fail 40 per cent. of the poorest pensioners. The Secretary of State says that people do not claim because they choose not to. If that is true, why did the number of people not claiming increase by 300,000 in one year?
      The Under-Secretary is more direct. He told the Standing Committee considering the Bill:
      "we do not know why certain pensioners do not take up income support".—[Official Report, Standing Committee E, 5 December 1996; c. 44.]
      That was honest, but the Government should know. They say that they want people to claim. The Minister told the Committee:
      "We all accept that it is important that pensioners who are entitled to income support should be given every encouragement and all the information that they need to claim it."—[Official Report, Standing Committee E, 5 December 1996; c. 62.]
      The system is failing 40 per cent. of those entitled, and Government spending on publicity is being reduced.
      The Government seem content to see the poorest pensioners in poverty and happy to go on creating the stigma that deters claimants. I do not believe that the problem is simply one of people choosing not to claim. I believe that the stigma puts people off, because income support is seen as charity, not as a right that goes a small way towards returning some of the taxes and national insurance paid over the years.
      The forms are complex, and people are worried about misclaiming inadvertently and being labelled scroungers, or worse. Elderly people are often proud, and have every reason to be, but that does not mean that we should not ensure that they are offered what they are entitled to in the most acceptable and easiest form.
      I commend the role played by Age Concern, Help the Aged and many local councils and voluntary agencies in raising awareness about benefits. They have shown that, with the right approach, information and help, people will claim; but still income support is failing 40 per cent. of the poorest pensioners.
      A different approach is possible. Labour Members have said that we want to move towards a pension entitlement that is simpler to claim, with more access points and presented without the stigma of income support. One valuable tool to help to identify potential beneficiaries would be finding ways of using information that people have already freely given. The new clause would make that possible.
      It is often assumed that pensioners who do not claim income support are outside the system, and that no one knows about them or has any idea who they are. That is not true. A considerable number of those missing out on

      843
      benefits are receiving other benefits, or are in contact with other agencies, such as the local authority social services department.
      Entitlement could be established at a wide variety of predictable trigger points: retirement age; reaching 75 years; reaching 80 years; a spouse going into care or into hospital; care assessment for domiciliary care; a move to sheltered housing; a claim for attendance allowance; a claim for disability living allowance; becoming registered as blind; the death of a spouse; or making an application for housing or council tax benefits. Those trigger points could be brought together to identify and encourage take-up.
      The new clause would allow the development of some parts of such a system. For example, it would allow the passing of information from the Contributions Agency to local authorities and between agencies and the Benefits Agency. It would allow the Secretary of State to set out the circumstances in which that could happen. There are good reasons for that approach, including the proper protection of privacy and the proper protection of public finances. However, it is clear that more could be done for pensioners who claim some benefits but not others.
      Under the new clause, people who receive council tax benefit, for example, could have their entitlement to income support identified. They would be offered the chance to claim, and payment would be made on the simplest possible basis.
      According to what the Minister said in Committee, fewer than half the local authorities are in a position to tell pensioners about possible entitlement to income support. Notification is likely to be vague and unspecific, and the individual will still have to comply with a lengthy claims procedure, possibly duplicating the procedure for claiming council tax or housing benefit.
      The first part of the new clause would enable local authorities to identify a potential claimant and calculate the value of the claim, in many cases using existing information. Only a little additional information might be required. The local authority could follow up the claim or pass it to the Benefits Agency.
      The second part of the new clause would allow the information verification procedures adopted by one benefit-paying body to be accepted for benefit payment, under circumstances set out by the Secretary of State. That would avoid the need for the same information to be assessed by two separate bodies for the same purpose—paying benefit. In practice, that might require a system of local service agreements between the Benefits Agency and the local authority about the information required to calculate benefit.
      Under the new clause, people eligible for one benefit—a pensioner receiving council tax benefit, for example—could have their entitlement to another benefit, such as income support, calculated. They could then be offered payment, which would be triggered simply by their saying yes, which would obviate the need for a further claim.
      The new clause would go a significant way towards assisting the poorest pensioners who are missing out on their entitlement.
      Mr. Robert G. Hughes: New clause 3 has at its heart a simple proposal that sounds attractive. It was mentioned
      844
      by the hon. Members for Peckham (Ms Harman) and for Rochdale (Ms Lynne) on Second Reading. It sounds simple: there would seem to be no reason why the method used to catch people who seek to defraud the system should not be used in the other direction.
      There is an overlap between this debate and the previous one. We should consider what the new clause would mean in practice rather than take it at face value. In practice, it would invade people's privacy in quite some detail.
      Some people may not want to claim benefit, although I accept that some people may be unaware of their entitlement. That is why the Government continue to run a succession of benefit take-up campaigns, some of which have been very successful. Some people, however, might resent the idea that the state was looking at all the details of their private lives and had decided to inform them that they might be entitled to benefit and that they should make a claim; they would resent that intrusion into their private lives.
      Mrs. Anne Campbell: I wonder whether the hon. Gentleman has discussed his concerns with the Data Protection Registrar. It appears from my conversations with her that she would insist on certain safeguards, but she is happy with the principle of data matching for such benign purposes.
      Mr. Hughes: That is extremely good of the Data Protection Registrar. Funnily enough, however, I was not referring to her. Although she may consider it perfectly right to do so under the regulations, she cannot possibly speak on behalf of pensioners and other potential claimants. The hon. Lady has raised an irrelevant point.
      As my hon. Friend the Minister said at the end of the debate on Second Reading—although I missed the first few seconds of the speech by the hon. Member for Southampton, Itchen (Mr. Denham), I do not think that he addressed this point—some people would be identified as potential claimants, but would not be entitled to benefit.
      Mr. Paul Flynn: I am stunned by the hon. Gentleman's line of argument. Can he provide examples of elderly people—or anyone on a tiny disposable income, living in real poverty—having objected because the Government had tried to force money on them?
      Mr. Hughes: I am sure that some people would not object, but others might. Some elderly people are very proud and might object to the state taking an overview of their lives.
      6.15 pm
      Mr. Heald: Does my hon. Friend agree that one category that includes substantial numbers consists of people who live with their families, are supported by them and choose not to claim benefit?
      Mr. Hughes: My hon. Friend is absolutely right. I do not wish to delay the House long, but there are two points to be made about the new clause. First, many pensioners would find its provisions grossly intrusive into their private lives; secondly, the information gleaned might be inaccurate and some people would be informed that they

      845
      were entitled to further benefit when that was not the case. Unless those points can be answered, new clause 3 should not be added to the Bill. I shall certainly oppose it.
      Mr. Chris Davies: In supporting new clause 3, I should like to take up what I understand to be the Government's argument in opposing it, which is simply that it would be impractical and would not achieve their objective. If that is the case—and some Opposition Members believe that the Government's objective is not to increase public expenditure, even to help the most needy in society—why does the Minister not simply look at the wording of the new clause? It is well intentioned, relatively harmless and unlikely to cause any problems if the Minister were to accept it. The possible benefit to be gained is that more than a million pensioners might have the opportunity to secure some of the money to which the House believes them to be entitled.
      I ask the Minister to reject the argument put forward by the hon. Member for Harrow, West (Mr. Hughes) that pensioners are reluctant to accept what is rightfully theirs, and I ask him to recognise that, although the new clause may be flawed and technically it may not be possible to implement it at present, perhaps in a few months or years there may be some advantage to be gained. Even if the advantages are minimal, at least by accepting the new clause the Minister will have swept away the criticisms of Opposition Members who suspect that he may have ulterior motives.
      Mr. Heald: The hon. Member for Littleborough and Saddleworth (Mr. Davies) has made some interesting comments. It is an odd principle that we should simply take a punt on the new clause, whether or not it works. We heard a detailed account of the Opposition's approach from the hon. Member for Southampton, Itchen (Mr. Denham), but my hon. Friend the Member for Harrow, West (Mr. Hughes) really hit the nail on the head when he addressed many of the difficulties in that approach.
      New clause 3 attempts to enable benefit entitlements to be identified, assessed and checked without the involvement of the individual concerned, using information already held or gathered under the provisions of the Bill. Unfortunately, it would not work, and it would take us no further forward. In fact, it would do little more than raise people's hopes when they are not entitled to benefit.
      I explained in Committee the measures that are in place to make the public aware of the benefits that are available. Everyone has the choice whether or not to claim benefit; the important point is that help is there for those who need it. Assessment of entitlement to benefit is a complex procedure and not something that can be achieved without having all the relevant information available; yet by proposing that entitlement should be determined using just the information already held, that is exactly what the new clause would result in.
      In respect of information in Inland Revenue and Customs and Excise records, data matching would be ineffective from a benefit take-up perspective. The Inland Revenue holds information only about taxpayers and those claiming repayments of tax; it does not hold information about non-taxable income counted for benefit purposes such as income from premium bonds, tax-
      846
      exempt special savings accounts and national savings certificates or earnings from part-time employment. Similarly, Customs and Excise holds information relating only to people and businesses registered for VAT, but not those with turnovers below the VAT threshold. Other details, such as information about non-dependants and other household members, are also relevant for benefit entitlement purposes but cannot be obtained from the Inland Revenue, Customs and Excise or any Government Department.
      Mrs. Anne Campbell rose—
      Mr. Heald: That brings me to the subject of local government, about which the hon. Lady may wish to ask me.
      Our guidance to local authorities encourages them to take action to make all claimants who appear to have a potential entitlement to income support aware that help may be available to them from the Benefits Agency. Many local authorities have software available to automate that. With regard to income support records, a service level agreement between the Benefits Agency and local authorities allows for information to be exchanged, and that will continue. Income support claim forms contain a form inviting the income support claimant to claim housing benefit and/or council tax benefit.
      Mrs. Campbell: Does the Minister agree that many pensioners who claim council tax benefit are entitled to income support but do not claim it even though they have been told by their local authority that they may be entitled to it? His proposals do not deal with that. That is precisely what my hon. Friend the Member for Southampton, Itchen (Mr. Denham) is trying to overcome.
      Mr. Heald: I recognise the hon. Lady's concern, but the difficulty is that, although it is quite right to make all pensioners and individuals who are entitled to benefit aware of their entitlements—and such help is quite properly available—it is for the individual to decide whether they wish to claim benefit.
      The Government's view is that to undertake a means-testing exercise behind people's backs and without their permission, which would also not be accurate, is the wrong way forward. Making pensioners aware, through information made available by the Government through leafleting, sending information to various information points, visiting pensioner groups and co-ordinating the sort of pensioner awareness campaign that has recently been running in conjunction with Help the Aged and other elderly people's groups is the better way forward.
      With regard to income support rules, if the income support claimant does not indicate that he or she wishes to claim housing benefit or council tax benefit and does not complete the claim form that we issue, I do not believe that it is right for him or her to be pursued or for us to insist that they make a claim. This is a free country, as the hon. Member for Cambridge (Mrs. Campbell) said in a different context, and we must accept that there may be reasons why individuals genuinely do not want to claim.
      Mr. Flynn: What reasons?
      Mr. Heald: I think that I gave an example earlier.
      Mr. Flynn: It is ludicrous to say—and no evidence of it has been given—that pensioners are not claiming benefits because they do not want the money. It would be extraordinary if that were so. We know that the reason is that they are ignorant of available allowances. The awareness campaign would impress us a great deal more if the Government had not recently made cuts in the telephone hotline service—the main service that told people what was available.
      Mr. Heald: I totally disagree with the hon. Gentleman about the purpose of closing the general advice line. It was closed because numerous people were ringing to ask about their personal circumstances and were having to be told that they would have to get in touch with their local office if they wanted anything to be done. We are localising the service. Why bother having an intermediate step when individuals can ring their local office where trained staff are able to answer their inquiries? The hon. Gentleman says that we all know that individuals do not claim because they do not know about the rules, but we do not know that that is so. What we know is that a significant number of people do not claim, and I believe that there may be a variety of reasons for that.
      The Government believe that it is a better use of resources to ensure that information about benefit entitlement is freely available in the public domain, and that is what we do. The Department and its agencies take extensive action to publicise the wide range of benefits that are available. It is a clear measure of success that in 1994–95—the most recent year recorded—£9 out of every £10 of available benefit was claimed.
      The state retirement pension order book contains notes explaining details of other benefits, including income support and housing benefit. People whose benefits are paid directly into their bank or building society by automated credit transfer receive annual copies of the notes. Information about social security benefits and the conditions of entitlement to them is widely available to the public from Benefits Agency offices, local authorities, welfare rights organisations and other places such as doctors' surgeries. In addition, leaflets explaining benefit rules are available in post offices and libraries throughout the country.
      There will always be some people who choose not to claim. That is their right. For those who wish to claim, information and advice about benefits to which they might be entitled is readily available. In those circumstances, I ask the House to reject the new clause.
      Mr. Denham: The Minister has failed to rise to the scale of the problem: 1 million pensioners—one in 10 of all pensioners, and the poorest pensioners in this country—are going without the benefit to which they are entitled; 40 per cent. of people who are meant to be helped by income support are not receiving it; and the number of pensioners who chose not to claim in one year increased by 300,000.
      The Minister says that that is simply because people do not want to receive assistance—a contention for which he has put forward no evidence whatever. If the Government were genuinely concerned about the problem, the very
      848
      least that they would have done would be to conduct some research to try to justify their claim. In the absence of such a claim, I prefer to believe that, although some people may not want to claim, the great majority do not do so because of the stigma, the complexity and the difficulty of understanding the system and making a claim.
      Every one of the objections that Conservative Members have raised can be dealt with. If the Secretary of State were convinced that there would be serious objections—albeit from a minority of pensioners—to information that was freely given for one benefit being assessed for another, there is no reason why, under new clause 3, the Secretary of State could not simply include on the claim forms a box to enable people to refuse to allow information to be used for any other purpose. I suspect, however, that very few people would exercise that option. That point entirely meets the objection raised by the hon. Member for Harrow, West (Mr. Hughes).
      The second objection raised was that information would not be accurate. Anybody who knows the structure of the benefits system is aware that information that has been accepted as accurate for, say, housing benefit or council tax benefit is precisely the same information that is needed to calculate income support. Either the Minister and the hon. Member for Harrow, West are suggesting that there is something fundamentally wrong with the information being used for the payment of benefits, or that objection, too, is a red herring.
      Fundamental to the issue is the difference in message that would go out if it appeared that the system worked to the benefit of the individual who needed assistance. It should be made clear that such help is not charity or a state handout, but an entitlement, and every part of the system should make every effort to ensure that those who need support receive it because the support received has been paid for many times over during people's working lives. At present, the Government seem prepared to allow an entire set of wholly unnecessary obstacles to lie in the path of an efficient and effective system. For those reasons, I hope that the House will support new clause 3.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 245, Noes 297.

      Division No. 66]

      [6.29 pm

      AYES

      Abbott, Ms Diane

      Benton, Joe

      Adams, Mrs Irene

      Bermingham, Gerald

      Ainger, Nick

      Berry, Roger

      Ainsworth, Robert (Cav'try NE)

      Blunkett, David

      Allen, Graham

      Boateng, Paul

      Anderson, Donald (Swansea E)

      Bradley, Keith

      Anderson, Ms Janet (Ros'dale)

      Brown, Nicholas (Newcastle E)

      Armstrong, Ms Hilary

      Bruce, Malcolm (Gordon)

      Ashdown, Paddy

      Burden, Richard

      Ashton, Joseph

      Byers, Stephen

      Austin-Walker, John

      Caborn, Richard

      Banks, Tony (Newham NW)

      Callaghan, Jim

      Barnes, Harry

      Campbell, Mrs Anne (C'bridge)

      Barron, Kevin

      Campbell, Menzies (Fife NE)

      Battle, John

      Campbell, Ronnie (Blyth V)

      Bayley, Hugh

      Campbell-Savours, D N

      Beckett, Mrs Margaret

      Caravan, Dennis

      Beith, A J

      Cann, Jamie

      Bell, Stuart

      Chidgey, David

      Benn, Tony

      Chisholm, Malcolm

      Bennett, Andrew F

      Clapham, Michael

      849

      Clarke, Eric (Midlothian)

      Hutton, John

      Clelland, David

      Illsley, Eric

      Clwyd, Mrs Ann

      Ingram, Adam

      Coffey, Ms Ann

      Jackson, Ms Glenda (Hampst'd)

      Cohen, Harry

      Jamieson, David

      Cook, Frank (Stockton N)

      Janner, Greville

      Corbett, Robin

      Jenkins, Brian D (SE Staffs)

      Corston, Ms Jean

      Jones, Barry (Alyn & D'side)

      Cousins, Jim

      Jones, Ieuan Wyn (Ynys Môn)

      Cox, Tom

      Jones, Dr L (B'ham Selly Oak)

      Cummings, John

      Jones, Martyn (Clwyd SW)

      Cunliffe, Lawrence

      Jones, Nigel (Cheltenham)

      Cunningham, Jim (Cov'try SE)

      Jowell, Ms Tessa

      Dafis, Cynog

      Kennedy, Charles (Ross C & S)

      Dalyell, Tam

      Kennedy, Mrs Jane (Broadgreen)

      Darling, Alistair

      Khabra, Piara S

      Davidson, Ian

      Kilfoyle, Peter

      Davies, Bryan (Oldham C)

      Kirkwood, Archy

      Davies, Chris (Littleborough)

      Lestor, Miss Joan (Eccles)

      Davies, Denzil (Llanelli)

      Lewis, Terry

      Davies, Ron (Caerphilly)

      Liddell, Mrs Helen

      Davis, Terry (B'ham Hodge H)

      Litherland, Robert

      Denham, John

      Livingstone, Ken

      Dewar, Donald

      Lloyd, Tony (Stretf'd)

      Dixon, Don

      Llwyd, Elfyn

      Donohoe, Brian H

      Loyden, Eddie

      Dunwoody, Mrs Gwyneth

      McAllion, John

      Eagle, Ms Angela

      McAvoy, Thomas

      Eastham, Ken

      Macdonald, Calum

      Ennis, Jeff

      McFall, John

      Etherington, Bill

      McKelvey, William

      Evans, John (St Helens N)

      Mackinlay, Andrew

      Ewing, Mrs Margaret

      McLeish, Henry

      Faulds, Andrew

      McNamara, Kevin

      Field, Frank (Birkenhead)

      MacShane, Denis

      Fisher, Mark

      Madden, Max

      Flynn, Paul

      Maddock, Mrs Diana

      Foster, Don (Bath)

      Mahon, Mrs Alice

      Foulkes, George

      Marshall, David (Shettleston)

      Fraser, John

      Marshall, Jim (Leicester S)

      Fyfe, Mrs Maria

      Martin, Michael J (Springburn)

      Galbraith, Sam

      Martlew, Eric

      Galloway, George

      Maxton, John

      Gapes, Mike

      Meacher, Michael

      Garrett, John

      Meale, Alan

      George, Bruce

      Michael, Alun

      Gerrard, Neil

      Michie, Bill (Shef'ld Heeley)

      Gilbert, Dr John

      Michie, Mrs Ray (Argyll Bute)

      Godman, Dr Norman A

      Milburn, Alan

      Golding, Mrs Llin

      Miller, Andrew

      Gordon, Ms Mildred

      Mitchell, Austin (Gt Grimsby)

      Graham, Thomas

      Moonie, Dr Lewis

      Grant, Bernie (Tottenham)

      Morgan, Rhodri

      Griffiths, Nigel (Edinburgh S)

      Morley, Elliot

      Griffiths, Win (Bridgend)

      Morris, Ms Estelle (B'ham Yardley)

      Grocott, Bruce

      Morris, John (Aberavon)

      Gunnell, John

      Mowlam, Ms Marjorie

      Hardy, Peter

      Mudie, George

      Harman, Ms Harriet

      Mullin, Chris

      Henderson, Doug

      Murphy, Paul

      Heppell, John

      O'Brien, Mike (N Warks)

      Hill, Keith (Streatham)

      O'Brien, William (Normanton)

      Hinchliffe, David

      O'Hara, Edward

      Hodge, Ms Margaret

      Olner, Bill

      Hogg, Norman (Cumbernauld)

      O'Neill, Martin

      Home Robertson, John

      Orme, Stanley

      Hood, Jimmy

      Pearson, Ian

      Hoon, Geoffrey

      Pendry, Tom

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

      Pickthall, Colin

      Howarth, George (Knowsley N)

      Pike, Peter L

      Howells, Dr Kim

      Prentice, Gordon (Pendle)

      Hoyle, Doug

      Prescott, John

      Hughes, Kevin (Doncaster N)

      Primarolo, Ms Dawn

      Hughes, Robert (Ab'd'n N)

      Purchase, Ken

      Hughes, Roy (Newport E)

      Quin, Ms Joyce

      Hughes, Simon (Southwark)

      Randall, Stuart

      850

      Raynsford, Nick

      Steinberg, Gerry

      Reid, Dr John

      Stevenson, George

      Rendel, David

      Straw, Jack

      Robertson, George (Hamilton)

      Sutcliffe, Gerry

      Robinson, Geoffrey (Cov'try NW)

      Taylor, Matthew (Truro)

      Roche, Mrs Barbara

      Thompson, Jack (Wansbeck)

      Rogers, Allan

      Thurnham, Peter

      Rooker, Jeff

      Timms, Stephen

      Rooney, Terry

      Tipping, Paddy

      Ross, Ernie (Dundee W)

      Touhig, Don

      Rowlands, Ted

      Trickett, Jon

      Ruddock, Ms Joan

      Turner, Dennis

      Sedgemore, Brian

      Vaz, Keith

      Sheerman, Barry

      Walker, Sir Harold

      Sheldon, Robert

      Wallace, James

      Walley, Ms Joan

      Shore, Peter

      Wardell, Gareth (Gower)

      Short, Clare

      Watson, Mike

      Simpson, Alan

      Williams, Alan (Swansea W)

      Skinner, Dennis

      Williams, Alan W (Carmarthen)

      Smith, Andrew (Oxford E)

      Winnick, David

      Smith, Chris (Islington S)

      Wise, Mrs Audrey

      Smith, Llew (Blaenau Gwent)

      Wray, Jimmy

      Snape, Peter

      Wright, Dr Tony

      Soley, Clive

      Spearing, Nigel

      Tellers for the Ayes:

      Spellar, John

      Mr. Jon Owen Jones and

      Steel, Sir David

      Mr. Clive Betts.

      NOES

      Ainsworth, Peter (E Surrey)

      Cash, William

      Aitken, Jonathan

      Channon, Paul

      Alexander, Richard

      Chapman, Sir Sydney

      Alison, Michael (Selby)

      Clappison, James

      Allason, Rupert (Torbay)

      Clark, Dr Michael (Rochf'd)

      Amess, David

      Clarke, Kenneth (Rushcliffe)

      Arbuthnot, James

      Clifton-Brown, Geoffrey

      Arnold, Jacques (Gravesham)

      Colvin, Michael

      Ashby, David

      Congdon, David

      Atkinson, David (Bour'mth E)

      Conway, Derek

      Atkinson, Peter (Hexham)

      Coombs, Anthony (Wyre F)

      Baker, Kenneth (Mole V)

      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

      Curry, David

      Beggs, Roy

      Davies, Quentin (Stamf'd)

      Bellingham, Henry

      Davis, David (Boothferry)

      Bendall, Vivian

      Day, Stephen

      Beresford, Sir Paul

      Deva, Nirj Joseph

      Biffen, John

      Devlin, Tim

      Body, Sir Richard

      Dicks, Terry

      Bonsor, Sir Nicholas

      Dorrell, Stephen

      Booth, Hartley

      Douglas-Hamilton, Lord James

      Boswell, Tim

      Dover, Den

      Bottomley, Peter (Eltham)

      Duncan, Alan

      Bottomley, Mrs Virginia

      Duncan Smith, Iain

      Bowden, Sir Andrew

      Dunn, Bob

      Bowis, John

      Durant, Sir Anthony

      Boyson, Sir Rhodes

      Dykes, Hugh

      Brandreth, Gyles

      Eggar, Tim

      Brazier, Julian

      Elletson, Harold

      Bright, Sir Graham

      Emery, Sir Peter

      Brooke, Peter

      Evans, David (Welwyn Hatf'ld)

      Brown, Michael (Brigg Cl'thorpes)

      Evans, Jonathan (Brecon)

      Browning, Mrs Angela

      Evans, Nigel (Ribble V)

      Bruce, Ian (S Dorset)

      Evans, Roger (Monmouth)

      Budgen, Nicholas

      Evennett, David

      Burns, Simon

      Faber, David

      Burt, Alistair

      Fabricant, Michael

      Butler, Peter

      Fenner, Dame Peggy

      Butterfill, John

      Field, Barry (Isle of Wight)

      Carlisle, John (Luton N)

      Fishburn, Dudley

      Carrington, Matthew

      Forman, Nigel

      Carttiss, Michael

      Forsyth, Michael (Stirling)

      851

      Forsythe, Clifford (S Antrim)

      Lennox-Boyd, Sir Mark

      Forth, Eric

      Lester, Sir Jim (Broxtowe)

      Fowler, Sir Norman

      Lidington, David

      Fox, Dr Liam (Woodspring)

      Lilley, Peter

      Fox, Sir Marcus (Shipley)

      Lloyd, Sir Peter (Fareham)

      Freeman, Roger

      Lord, Michael

      French, Douglas

      Luff, Peter

      Fry, Sir Peter

      Lyell, Sir Nicholas

      Gale, Roger

      MacGregor, John

      Gallie, Phil

      MacKay, Andrew

      Gardiner, Sir George

      Maclean, David

      Garel-Jones, Tristan

      McLoughlin, Patrick

      Garnier, Edward

      Madel, Sir David

      Gill, Christopher

      Maitland, Lady Olga

      Gillan, Mrs Cheryl

      Malone, Gerald

      Goodlad, Alastair

      Mans, Keith

      Goodson-Wickes, Dr Charles

      Marland, Paul

      Gorman, Mrs Teresa

      Marlow, Tony

      Gorst Sir John

      Marshall, John (Hendon S)

      Grant, Sir Anthony (SW Cambs)

      Marshall, Sir Michael (Arundel)

      Greenway, Harry (Ealing N)

      Martin, David (Portsmouth S)

      Greenway, John (Ryedale)

      Mates, Michael

      Griffiths, Peter (Portsmouth N)

      Mellor, David

      Grylls, Sir Michael

      Merchant, Piers

      Gummer, John

      Mitchell, Andrew (Gedling)

      Hague, William

      Mitchell, Sir David (NW Hants)

      Hamilton, Sir Archibald

      Moate, Sir Roger

      Hamilton, Neil (Tatton)

      Monro, Sir Hector

      Hampson, Dr Keith

      Montgomery, Sir Fergus

      Hanley, Jeremy

      Needham, Richard

      Hannam, Sir John

      Nelson, Anthony

      Hargreaves, Andrew

      Neubert, Sir Michael

      Harris, David

      Newton, Tony

      Haselhurst Sir Alan

      Nicholls, Patrick

      Hawkins, Nick

      Nicholson, David (Taunton)

      Hawksley, Warren

      Norris, Steve

      Hayes, Jerry

      Onslow, Sir Cranley

      Heald, Oliver

      Oppenheim, Phillip

      Heath, Sir Edward

      Ottaway, Richard

      Hendry, Charles

      Page, Richard

      Hicks, Sir Robert

      Paice, James

      Higgins, Sir Terence

      Patnick, Sir Irvine

      Hogg, Douglas (Grantham)

      Patten, John

      Horam, John

      Pattie, Sir Geoffrey

      Hordern, Sir Peter

      Pawsey, James

      Howard, Michael

      Peacock, Mrs Elizabeth

      Howell, David (Guildf'd)

      Pickles, Eric

      Hughes, Robert G (Harrow W)

      Porter, David

      Hunt, David (Wirral W)

      Powell, William (Corby)

      Hunt, Sir John (Ravensb'ne)

      Rathbone, Tim

      Hunter, Andrew

      Redwood, John

      Hurd, Douglas

      Renton, Tim

      Jack, Michael

      Richards, Rod

      Jackson, Robert (Wantage)

      Riddick, Graham

      Jenkin, Bernard (Colchester N)

      Robathan, Andrew

      Jessel, Toby

      Roberts, Sir Wyn

      Johnson Smith, Sir Geoffrey

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

      Jones, Gwilym (Cardiff N)

      Robinson, Mark (Somerton)

      Jones, Robert B (W Herts)

      Roe, Mrs Marion

      Jopling, Michael

      Rowe, Andrew

      Kellett-Bowman, Dame Elaine

      Rumbold, Dame Angela

      Key, Robert

      Ryder, Richard

      King, Tom

      Sackville, Tom

      Kirkhope, Timothy

      Sainsbury, Sir Timothy

      Knapman, Roger

      Scott, Sir Nicholas

      Knight, Mrs Angela (Erewash)

      Shaw, David (Dover)

      Knight, Greg (Derby N)

      Shaw, Sir Giles (Pudsey)

      Knight, Dame Jill (Edgbaston)

      Shephard, Mrs Gillian

      Knox, Sir David

      Shepherd, Richard (Aldridge)

      Kynoch, George

      Shersby, Sir Michael

      Lait, Mrs Jacqui

      Sims, Sir Roger

      Lamont, Norman

      Skeet, Sir Trevor

      Lang, Ian

      Smith, Sir Dudley (Warwick)

      Lawrence, Sir Ivan

      Smith, Tim (Beaconsf'ld)

      Legg, Barry

      Soames, Nicholas

      Leigh, Edward

      Speed, Sir Keith

      852

      Spencer, Sir Derek

      Trimble, David

      Spicer, Sir Jim (W Dorset)

      Trotter, Neville

      Spicer, Sir Michael (S Worcs)

      Twinn, Dr Ian

      Spink, Dr Robert

      Vaughan, Sir Gerard

      Spring, Richard

      Waldegrave, William

      Sproat, Iain

      Walden, George

      Squire, Robin (Hornchurch)

      Walker, Bill (N Tayside)

      Stanley, Sir John

      Waller, Gary

      Stern, Michael

      Ward, John

      Stewart, Allan

      Wardle, Charles (Bexhill)

      Streeter, Gary

      Waterson, Nigel

      Sumberg, David

      Watts, John

      Sweeney, Walter

      Whitney, Sir Raymond

      Whittingdale, John

      Sykes, John

      Widdecombe, Miss Ann

      Tapsell, Sir Peter

      Wiggin, Sir Jerry

      Taylor, Ian (Esher)

      Wilkinson, John

      Taylor, John M (Solihull)

      Willetts, David

      Taylor, Sir Teddy

      Wilshire, David

      Temple-Morris, Peter

      Winterton, Mrs Ann (Congleton)

      Thomason, Roy

      Winterton, Nicholas (Macclesf'ld)

      Thompson, Sir Donald (Calder V)

      Wolfson, Mark

      Thompson, Patrick (Norwich N)

      Wood, Timothy

      Thornton, Sir Malcolm

      Yeo, Tim

      Townend, John (Bridlington)

      Young, Sir George

      Townsend, Sir Cyril (Bexl'yh'th)

      Tracey, Richard

      Tellers for the Noes:

      Tredinnick, David

      Mr. Bowen Wells and

      Trend, Michael

      Mr. Sebastian Coe.

      Question accordingly negatived.

    Clause 8

      DIRECTIONS BY SECRETARY OF STATE
      Amendments made: No. 1, in page 14, line 24, after 'Act;' insert—
      '(bb) a copy of a report relating to the administration of benefit has been sent to a local authority under section 102(2) of the Local Government (Scotland) Act 1973 and to the Secretary of State and section 103(1) of that Act has been complied with;'.
      No. 2, in page 14, line 26, leave out 'that Act' and insert
      'the Local Government Finance Act 1982'.
      No. 3, in page 14, line 46, leave out 'achieve' and insert 'attain'.—[Mr. Heald.]

    Clause 11
      INFORMATION FROM LANDLORDS AND AGENTS
      Amendment made: No. 4, in page 18, line 28, after '(1)' insert 'Regulations shall provide that'.—[Mr. Heald.]
    Clause 13

      OFFENCE OF DISHONEST REPRESENTATION FOR OBTAINING BENEFIT
      Amendments made: No. 5, in page 21, leave out line 46.
      No. 6, in page 22, line 1, leave out from 'notify' to 'to' in line 3 and insert—
      'a change of circumstances which regulations under this Act require him to notify; or
      (d) causes or allows another person to fail to notify a change of circumstances which such regulations require the other person'.—[Mr. Heald.]

    Clause 14

      EXTENSION OF OFFENCE OF FALSE REPRESENTATION FOR OBTAINING BENEFIT
      Amendment made: No. 7, in page 22, line 26, leave out from 'notify' to 'he' in line 30 and insert—
      'a change of circumstances which regulations under this Act require him to notify; or
      (b) knowingly causes or knowingly allows another person to fail to notify a change of circumstances which such regulations require the other person to notify,
      and he knows that he, or the other person, is required to notify the change of circumstances,'.—[Mr. Heald.]
      Order for Third Reading read.
      Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Knapman.]
      Mr. Deputy Speaker (Sir Geoffrey Lofthouse): I call Mr. McLeish.
      Mr. McLeish: I think that there are two other Opposition contributions to be made before I speak, Mr. Deputy Speaker.
      6.43 pm
      Mr. Clifford Forsythe: I have no wish to detain the House, but I would like to make a few comments. I welcome the Bill again, as I welcomed it on Second Reading, and I support its implementation. However, I am very disappointed that new clause 2, covering the code of practice on privacy, was not accepted, because of the implications for Northern Ireland.
      I am sorry that the Minister felt that he had not enough time to take an intervention, because that part of the Bill is most important to Northern Ireland and the security situation there. I wish to put on record the fact that the implementation of the Bill will go through the House by negative resolution, by Order in Council, so, unfortunately, we shall not have the opportunity to discuss the impact of those aspects on Northern Ireland.
      I am unhappy that it was not found possible to include Northern Ireland on the face of the Bill, so that such matters could have been fully discussed and investigated in the context of the legislation. I am the social security spokesman for my party, yet I have found great difficulty in getting information about the system for dealing with social security fraud in Northern Ireland. I am unhappy about that, too.
      Until we see the order, which cannot be debated but will go through the House by negative resolution, I shall not know how the system will work. I have not had an explanation. I do not know whether the provisions will be implemented by the Department or by the Benefits Agency, and I do not know how the Housing Executive will fit into the whole scheme.
      The fraud situation in Northern Ireland is unique, because we have the only land frontier in the United Kingdom. That in itself creates problems. Other aspects of the situation in Northern Ireland mean that, in some areas, it will not be possible to implement all of what is in the Bill.
      It is unfortunate that the implementation of the Bill's provisions in Northern Ireland will go through the House by negative resolution, because there will be no debate,
      854
      and we shall not be able to consider the details of how things will be done, or whether we should change anything. That is a great tragedy for democracy in this great House.
      That is why I wanted to make a final contribution on the Bill. Those who organise such things—the usual channels—may consider such matters a suitable subject to be brought before the Northern Ireland Grand Committee before the order appears. I have given the Bill a warm welcome, but I am unhappy and uneasy about the way in which its provisions will be implemented in my part of the United Kingdom.
      6.47 pm
      Mr. Chris Davies: On Second Reading, my hon. Friend the Member for Rochdale (Ms Lynne), the Liberal Democrat social security spokesman, gave the Bill a cautious welcome. She expressed some reservations about details, but said that, overall, it was necessary and welcome. At this late stage in the process, I echo those sentiments.
      Of course there are faults in the welfare system as a whole. The hon. Member for Birkenhead (Mr. Field), perhaps better than anyone else, has pointed out the way in which the welfare system traps people in dependency, and all too often prevents them from rising out of it.
      None the less, unless other widespread changes are made, the Bill is still essential in its present form. It makes no difference what party is in power; it is the task of the Government of the day to ensure that fraud is stamped out, because there can be no place in our system for cheats—for people who rob the taxpayer. They create a climate of hostility among the public, and that leads to political pressures being applied, which ultimately mean that those in the greatest need are denied some of the help that is really necessary.
      6.49 pm
      Mr. McLeish: It is a pity that the Government have seen their anti-fraud strategy start to unravel during our final discussion on the Bill. The whole House is tough on fraud, and there is no point in trying to defend individuals or landlords—or organisations of both—who try to defraud the taxpayer. In doing so, they create a climate in which many people are accused of scrounging. That is a travesty, and that is why we must continue to be tough on fraud. Certainly the next Labour Government will continue to be tough on fraud.
      We could have gone further, of course, and the Government failed three tests. First, we asked the Government to consider introducing a register—or a code of conduct or practice—to ensure that civil liberties are protected as the Government embark on a wide-ranging extension of data matching within both local and central Government. But the Government could not bring themselves to accept our new clause, and I am still dismayed by that.
      The second test concerned the question of the specific landlords offence. In Committee, we heard that the Bill would deal with claimants and landlords who indulge in fraud, but that is simply not good enough. It is quite clear that, in view of the scale of the fraud in which landlords are involved and the volume of taxpayers' money being defrauded, we need a specific offence of landlord fraud. That would have sent a powerful message from this House

      855
      that landlord cheats would be identified and dealt with in the toughest way possible. The Government failed that test, also.
      The third test was the opportunity to use a Bill aimed at improving the administration of social security to tackle the problem of people who are entitled to benefits but do not take them up. If it was not so serious, the response of the Government to the matter would be laughable. They said that an attempt by the state to help people to get the benefits to which they are entitled would be invading the privacy of individuals. "Ludicrous" does not start to sum up that response.
      We then heard that those people did not want to claim benefits, but we should put that to the test. I believe that many of them would want to claim. We also heard that they would resent the state forcing them to take up their entitlements. This is Third Reading—the conclusion of our discussions on the Bill. We could have introduced a common-sense measure to try to help people who need income but do not get it, and the data matching in the Bill could have been of immense help.
      We have lost an opportunity this evening, and I hope that some of these matters may be discussed in another place. I also hope that the Minister will tell us why the Government have refused to strengthen a measure which started by aiming to tackle fraud in a tough way. We should be tough on fraud, and our only disappointment is that the Government have not gone further. They should have sent a powerful message to everyone that not only do we talk tough on fraud, but we implement legislation that hits hard—especially landlord cheats.
      6.53 pm
      Mr. Heald: The Third Reading debate presents me with the opportunity to thank the Committee for the care that it has taken in discussing the Government's proposals. The Bill received a thorough scrutiny during the 11 sittings of the Committee, but, throughout, business has been conducted in a constructive and professional manner.
      I would like to thank the two Chairmen—my hon. Friend the Member for Southampton, Test (Sir J. Hill), and the hon. Member for Blaydon (Mr. McWilliam)—for their guidance, their forbearance and their wisdom. I should also like to thank Opposition Members for their constructive contributions, especially the hon. Members for Fife, Central (Mr. McLeish) and for Southampton, Itchen (Mr. Denham). Each member of the Committee in his own way made a positive contribution.
      Above all, I should like to thank the Minister for Social Security and Disabled People, my hon. Friend the Member for Bury, North (Mr. Burt), who was my partner in taking the Bill through. He is that political rarity, a man who commands equal respect from both sides of the House. His good sense and plain humanity have helped the progress of this Bill in equal measure.
      The Bill proposes a number of measures designed to reduce the opportunity for the fraudulent claiming and payment of social security benefits, and a number of other measures to improve the security, control and accuracy of social security administration.
      The hon. Member for South Antrim (Mr. Forsythe) played a distinguished part in Committee and raised the issues that affected Northern Ireland, and I pay tribute to
      856
      him for that. He raised two points on Third Reading. First, he referred to security and the importance that should be attached to data security in Northern Ireland. The principles of data security that I outlined earlier apply to Northern Ireland in exactly the same way as to the rest of the UK.
      The Social Security Agency in Northern Ireland takes security and confidentiality very seriously. The hon. Member for South Antrim will be aware of the moves to mirror some of the developments on benefit fraud investigation and security in Northern Ireland, and I am sure that he will welcome those measures. As someone who knows about this matter intimately, he will know that the agency does a good job, often in very difficult circumstances. We should all pay tribute to it.
      Secondly, the hon. Member for South Antrim referred to amending the legislation for Northern Ireland by Order in Council. We discussed this matter in Committee, as he will remember. When Northern Ireland legislation follows Great Britain legislation and the Bill provides for that—as this Bill does—the convention is to proceed without amendment, but other issues which may arise in Northern Ireland were discussed in Committee. The hon. Member said that he had tried to intervene earlier, but that I had not given way. I hope that he accepts that it is most unusual for me to do that, and I apologise.
      The main provisions of the Bill are: to enable certain other Government Departments to supply relevant information to the Department of Social Security for the purposes of preventing and detecting social security fraud and for checking the accuracy of social security information; to enable the Department to share information with local authorities, and for authorities to share information with each other; to enhance and improve the range of penalties available against those who abuse the system; and to give the Secretary of State the power to inspect local authority performance, make directions as to the standards that are to be achieved and, in the event of the directions being ignored, to reduce subsidy.
      The hon. Member for Fife, Central asked whether enough is being done about landlord fraud. My right hon. Friend the Secretary of State's 10-point plan—which I outlined earlier—will lacerate landlord fraud, and will put paid to the abuses to which the hon. Gentleman referred. More importantly, we should perhaps ask why it would be sensible—in circumstances where different kinds of individuals and organised criminals commit serious fraud—to single out landlords when the level of criminality can be just as serious with another kind of offender.
      The Opposition's thoughts on the matter—particularly in circumstances where there is no evidence that landlords are committing the bulk of the fraud—result from their views on landlords. My hon. Friend the Member for South Dorset (Mr. Bruce) made the point that there is a demonology of the left, in which a landlord who commits an offence—whatever the level of criminality or the comparisons that can be made—should somehow warrant a 12-year sentence, when everybody else committing the same offence with the same level of criminality should receive a six-year sentence. I do not understand that, and nor does the rest of the House.
      Mr. Alan Howarth: By the same token, is there not a demonology of the right as far as disabled people are concerned? Why are two clauses in the Bill particularly pitched at disabled people? Is that not at least as invidious?
      Mr. Heald: The answer to that is a frank no.
      The Bill will create powers for duly appointed local authority officials to check benefit entitlement, such as powers to enable them to enter business premises, including those of landlords; and it includes other powers which I believe will represent an important step in the Government's increasingly successful strategy to counter benefit fraud—a strategy which has produced record savings for the taxpayer year after year, and as a result of which we are expected to save £7 billion in the next three years.
      It is not good enough for Labour Members to give the impression that they have had 17 years of good ideas on ways to counter benefit fraud, which the Conservative Government have ignored. They are Johnny-come-latelies on this issue. As recently as 1993, the Labour Front Bench spokesman, the hon. Member for Manchester, Withington (Mr. Bradley), was describing the problem of benefit fraud as a mere bagatelle.
      Mr. Denham: Will the Minister give way?
      Mr. Heald: No; I shall not give way any more. I have had enough of these ill considered—
      Mr. Denham: Give way.
      Mr. Heald: I have already answered the response which I know will come, which is feeble in the extreme. The hon. Gentleman admitted that, when he was in local government—
      Mr. Denham: Will the Minister give way?
      Mr. Heald: No.
      The hon. Gentleman admits that he was telling the Labour authorities and the Labour party that this was a serious issue, and they ignored it. It is only because the Government have taken the effective steps and action they have that fraud is now being tackled, and tackled effectively.
      Question put and agreed to.
      Bill read the Third time, and passed.

  Local Government Finance (Wales)
  7 pm
  The Secretary of State for Wales (Mr. William Hague): I beg to move,
  That the Local Government Finance Report (Wales) 1997–98 (HC 218), which was laid before this House on 3rd February, be approved.
  Mr. Deputy Speaker (Sir Geoffrey Lofthouse): I understand that with this, it will be convenient to discuss the following motions:
  That the Special Grant Report (Wales) 1997 (HC 219), which was laid before this House on 3rd February, be approved.
  That the Limitation of Council Tax (Relevant Notional Amounts) Report (Wales) 1997–98 (HC 220), which was laid before this House on 3rd February, be approved.
  Mr. Hague: These motions concern provision for local authority revenue spending in Wales in the financial year beginning in April 1997.
  In summary, I propose to set the total standard spending of Welsh local authorities at £2,931.3 million. That is an increase of £66.3 million, or 2.3 per cent., over the current year—slightly more than the forecast rate of inflation. Total standard spending includes £340 million for the four Welsh police authorities, £2,515 million in standard spending assessments for the 22 unitary authorities, and £73 million in specific grant such as national park grant and magistrates court grant.
  Under my provisional capping criteria, every local authority in Wales can, if it sees fit, increase its budget in comparison with its previous notional amount by at least 3.7 per cent.
  My plans for total standard spending increase the advantage that Welsh local government has over its English counterparts. Welsh TSS represents more than £1,000 of expenditure for every man, woman and child in Wales. It is an increase of £20 per head on the current year, and £70 per head higher than the equivalent figure for England.
  That is a good settlement, and I look forward to Labour Members' support for it. They recently announced that they agree with and accept the Government's overall spending plans for the next two years. As the hon. Member for Caerphilly (Mr. Davies) said, quoted in the Western Mail of 21 January:
  "Labour will accept the spending plans for the first two years as they stand. This applies across the board and therefore to Wales."
  It would be churlish of me not to welcome that statement of support for my budgetary plans, even though Labour Members had previously denounced them. The hon. Member for Caerphilly will no doubt wish to clarify tonight whether that commitment applies to the local government settlement, and, if not, what other Welsh spending would be reduced in order to increase it.
  Hon. Members on both sides of the House will also be pleased that the vast majority of local government spending in Wales will continue to be provided from central Government funds. I propose to provide £2,577.9 million in central Government support through aggregate external finance in support of total standard spending. That is an increase of £64.3 million—or 2.6 per cent.—on the current year, about 1 per cent.

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  higher than the increase for England. It amounts to £880 per person, an increase of £20 on the current year, and a massive £150 per head more than the level of support provided in England.
  Aggregate external finance will comprise £1,732.7 million in revenue support grant, £584 million in distributable non-domestic rates, £244.5 million in specific grants—including police grants to be paid by the Home Secretary—and £16.7 million for council tax damping measures.
  My decisions about aggregate external finance clearly confound the view expressed by some people last year that Welsh council taxes would rise rapidly to English levels. My plans will ensure that, on average, Welsh council tax increases should be no higher than those in England, and that average Welsh council tax levels should be about £200 lower than in England.
  I remain of the view that, over the longer term, local government should raise a greater proportion of its income from the local taxpayer—it is difficult to understand how anyone who believes in local accountability can hold a different view. However, I have always made it clear that I would take my decisions, year by year, on the merits of the case, and for the coming year I have decided to hold aggregate external finance at about 88 per cent. of total standard spending. That compares with the much lower figure of 79 per cent. in England.
  In addition, I expect to fund 100 per cent. of mandatory local government reorganisation costs and a proportion of discretionary costs in the coming year, amounting to a total of £10.1 million. Overall, the provision that we have made for transitional costs arising from local government reorganisation will amount to £104 million over the five-year period ending in 1999.
  Mr. Ted Rowlands: The right hon. Gentleman makes a serious point about the way in which central Government increasingly carries the burden of local spending, so that any marginal change in central Government decisions has a disproportionate effect on taxation at local level. That has happened this year and last year. Is not the problem that we have never managed to devise an effective system of local government taxation?
  Mr. Hague: The hon. Gentleman makes a valid point. We have not succeeded in devising a form of local government taxation that would allow local government to raise the vast majority—or all—of its revenue and take all that responsibility. That is why we continue to provide a very large proportion of local government spending from central Government funds. It does not mean that we cannot adjust that amount, but it means that, for a long time to come, unless the basis of local taxation is changed, most of the money will be provided from central Government funds.
  Mr. Christopher Gill: Has my right hon. Friend considered that the only way that we shall put this equation right, so that local government is totally accountable for its expenditure, is to remove the cost of education and social services from the local authority, and assume it as a national responsibility? If we did so, local
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  spending could be almost 100 per cent. funded by the council tax, ensuring greater accountability, greater intelligibility to the electorate and more satisfactory local democracy.
  Mr. Hague: In theory, one way to change the equation would be to reduce the total amount and shift responsibility elsewhere. As my hon. Friend knows, we have moved much responsibility for education budgets into schools, and I prefer to think that our future progress will involve greater devolution to local decision making instead of centralisation of decision making. However, Governments of all parties have tried to reform the present system, and have not enjoyed the experience. I believe that, within the existing system, the decisions that I am announcing for the coming year are right.
  The standard spending assessment specified in the "Local Government Finance Report (Wales) 1997–98", which is before the House, have been calculated in accordance with a formula agreed with the Welsh Local Government Association. It was developed over a two-year period by the Welsh Office and the local government associations, and comprises objective, largely population-based, indicators of relevant need.
  That said, I want to explore all avenues for improving the formula. It is subject to a full review being undertaken jointly by the Welsh Office and the Welsh Local Government Association, which will be completed in time for the 1998–99 settlement. I welcome the fact that local authority elected members are participating in the review working groups. Pending its completion, the Welsh Consultative Council on Local Government Finance agreed that no significant change should be made to the formula for the coming year. The consultative council will consider the review recommendations in the autumn.
  Sir Wyn Roberts: It is all very well for the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) to look a gift horse in the mouth when he refers to the 88 per cent. that my right hon. Friend has secured, compared with the 79 per cent. in England, but does my right hon. Friend agree that the real threat to the favourable treatment that Wales receives is from the Opposition's devolution proposals?
  Mr. Hague: My right hon. Friend makes two valid points. He draws attention to the advantage that Wales enjoys in local government finance, which we have preserved over many years, with a much larger proportion of local authority spending financed from central Government funds. He is right to say that the threat to the formula which determines the spending of the entire Welsh block, on which these figures critically depend, is a fundamental change in our constitutional arrangements, which could sweep that formula away.
  Local authorities are responsible for setting budgets and determining their council tax. In setting budgets, they will need to take account of the effect of their spending decisions on council tax payers.
  Mr. Walter Sweeney: I assume that the aggregate external finance figures that my right hon. Friend has given include the provision from central funds for the police and the amount that comes from the Home Secretary. Will my right hon. Friend clarify

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  whether the figures he gave include the additional funds promised by the Home Secretary to fund additional policing?
  Mr. Hague: The specific grants, which include £171.1 million in police grant to be paid by the Home Secretary, are included in my figures for aggregate external finance, and that is the total provision from the Home Office for the police in the coming year. It therefore includes all policy initiatives, which my hon. Friend will have heard the Home Secretary announce, and which are now being implemented.
  The provisional capping principles that I announced on 12 December enable me to restrain spending by local authorities, if necessary. However, provisional capping limits are ceilings, not targets, and it is open to local authorities to set budgets below their capping limits.
  I have taken careful account of representations made to me about potential council tax increases, should authorities exercise their discretion to budget at cap, so I decided to continue for a further year the targeted council tax damping scheme that I introduced for last year. I am making £16.5 million available within AEF to ensure that, excluding any increase in community council precepts and discretionary non-domestic rate relief, no council tax increase can exceed 15 per cent. The great majority of council tax increases will have to be well below that level, and council tax payers in nine of the 22 unitary authority areas will benefit from the scheme.
  Mr. Donald Anderson: The capping limit in Wales is 1.8 per cent., whereas in England it is 2.6 per cent. What is the logic behind the difference?
  Mr. Hague: The capping limit in England is much more complex. It is 2.6 per cent. for certain types of authority but a lower limit for other types of authority. It varies in England because of the introduction of unitary authorities, and because of a different pattern of local government reorganisation from what we have seen in Wales. If one were to allow for all those differences, the hon. Gentleman would find that capping limits are not as generous in England as they are in Wales. I should be happy to write to him with those figures.
  Mr. Denzil Davies: The Minister said that, in an ideal world, he would like to see an increase in local democracy, and more money raised locally. We would all agree with that, although we realise the difficulties. Why, then, does he have capping at all? Why not just put the capping aside and allow local democracy to take its course?
  Mr. Hague: As we discussed earlier, we do not have a system in which local authorities take true responsibility for all their decisions. I am interested to hear Labour Members advocate the lifting of all capping restrictions, because it is one of those murky areas of policy that the Labour party has developed over the past year or two. Previously, it was in favour of abolishing all capping limits; now it seems to be in favour of capping limits for the coming year, if I understand the hon. Member for Holborn and St. Pancras (Mr. Dobson) correctly. I expect that the hon. Member for Caerphilly will enlarge on that in his speech.
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  My answer to the right hon. Member for Llanelli (Mr. Davies) is that the consequences for Welsh council tax payers would be unacceptable if local authorities were left to set the council tax themselves.
  There is good news on the local authority front, which Opposition Members and others outside the House often do not care to recognise. Local government reorganisation has worked well, as the Welsh Local Government Association acknowledges. Only last week, Her Majesty's chief inspector of schools in Wales reported a significant and continuing improvement in standards in our schools. Local authorities are playing a full part in attracting inward investment. I am happy to pay tribute to those who have helped to secure some of our recent projects.
  Local authorities have increased access to private sector resources for capital investment under the private finance initiative, and a significant number are pressing ahead with schemes. They are beginning to realise that they do not have to depend on central Government capital allocations.
  There are a number of ways in which local authorities can take action to help themselves, particularly through the levering in of private finance. Much more can be achieved by innovative partnerships between local authorities and the private sector. That has for a long time been the case with regeneration projects, but now the opportunities extend to a wide field of mainstream service delivery.
  Under our PFI, major and radical changes have been made to the capital finance rules over the past two years, which, coupled with new arrangements for revenue support which are not constrained by the normal capping rules, have given local authorities the tools to go about providing services and facilities such as schools, roads, libraries and leisure facilities in radically new ways. Again, I pay tribute to those authorities that are looking seriously at private finance options.
  Local authorities should also consider the opportunities for transferring their housing stock, with the consent of their tenants, to a local housing company or an existing housing association. That allows borrowing for improvements in the housing stock outside PSBR constraints, and, depending on the valuation of the stock, it can also generate a usable capital receipt for the authority. Where stock transfers at a positive value, concessions agreed at the time of the budget make the receipt position more favourable than under previous rules.
  I am therefore pleased that a number of Welsh authorities are actively considering stock transfer, and I urge all authorities to do so. Experience in England amply demonstrates the benefits to councils and their tenants. Stock transfer should be regarded not simply as a means of dealing with the problems of individual estates, but as a strategic choice for long-term investment in the housing stock. I wish that, instead of decrying as inadequate the resources that local authorities have, Opposition Members and local authorities would take a positive view of the opportunities that those resources and new ideas provide.
  I make no apology for stressing the importance of the need for continuing public expenditure restraint. It has been the key to our enviable economic performance in recent years. Local government in Wales continues to

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  receive almost half the resources at my disposal. It must expect to play its full part in keeping public expenditure in check.
  Mr. Llew Smith: How can the Minister say that he wants public expenditure restraint, while accepting and supporting a £60 million investment in the royal yacht from public funds?
  Mr. Hague: Some of the investments that have come into the United Kingdom, and specifically into Wales, in recent years have been partly negotiated or signed because of events held on the royal yacht. I can absolutely assure the hon. Gentleman of that. The royal yacht is worth far more than £60 million in generating new jobs and investment for the UK, and Wales has been one of the principal beneficiaries. [Laughter.] Anyone who laughs about that shows a depressing lack of imagination about the marketing of this country.
  Mr. Gill: Does my right hon. Friend agree that the £90 million that the British Government will be called upon to pay for the new European Parliament building is 50 per cent. more than the cost of the royal yacht, and will return no benefit to the United Kingdom?
  Mr. Hague rose—
  Mr. Deputy Speaker: Order. The Secretary of State should confine his remarks to the debate on the rate support grant (Wales).
  Mr. Hague: I have no plans, Mr. Deputy Speaker, to allow any of the projects recently mentioned to be financed out of the Welsh local government settlement, as hon. Members will be delighted to hear.
  Mr. Paul Flynn: The Secretary of State mentioned the jobs that have come from the royal yacht. Has he noticed that the royal yacht has never visited Japan or Korea? Can he tell us how many jobs resulted from the destinations that it has visited? How many jobs for Wales arose from its visits to the Lesser Antilles, the Azores, the Leeward Islands, the Windward Islands, Gran Canaria, Grand Cayman, the Ivory Coast or Namibia?
  Mr. Hague: The hon. Gentleman will be delighted to know that the royal yacht will be visiting Japan and Korea on its current tour. As his constituency is one of the principal beneficiaries of investment from Korea, he in particular should welcome our continued good relations with Korea.
  Local authorities must expect to play their full part in keeping public expenditure in check. As large organisations with big budgets, local authorities have scope to prioritise services and to put in place tight, cost-effective administrative and service structures. Reorganisation has given Welsh local authorities the opportunities to do that.
  I have seen the predictable press reports that always appear at this time of year speculating on cuts or meltdowns of one sort or another, including teacher
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  redundancies by a number of authorities. One authority seems to be preparing for teacher redundancies while increasing allowances for its members. I am heartened by reports that some authorities have rejected a policy of teacher redundancies, including Carmarthenshire, Denbighshire and Rhondda Cynon Taff. If some authorities can manage not to sack teachers, I question whether any authorities need to take such action.
  If local authorities manage their resources prudently and in a way that their residents have a right to expect, there is no reason why they should have to cut front-line services as a result of my settlement proposals.
  This morning, the hon. Member for Caerphilly (Mr. Davies) and his Front-Bench colleagues, in their role as the chief gloom-mongers of Wales, were trying to spread despondency about the local government settlement. It is time that they recognised that it is incumbent on those who criticise the level of resources provided to say where they would obtain additional resources. Opposition Members have got themselves into the ludicrous position in which they call for higher spending on a wide range of items in particular, while maintaining that they would spend no more money in total.
  Such are the contortions taking place on the Opposition Benches that the hon. Gentleman has even had to resort to defending my budget. He said in the Grand Committee on 4 December that it meant "cuts", the consequences of which "would be dreadful". However, the day after the shadow Chancellor's famous speech last month, the Western Mail said of the hon. Member for Caerphilly:
  "He said the figures were open to debate as to whether there was a cut or an increase."
  That is the light in which we must judge anything he says about cuts during the debate. Not only does he not agree with me; he does not even agree with himself.
  If the hon. Gentleman does not agree with the settlement that I propose, let him say what settlement he proposes. The figures for each local authority which we are debating tonight are the product of two factors, and two alone: the first is the total available for local government spending, and the second is the standard spending formula by which that money is distributed. Anyone who votes against the measures tonight is implying that he is unhappy with the total, or the formula, or both.
  Last night, the Opposition voted against the parallel English reports, because they said that they disagreed with the formula by which the money was shared out. Tonight, however, we are debating a Welsh settlement, before which the Welsh Local Government Association, with its clear Labour majority, specifically asked me not to change the formula.
  The formula is agreed with Welsh local government, including members of the Labour party. The formula, as I have said, has been worked out by the Welsh Office and the Local Government Association, in close consultation and by agreement. It therefore cannot be the formula which troubles Opposition Members tonight, unless they are telling me that the leaders of all the Labour-controlled authorities were wrong.
  The only other factor up for debate is the total sum available. That could be increased only by reducing other Welsh Office programmes, given the cross-party

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  agreement on the total Welsh budget—a budget that already assumes large and continuing reductions in the running costs of the Welsh Office and the non-departmental public bodies.
  To vote to increase the settlement, while also stating that the Welsh Development Agency would be a high priority, that the money for an assembly would be found within the block, and yet that the total budget would remain the same under a Labour Government, is ludicrous double-speak. If Opposition Members vote against the settlement while maintaining that they need no compensating reductions elsewhere, people sitting at home in Wales tonight will be able to smell the hypocrisy oozing out of the No Lobby.
  I am the first to acknowledge the importance of local authority services to the communities they serve, and to the people of Wales as a whole. That is reflected in my settlement proposals. A 2.3 per cent. increase in standard spending is fair in the context of the overall level of resources available and the needs of other public sector organisations, including the health service. It enables local government to maintain its services, provided that authorities are ready to set clear priorities and to pursue new opportunities to save and raise money. I commend the settlement to the House.
  7.26 pm
  Mr. Ron Davies: I shall deal first with the central thrust of the Secretary of State's argument. I shall vote against his proposal—and encourage my right hon. and hon. Friends to do likewise—because I believe the settlement to be deeply damaging. Let me assure the Secretary of State that there is no agreement whatever on the Welsh Office budget.
  It would be dishonest for me or any of my colleagues to urge local government in Wales to spend over budget in the coming financial year in the hope or expectation that an incoming Labour Government could bale them out in the middle of the financial year. I do not propose to be dishonest. That is why I and my hon. Friends have made it clear to local government that, if there is a general election that takes us into the next financial year, and local authorities have overspent, they cannot look to the Welsh Office to bale them out. That is our clear position.
  The Welsh Local Government Association has made it clear that it is deeply unhappy with the settlement. I have no doubt that my right hon. and hon. Friends who represent Welsh constituencies have been in touch with their leaders and local authorities, who will have impressed on them the deep dissatisfaction of Welsh local government with the settlement.
  Mr. Hague: The hon. Gentleman mentioned the coming year. He was quoted in the newspapers as saying that he agreed to the total Welsh Office spending plans for the next two years. That applied to total Welsh spending and to the Government's total spending plans. Was he misquoted? If not, and if he wanted to spend more on the local government settlement at any time in the next two years, would he not have to reduce other spending programmes?
  Mr. Davies: The Secretary of State is deliberately misquoting me. I have never said that I agree with the settlement, but I recognise that it is the settlement that will apply in the next financial year.
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  After 18 years of Conservative government, if I were Secretary of State I would not expect local government to cope with the burden of cuts that the Government have imposed. I do not agree with the settlement and I do not want it. I can tell the Secretary of State directly: I believe that the settlement is inadequate and unfair to local government. I believe also that the Government are playing politics with local services and the jobs of people in the public sector. Education will bear the brunt of the cuts that the Secretary of State has put before the House this evening, which will result in the loss of 1,000 teaching jobs in Wales in the coming year. How on earth could I, or any right hon. or hon. Member who represents a Welsh constituency, agree with that package?
  Mr. Rod Richards rose—
  Mr. Davies: I shall not give way to the hon. Gentleman. Many of my hon. Friends wish to contribute to the debate and, if the hon. Gentleman wishes to make his own speech, no doubt he will seek to catch your eye, Mr. Deputy Speaker. If any other right hon. or hon. Members who represent Welsh constituencies wish to intervene, of course I shall consider giving way.
  I make it clear to the Secretary of State that I have ambitions for local authorities to become dynamic and independent. I want them to promote economic development, conserve their environment, plan communities, educate children and care for the infirm. Year after year, the Government have undermined the ability of local councils to achieve those goals. The Government have placed duties on councils and then removed the resources needed to meet their obligations.
  In the past 10 years, central Government expenditure in Wales has increased by 71 per cent. in real terms, while local government expenditure has increased by only 43 per cent. While central Government expenditure has more than kept pace with inflation, local government expenditure has failed to do so. Local government has experienced a real reduction in available resources, services have been cut, and council taxes continue to rise. It is a typical Tory trick: pay more and get less.
  That is precisely what will occur under this settlement. Services throughout Wales—particularly education—will be cut. The Secretary of State is fond of quoting the Western Mail. I refer him to its report of 27 January, which forecast the loss of 750 teaching jobs. If this settlement is approved tonight, there will be an average increase of 8 per cent. in council tax across Wales—or £40 extra tax for every council tax payer in Wales.
  The Secretary of State boasted this evening about how well Wales is supposedly doing under his stewardship compared with the rest of the country. I remind him of Westminster city council: it is up to its eyes in sleaze and corruption, and is one of the richest boroughs in London. If Welsh local authorities were funded on the same basis as Westminster, band D council tax in Wales would be reduced by a staggering 33 per cent. Local government has been the Government's whipping boy and, as the British people have voted consistently for Labour councils, the Government have responded by whipping those councils even harder.
  At the heart of the argument between us is the performance of the British economy under the Conservatives. The simple fact is that Conservative

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  economic policy has failed and, in typical Tory fashion, the price must be paid in homelessness, crumbling schools, deteriorating health care, and divided and alienated communities. The people of Wales know that only too well. Welsh gross domestic product is 16 per cent. below the United Kingdom average, and it has shown no improvement after nearly 18 years of Tory rule. Economic failure has resulted in an inability to control the nation's finances. Our national debt is almost £400 billion—double the level when the right hon. Member for Huntingdon (Mr. Major) became Prime Minister.
  Interest payments last year were more than £25 billion—more than three times the size of the total Welsh block—and the public sector borrowing requirement in 1995–96 amounted to more than £30 billion. Even in the fifth year of supposed recovery, the PSBR is still unacceptably high at £27 billion. The balance of public expenditure is out of control. Instead of investing for the future, improving infrastructure and promoting the economy, education and training, public expenditure is increasingly used to meet the social cost of failed economic policy. Education expenditure in Wales has increased by 36 per cent. in the past 10 years; social security expenditure—largely the cost of idleness enforced by Government policy—has increased by 43 per cent.
  The Secretary of State claims that his priorities for the coming year are economic growth and the national health service, but he has provided no details of those additional resources nor of how they are allocated. He has not told us how his decisions will affect other programmes in the Welsh Office total spend. He has not yet published his Department's report, so how does he expect me to propose amendments to it? He and his predecessors have tried constantly to mislead the people of Wales about the true level of Government spending in Wales. They have elevated media manipulation to an art form: they have leaked, briefed and dissembled. Last December, the Secretary of State had the effrontery to announce an inquiry into the publication by the Western Mail of expenditure figures that his own office had leaked.
  If we accept that the Secretary of State's stated priorities are economic development and health, will he acknowledge that local government has a vital role to play in enhancing economic growth—including projects such as LG—and in protecting the health of the Welsh people? What share of the alleged resources for economic growth and health has he given to local government? That is a straightforward question, and we are entitled to an answer. I invite the Secretary of State to intervene and provide that answer.
  Mr. Hague: I shall intervene, but not on that point. The hon. Gentleman made an entirely unsubstantiated assertion about the source of a leak from the Welsh Office. I have established an inquiry into the matter and the report is imminent. I shall write to the hon. Gentleman about it, and to anyone else who is interested—including the hon. Member for Caernarfon (Mr. Wigley), as he is obviously curious about the findings. There is no evidence
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  for the hon. Gentleman's assertion that the information was leaked by my office. He should therefore back up his assertion or withdraw it.
  Mr. Davies: I have no intention of doing so. The figures were prepared by the Secretary of State's Department for his use. They were not divulged to anyone else. How could anyone outside the Department have released those figures? It is a simple matter: they were the Secretary of State's figures and he had exclusive control of them. They were prepared by his office for his use. No one other than officers of his Department could have accessed those figures.
  Mr. Hague: When the hon. Gentleman says that the figures were leaked by my office, he clearly implies my personal office. The standard of his accusations and of his debate this evening are a sad reflection on his leadership of the Labour party in Wales.
  Mr. Davies: Is the Secretary of State saying that the figures were leaked not by his own personal office but by someone in the Welsh Office?
  Mr. Hague: We are having an inquiry.
  Mr. Davies: How can the Secretary of State be sure that his private office did not leak the figures if, as he now claims, the inquiry is not complete?
  Mr. Hague: I asked the hon. Gentleman to substantiate his accusation regarding civil servants—who cannot answer for themselves in this place—and he cannot do so. That is highly irresponsible conduct, which is exactly what we have come to expect from the hon. Gentleman.
  Mr. Davies: I am afraid that the Secretary of State's performance is woeful. The figures were prepared by his Department for subsequent publication. They were available only to civil servants and politicians in his Department—nobody else could have accessed them or leaked them. The Secretary of State is responsible for his Ministers, political advisers, media officers and other civil servants in his Department. Someone in his office leaked the information, deliberately and maliciously, to the Western Mail.
  Mr. Richards: On a point of order, Mr. Deputy Speaker. I seek guidance on what the hon. Member for Caerphilly (Mr. Davies) has been saying for some time. Is it in order for an hon. Member—
  Mr. Rhodri Morgan: This is a foolish point of order. Sit down.
  Mr. Deputy Speaker: Order. I am trying to listen to the hon. Member's point of order.
  Mr. Richards: The hon. Gentleman's body temperature is higher than his IQ—on the centigrade scale.

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  Is it in order, Mr. Deputy Speaker, for an hon. Member to make unsubstantiated accusations in the House against officers of the Crown? [HON. MEMBERS: "Sit down and do not be silly."] I recall Madam Speaker saying that she deprecated attacks on civil servants by hon. Members.
  Mr. Deputy Speaker: Hon. Members are responsible for their own speeches.
  Mr. Davies: I invited the Secretary of State to give a straightforward answer to my question. What share of the alleged additional resources for economic growth or health has he given to local government? If he cannot answer that question now—I realise that local government finance is complex, and perhaps he has not had time to master it—will he write to me with that information?
  Mr. Hague: I am happy to answer the hon. Gentleman's questions all evening. It amazes me that he is so resistant to more Welsh Question Times in the Grand Committee, given that he is so keen to ask questions in the House.
  The increased resources for economic development and for health that I announced are channelled through the health authorities, the Welsh Development Agency and the Development Board for Rural Wales. Local authorities often work in partnership with those authorities and agencies, so there are important spin-offs for local government. The resources are not specifically channelled through local authorities. That is the answer to the hon. Gentleman's question, and I am perfectly happy to answer any other questions that he may have about the Welsh Office budget and local authority finance, but that may keep us here for a long time.
  Mr. Davies: I am grateful to the Secretary of State, because that is precisely the answer that I knew he would give. His Department fails to acknowledge the crucial strategic role that the Welsh Office and local government could play together in tackling the economic and interlocking problems of our communities, such as unemployment and idleness, under-achievement, poor housing, poor environment, poor standards of public behaviour and poor health. It is the Welsh Office's failure to understand that and to work with local authorities that has caused so much resentment and frustration in Welsh local government under his regime.
  We need a coherent, strategic partnership, but that is the last thing that we will get from a Government who are obsessed with short-termism and media manipulation.
  Mr. Sweeney: Will the hon. Gentleman give way?
  Mr. Davies: No, I have given way to the Secretary of State and I want to make progress.
  Mr. Sweeney rose—
  Mr. Davies: I shall give way to the hon. Gentleman in a little while.
  The Secretary of State has just claimed that total standard spending has increased by 2.3 per cent., but that is at best misleading. He knows full well that the true increase is only 1.6 per cent., which is below the level required to keep in line with inflation. He tried that trick
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  in the Welsh Grand Committee last year. When challenged by my hon. Friend the Member for Bridgend (Mr. Griffiths), he said:
  "It is no good taking out this or that to make the figures look different. The total figure is rising by 2.6 per cent."—[Official Report, Welsh Grand Committee, 4 December 1996; c. 14.]
  The Under-Secretary of State for Wales, the hon. Member for Cardiff, North (Mr. Jones), in his letter to the chair of the Welsh Local Government Association on 15 January 1997, admitted that the true increase is only 1.6 per cent. We have the Secretary of State's version—a 2.6 per cent. increase—and his hon. Friend's version, a 1.6 per cent. increase. Which of those two figures represents either the true position or the Government's position?
  We all know that a host of adjustments will have to be made before the truth is uncovered. Expenditure provision in the settlement is insufficient, not only to meet pay and price inflation, but to enable local authorities to maintain services at the current level in the face of rising demand, especially in schools, community care and the fire service.
  The Secretary of State also claimed that aggregate external finance has increased by £64.1 million. Does he agree that, if both last year's damping schemes are included, external finance for local authorities in Wales increased by only £43 million, which is less than required to keep pace with inflation?
  The Secretary of State's decisions will mean yet further council tax increases for the people of Wales. The increases will be 8 per cent. on average, with many Welsh authorities facing increases of nearly double that figure. In Ceredigion, the increase is 9 per cent., which is £49; in Torfaen it is 15 per cent., which is £65; in Merthyr it is 15 per cent., which is more than £74; and in Denbighshire it is more than 16 per cent., which is £80.
  Those council tax figures are part of a deliberate, long-term plan to increase the level of council tax in Wales, and there is no use the Secretary of State denying it. In a letter dated 7 November 1995 to my right hon. and learned Friend the Member for Aberavon (Mr. Morris), the Secretary of State confirmed that that is his long-term plan. His very words were:
  "I believe that over time local authorities in Wales should raise a higher proportion of their income from council tax. The 11 per cent. increase is the result of this approach."
  We should have no illusions about this settlement. When council taxes go up, it is because the Welsh Office and the Treasury intend them to go up. The 8 per cent. increase in Wales far exceeds the 6 per cent. increase for England that the Government announced yesterday. Further evidence is provided by the fact that revenue support grant now accounts for 54 per cent. of local government spending, whereas 10 years ago it was 64 per cent.—10 per cent. more.
  Mr. Rowlands: My hon. Friend returns to the point with which we began the debate, about the balance between central and local government expenditure and taxation. A marginal change in central Government support to local authorities leads to a disproportionate increase in council taxes. Any increase in local taxation is unfair, especially to poorer communities such as he and I represent. The burden of taxation is heavier on poorer communities.
  Mr. Davies: My hon. Friend is right. He represents Merthyr Tydfil and Rhymney, which includes part of my

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  local authority area of Caerphilly. That local authority faces horrendous consequences as a result of this settlement. It is grappling with budget cuts of £8 million, as are other local authorities. The local authority of my hon. Friend the Member for Blaenau Gwent (Mr. Smith) is one of the smallest, but it faces cuts of £6 million or £7 million in its annual budget.
  The consequences must rest on the Government's shoulders. There will be real and severe cuts across the whole range of local government services, especially services that are trying to meet the cost of economic and social failure. The settlement will affect local authorities that are trying to invest in and improve their communities to generate wealth and job opportunities, and to build for the future. The Government are so short-sighted that they do not understand the role that local authorities play, and they will not work in partnership with them. It is all part of the Government's strategy to make council tax payers pay more. The 1p cut in the standard rate of income tax in last year's Budget will be more than cancelled out by council tax increases resulting directly from this settlement.
  In addition, the capital settlement has been cut by £66 million. That money is needed for investment.
  Mr. Sweeney: Will the hon. Gentleman give way?
  Mr. Davies: I shall give way in a moment.
  The capital settlement has been cut by 13 per cent. in cash terms, and by more than 15 per cent. in real terms. Is that not typical of the Government? They are irredeemably short-termist, and look only as far as the next election: they do not even have the courage to face that election.
  Mr. Sweeney: I am grateful to the hon. Gentleman. He said some time ago that he would give way in a moment; then he said that he would give way in a little while; then he said that he would give way in a moment. Since then, he has responded to two other interventions.
  I wanted to take up a point in the hon. Gentleman's speech—I hope that he can still recall it—when he contrasted the increase in education spending with the increase in social security spending, implying that the increase in social security spending had been excessive. What cuts in social security does he propose in order to increase education funding? If the hon. Gentleman's party were to take office, and if the social chapter were to be introduced, how much more would he have to spend on social security—or cut benefits?
  Mr. Davies: I shall give the hon. Gentleman a direct answer. In Wales, some 30,000 people under 25 are unemployed. I want them to return to productive work. I want them to have the self-respect and discipline that comes from the opportunity to work for a living—an opportunity that the hon. Gentleman and the Government he supports have denied to generations of young people
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  in Wales. When we provide young people with that opportunity—with the ability to be self-sufficient, and to work for themselves—the social security bill will fall.
  The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones): Will the hon. Gentleman give way?
  Mr. Davies: No, I will not. Many of my colleagues want to speak. The Minister will be able to speak—he will wind up the debate—and I want to finish my own speech so that the debate can continue.
  The reality of the settlement is that total standard spending has been cut in real terms, Welsh Office support has been cut in real terms, and the capital spending programme has been slashed in both real and cash terms. Not only are resources being reduced; responsibilities are being increased. How can the Secretary of State expect local authorities to meet the cost of inflation in pay and prices? Will he confirm that a 3 per cent. increase in teachers' pay—mentioned in leaks in Sunday's newspapers—will cost Welsh local authorities nearly £20 million extra next year, and that the settlement makes inadequate provision for that increase?
  Does the Secretary of State acknowledge that the expenditure forecasting group, in which both his officials and local government officials took part, estimated that central Government initiatives, through legislation and policy, will require extra spending of £129 million next year—on top of inflation? Does that not mean that, in real terms, the settlement means a cut of 3 per cent., or even more, in the budgets of Welsh local authorities next year?
  Will the right hon. Gentleman confirm that his vacillation, and that of his Department, over the technical adjustment of the notional amounts in the capping rules for the nursery voucher scheme has bedevilled this year's settlement? Why does he not accept that nursery vouchers are wasteful, inefficient and particularly unsuited to Wales, as evidenced by the overwhelming number of representations against the scheme made to him and the single, solitary letter in support?
  Does the right hon. Gentleman acknowledge that the new local authorities have had to make substantial savings in the current year to meet the continuing cost of reorganisation, and that they are having to deplete their reserves to maintain existing services—if they can? He should recognise that, and he should admit that this is a dreadful capital and revenue settlement. No doubt hon. Members will wish to illustrate the effect that it will have on their local authorities. It is clear that the Secretary of State does not realise that the financial base of the new local authorities in Wales is already precarious, and it will be weakened further by this harsh settlement.
  Mr. Richards: Will the hon. Gentleman give way?
  Mr. Davies: No, I will not.
  It is time for the Secretary of State to admit that his decision will impose an unmanageable outcome for local government, and to acknowledge that that is bound to result in damage to our local communities. It is time for him to accept that his policies are flawed and lacking in coherence. It is time for him to accept that his budget decisions betray a lack of understanding of, or sympathy for, the needs of the people of Wales.

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  The settlement reflects the failure of Conservative policies, and itself fails to provide a platform on which to build for the future. Since 1979, local government in Wales has struggled to serve its communities well, despite the handicaps inflicted on it by successive Welsh Office Ministers. Welsh councils have had enough of this tired, incompetent, feckless, dishonest Government. Like the rest of the country, however, they will have to wait for the general election and the next Labour Government. The sooner that comes, the sooner we can start the long climb back to ensure honesty and decency in the provision of public services in Wales.
  7.54 pm
  Sir Wyn Roberts: I am glad to have the opportunity to comment on the settlement, but I do not know whether to be reassured or perturbed by the fact that the hon. Member for Caerphilly (Mr. Davies) is prepared to accept so much with which he disagrees. It makes me wonder what else he accepts, but disagrees with.
  The settlement is, once again, constricted—as it should be, if we are to keep inflation under control and the overall budget deficit within manageable proportions. It is indubitable that there are public pressures to let public spending rip, but we all know that would be wrong, and, if it happened, it would end in tears of contrition.
  One of my local councils, Gwynedd, has written to me, commenting—very sensibly, in my view—on the position, as seen by its finance and policy committee. The committee estimated its needs at nearly £120 million next year, if services of the present quality are to be provided; but it will be capped at £115.7 million. Its grant from central Government is £95.3 million—which is not ungenerous, at 82 per cent. Interestingly, the council does not propose to spend to the capping limit, because, it says, that would mean a council tax increase of 11.3 per cent. It is a good council, in the sense that it does not regard the capping limit as a target.
  With commendable restraint, the council has expressed a wish to keep its increase to what it thinks will be the Welsh average—between 8 and 9 per cent. That, however, will mean alarming reductions in expenditure, which the council spells out in its letter. It will be interesting to see what final conclusions the full council reaches on 6 March, but one thing is clear: the severity of the cuts that it may impose will depend greatly on the extent to which it is prepared to raise money locally, and, of course, on what it believes it can raise locally—what local people can afford.
  With the present Parliament coming to an end and a general election looming, I am more concerned about the future of local government finance than with the past. In particular, I am concerned about the Opposition's proposals to do away with capping and return local business rates to local control. In my view, both moves would be retrograde. One thing is clear from the deliberations of Gwynedd council, and its decision not to spend up to the capping limit: it, at least, has got the message about the need to restrain spending, and I commend it for that. The abolition of the cap, as proposed by Labour's document "Renewing Democracy, Rebuilding Communities"—published in September 1995
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  and confirmed in yesterday's debate by the hon. Member for Holborn and St. Pancras (Mr. Dobson)—would send local authorities a very different and destructive message.
  Mr. Elfyn Llwyd: The right hon. Gentleman has mentioned Gwynedd council twice. Perhaps he should have told the House that the council had to raise its tax by 25 per cent. last year. To impose a similar tax this year would be totally unrealistic. It could not be paid anyway, could it?
  Sir Wyn Roberts: The council managed 25 per cent. last year, but interestingly it has decided that it could not raise the rate by the figure that might have been suggested to it, and that it would rather keep the rate at the Welsh average. That shows responsibility on its part.
  I am also critical of the proposal of the hon. Member for Caerphilly to return the business rate to local control, because we all surely remember what happened under the last Labour Government when local councils controlled the rate. Businesses were caned and destroyed by high rates. They were easy to hit, because owners had few votes compared with domestic ratepayers. I hope that the Labour party has grown up even since 1995—I refer again to its document. I shall listen carefully to the winding-up speech of the hon. Member for Bridgend (Mr. Griffiths) for, I hope, a denial of Labour's intention to abolish the national uniform business rate, the burden of which the Government have alleviated in last November's Budget, certainly in relation to small businesses.
  The Labour party also proposes, I understand, to end compulsory competitive tendering. That, too, is regressive. The Government are only now beginning to succeed in persuading authorities of the undoubted cost benefits to their consumers of acting in an enabling rather than a direct-provider role. It would be a shame if we were to take a step backwards to the position where, frankly, services were provided primarily for the benefit of local authority trade union employees, rather than the ratepayers who pay for them.
  I assure Opposition Members that I am not alone in not wishing for a return to that position, which, I hate to remind them, finally led to the winter of discontent, when there were mountains of uncollected rubbish and even unburied dead, and the last Labour Government fell out with trade union leaders, who refused to listen to them and to their pleas for restraint.
  I have been reading Lord Callaghan's "Time and Chance", which contains a first-class account of what I have been talking about. We have always maintained that capital receipts from the sale of council houses and other property should for the most part be used to reduce existing debt, thereby reducing the debt interest burden on ratepayers, but the Labour party believes that those receipts should be spent.
  I have read recently that the Labour party is adhering to that policy. If so, it must explain, if it can—I do not believe that it can—how it can allow that without failing to reduce the nation's debt burden as a whole. Welsh local authorities' outstanding loan debts on housing and non-housing services run to hundreds of millions of pounds, as the table on page 17 of "The Local Government Finance Report (Wales) 1997–98" shows.
  It is clear that, whatever local authorities' financial problems may be, they will be as nothing compared with the problems should the Labour party gain power. If the

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  Opposition's devolution plans are approved by Parliament, there will be even less money for local government and less power too, as the assembly arrogates to itself more and more of the powers now exercised at local level. That will certainly happen.
  It is now of course fashionable to malign the quangos, the non-departmental public bodies, but we should never forget that they were largely the invention of the Labour party, which believed that local authorities were inadequate to perform the nationwide tasks that needed to be performed in different sectors. Tourism and economic and industrial development are good examples.
  Latterly, the Labour party seems to have repented and reverted to supporting the local authorities that it controls, but I do not believe for a moment that its repentance will last for long, once it has its party commissars and apparatchiks on the NDPBs.
  Mr. Richards: My right hon. Friend has expressed his concern about the Labour party's proposal to create an assembly in Cardiff. Is he doubly concerned about the effect of an assembly in Cardiff on his constituents in north Wales? Is he not alarmed by the statement of the hon. Member for Caerphilly (Mr. Davies), who said that the assembly would not have tax-raising powers initially, which implies that the Labour party's plans are similar to those in Scotland, in that a Welsh assembly would have tax-raising powers?
  Sir Wyn Roberts: All parts of north Wales and mid-Wales fear that, because of the sparsity of their populations, they would be dominated by an assembly in south Wales, representing as it inevitably would the bulk of the population, which is located in the south.
  On my hon. Friend's second point, I do not think that we have heard the end of the Labour party's plans for an assembly, and I would not be surprised if, even initially, it had tax-raising powers. I am sure that, if there is a Scottish Parliament with tax-raising powers, there will be a cry from the assembly men in Wales that they should have a similar power.
  Mr. Ron Davies: I do not know why the right hon. Gentleman keeps raising this argument. We have made it absolutely clear that the Labour party has no proposals to give tax-raising powers to the assembly.
  Sir Wyn Roberts: The hon. Gentleman assumes that he and his party can carry any proposal for an assembly through the House without change. Again, I ask him to go back to our debates in the 1970s to find out just how radical the proposed changes were—they were carried in the House, resulting in the defeat of the then Government, so he must not assume that he can dispose whatever he proposes. It is not up to him; it is up to Parliament to dispose.
  Mr. Davies: I am not assuming anything. All I propose is to put to the people of Wales the question whether they should have their own assembly. If they vote yes, I am sure that the House will wish to accommodate that wish.
  Mr. Deputy Speaker: Order. Passing reference to an assembly is one thing, but talking about it in detail is another.
  Sir Wyn Roberts: I accept your guidance, of course, Mr. Deputy Speaker, but the hon. Member for Caerphilly simplifies a complex issue, as he will find it to be.
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  I was saying that the great danger is that NDPBs, like the Welsh tourist board and the Welsh Development Agency, will do little of value and substance, except pander to the whims of the their political masters.
  On the settlement, I have read the police authorities' representations. The reduction in their capital expenditure is compensated for by additional money for extra officers, plus an increase in revenue—not far short, it seems to me, of what they wanted. Their strongest plea is to be included in the formula working group. I hope that my right hon. Friend the Secretary of State for Wales can accommodate them in that wish. Overall, I agree with him that his proposals
  "provide local authorities with a fair level of funding in 1997–98 given the overall level of resources available and other spending needs."—[Official Report, 28 January 1997; Vol. 289, c. 159.]
  I shall be happy to support him in the Lobby.
  8.9 pm
  Mr. Allan Rogers: I have never heard so many "opposition" speeches by Conservative Members. One would think that we were in government, as we shortly shall be, and that the Conservatives were in opposition. The Secretary of State and the right hon. Member for Conwy (Sir W. Roberts) were more concerned with Labour proposals than with their own. The right hon. Member for Conwy introduced the issue of a Welsh assembly. It is an interesting subject and I am sure that there will be many interesting debates on it, but enough of that for this evening.
  I was disturbed by the Secretary of State's speech, because only in his last sentences did he talk about the services that are provided by local government. I accept that, in the early part of his speech, it was incumbent on him to outline his proposals and the finance related to them. However, I wish that he had said more about services and about how the money is to be applied to them.
  Local government is about providing services to people, whether they live in deprived or in wealthy communities. It is about the direct services that people need. Instead of indulging in yah-boo tactics, we should get down to talking about our communities and the services that they need. I should like to outline the position as it is seen by my local authority, Rhondda Cynon Taff, which covers the constituencies of two of my hon. Friends as well as mine. I shall look at one aspect of local government to highlight what we are debating.
  The Government's proposals will have a substantial effect on Rhondda Cynon Taff council. There is no point in the Secretary of State saying, "It is up to the councils to make the cuts," because the reality is that there will be cuts. In my communities they will lead to the loss of 100 teaching jobs, and about 120 jobs will be lost in social services. Social services jobs have to be translated into issues such as the closure of a sheltered employment facility and a children's resource centre and less assistance to the disabled and disadvantaged who are living at home. Those are just some of the effects of the cuts.
  The housing service will be forced to reduce support for the homeless. There will be a reduction in child care provision. The peripatetic music service, for example, and other services that should benefit our children will be cut, and that will make the schools much poorer.

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  In discretionary areas, the adult education service will be almost destroyed, as will discretionary awards for students. That will affect mature students who perhaps take advantage of other courses and then want to go to university or college. Figures can be bandied about for ever, but they mean that there will be cuts in services, often affecting the most vulnerable people.
  In the second part of my speech, I shall look at the service that is provided for those with learning and disability problems. It is provided jointly by social services, health authorities and local NHS trusts working, in many cases, with voluntary and independent providers such as Mencap. Such services are laid on local authorities by the Government and, in the past 18 years, the Government have put extra duties on local government and have an obligation to fund them. The Government say that they can be paid for from local resources, but they cannot.
  The transfer of some local government functions to central Government has been mentioned. There is an argument for that when central Government continually place obligations on local authorities, fund them initially, subsume the funding into the general rate support grant and then squeeze it off.
  Disadvantaged people come within the framework of five pieces of legislation: the National Assistance Act 1948; the National Health Service and Community Care Act 1990; the Carers (Recognition and Services) Act 1995; the Chronically Sick and Disabled Act 1970 and the Disabled Persons (Services, Consultation and Representation) Act 1986. Those Acts place obligations on local authorities and they cover the areas that will have to be cut because of central Government settlements such as this. The Mental Health Acts of 1983 and 1985 are also relevant to the provision of services for the unfortunate members of our community.
  Beyond the specific legislation passed by this institution, the Welsh Office has laid down guidelines. For example, in 1983 it set out key principles for those with learning difficulties and said that disabled people and those with problems have the right to live an ordinary pattern of life within the community. That is one of the Secretary of State's guiding principles. The guidelines stated that such people had the right to be treated as individuals and to have individual assessment of needs, and added that provision should be made to fulfil those needs.
  The 1983 guidance was updated just two years ago, in 1994, by the Welsh Office document entitled "Welsh Mental Handicap Strategy". It reiterated the key principles and stated that there had to be an individual plan for everyone and that a range of care and support should be provided. It stated that there should be help to obtain real jobs for most adults and that there should be a range of accommodation to include provision for the resettlement of people who were living inappropriately in mental hospitals. Such provision will be savagely cut if the provision of accommodation for the whole community is cut.
  The people I have mentioned depend on support to live in the community. People who have been incarcerated in mental hospitals, sometimes for many years, cannot be allowed to drift into the community, let loose without proper support. This Government and previous Governments have placed responsibility for that support
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  on local authorities. If they want local authorities to do the job, they should provide resources. Not just this Government, but every Government have to do that.
  There is no point in treating local authorities like political footballs. If we are to have a proper system of devolved government, we must allocate to it the resources that are needed to do the job that Parliament has asked it to do. The Secretary of State's proposals are not good enough to allow local authorities to do that. People with learning and disability problems have the right to independence, dignity and the same quality of life as those who have full use of facilities and faculties and are fully able to participate in society. To help them, we must harness the resources not only of local authorities but of other institutions.
  We should set up community support teams consisting of social workers, community nurses, psychiatrists, psychologists and occupational therapists. In addition, we must provide proper medical care, including that which people with learning and disability problems require over and above that of the ordinary members of society. Those are the obligations and complexities of providing for those whom we have said should be in the care and responsibility of local authorities. If the Government cannot will that money to local authorities to carry out those functions, they are failing in their duty and in their responsibility to the people of Wales.
  8.19 pm
  Mr. Walter Sweeney: I should like to pay tribute to my right hon. Friend the Secretary of State for once again securing a generous settlement for Wales, compared with that for England. The aggregate external finance that he has announced represents a 2.6 per cent. increase over last year, and it is about 1 per cent. more than the increase announced for England.
  Mr. Donald Anderson: With that generous settlement, how many jobs does the hon. Gentleman expect will be lost in his local authority?
  Mr. Sweeney: That will be a matter for the local authority to determine, because my right hon. Friend has left with local authorities the discretion, provided that they do not exceed capping levels, to determine how much council tax people will pay. That discretion will apply in Vale of Glamorgan as it will across Wales. I should expect Vale of Glamorgan to look for ways of getting better value for money and of providing better services for a given amount, and not, for example, to waste money on titivating the reception area of its civic offices, on which an enormous amount appears to have been spent.
  When council tax demands are sent, my right hon. Friend and all Conservative Members will no doubt be castigated for not giving enough money to Vale of Glamorgan. Let the local authority put its house in order. If it manages to run Vale of Glamorgan responsibly, I am optimistic that service and job cuts, to which the hon. Member for Swansea, East (Mr. Anderson) has alluded, will not have to be made.
  Aggregate external finance for Wales amounts to £880 per man, woman and child in Wales, which is £150 more per head than in England. AEF represents 88 per cent. of total standard spending, which on any reckoning is an extremely high percentage. I shall not be at all surprised

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  if, when Labour-controlled local authorities send out their council tax demands in a few weeks, they attempt to blame the Government for the increases that they will undoubtedly impose; but local authorities will of course be free to set the council tax of their choice.
  Mr. Llwyd: Subject to capping.
  Mr. Sweeney: Subject, of course, to capping. It is interesting to note that Opposition Members do not seem to like capping. Perhaps that is not surprising, as we all know that Labour-controlled Governments, just like Labour-controlled authorities, tend to act irresponsibly when spending is involved. In the past few days, we have received assurances from some Labour Members, who are not in the Chamber for this debate, that Labour will not attempt to increase spending in the next two years. However, the tone of Opposition Members' speeches today suggests that they assume that central Government are not providing enough money for local authorities. The clear implication is that a Labour Government would provide more.
  I agree with my hon. Friend the Member for Clwyd, North-West (Mr. Richards) that we need answers from the hon. Member for Caerphilly (Mr. Davies). We need to know how much extra money he would spend on behalf of a Labour Government this year and in the year after; but, of course, he has said nothing. It is much easier to stand up and rant at the Government than it is to set out one's own policies, for which one could be blamed.
  My right hon. Friend the Member for Conwy (Sir W. Roberts) has rightly stressed that Government spending must be kept under control to maintain a strong economy. Indeed, if we are to maintain the sustained growth, low inflation and low interest rates of which the Government are rightly proud, we must reduce borrowing and continue the Conservative policy of lowering income and capital taxes. It is therefore important for the Government to encourage restraint in local government spending. Against that background, the Secretary of State deserves to be congratulated on his success, in what must have been extremely tough negotiations with the Treasury and with his Cabinet colleagues, in driving a hard bargain on behalf of the people of Wales.
  In the longer term, I believe that it would be right for a larger proportion of the cost of local government to be borne locally. That would increase accountability and induce a greater sense of financial responsibility, even among Labour councillors not renowned for their careful housekeeping. However, under the current system, it is plainly an important part of the Secretary of State's role to battle for the largest possible share of the taxation cake for the people of Wales. He deserves the thanks of all people living in Wales for screwing an extra £150 per head out of central Government taxes compared with what people in England received.
  I am thankful that more hon. Members representing English constituencies are not in the Chamber for this debate, because, were they to realise fully the effectiveness of my right hon. Friend in those Cabinet discussions, I fear that they would be up in arms and would attempt to cut the amounts provided to Wales.
  Sir Wyn Roberts: Is my hon. Friend aware—I think that I am right in saying this—that the abolition of
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  capping might result, at a conservative estimate, in the spending of an additional £1.5 billion? Does he agree that that would be very inflationary?
  Mr. Sweeney: My right hon. Friend makes a very good point. Opposition-controlled local authorities clearly would like to have us believe that money spent by local government is somehow different from that spent by central Government and that it should not appear in public borrowing figures. Time and again, we hear the argument, "Allow us to spend all our receipts from council house sales," notwithstanding the fact that the authorities borrowed the money to build those houses and have not paid it back.
  You, Mr. Deputy Speaker, have already ruled that this is not the occasion for a full-scale debate on Labour's proposals for devolution in Wales. However, it would be wrong for me to conclude my remarks without pointing out that, if we did not have the strong voice that we have in our Secretary of State, we would not have secured this settlement for Wales. If we were to have the assembly proposed by the Labour party, the danger would be either that we would lose our Secretary of State entirely, or that he would be emasculated and no longer able to speak in the interests of the people of Wales with the strong voice that he now possesses.
  I can see you, Mr. Deputy Speaker, looking at me as if to say—
  Mr. Llwyd: "Shut up".
  Mr. Sweeney: Just so. [Laughter.] I shall therefore finish on this note: let us say no to devolution; let us keep our Secretary of State for Wales; and let us look forward to generous and effective leadership in future.
  8.27 pm
  Mr. Llew Smith: I was brought up to believe—my socialism reflects it—that investment should go where need is greatest, and I believe that that should be reflected in the settlement. If such an element of fairness were introduced into the settlement, my constituency of Blaenau Gwent would be one of the greatest recipients. Whatever measuring rod one uses to measure need and poverty, Blaenau Gwent almost certainly would be near the head of the league.
  Just last week, the Government's statistical office accepted that Blaenau Gwent has the lowest levels of household income and wages in Wales. We have never recovered from the closure of the coal industry and the rundown of the steel industry. The lost jobs have not been replaced with similar ones. In addition, male unemployment in my constituency is unacceptably high, especially if one examines the real figures rather than those that the Government have fiddled about 30 times. The Government would have done far better to invest in creating jobs than to concentrate their investments in the dole queue.
  Linked with unemployment and low wages is the problem of ill health. In Blaenau Gwent, the level of heart and respiratory illnesses and, indeed, cancers is far above the national average. The number of deaths from heart disease is exceptionally high in my constituency—we are not far behind Scotland, which has one of the worst rates in Europe. The 1991 census showed that 41 per cent. of

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  families in my constituency had a member suffering from a long-term illness or a disability which affected how that person lived his life.
  The same census showed that some 40 per cent. of the houses in Blaenau Gwent were built before 1919 and were in need of repair. We also have one of the lowest levels of car ownership in any of the valleys in south Wales, which will make it especially difficult for us to take advantage of the LG investment in Newport unless we reintroduce the train service which served that community so well for many a year.
  Mr. Rogers: My hon. Friend makes an important point. New industries may come to the coastal areas of south Wales, but people from the valley communities will face a virtual penalty of £20 to £25 per week in travel costs. That means that the jobs are not, in effect, well-paid.
  Mr. Smith: It is certainly difficult to get from the north to the south of the valleys, just as there are difficulties in moving from one valley to another. Someone living in an area of high deprivation who cannot afford his own transport will certainly have his chances of finding employment limited.
  To digress a little, I remember a past chief executive officer of Gwent health authority drawing up plans for the ambulance service in my constituency. He brought along a map, and although none of us had a PhD in geography, we had to tell him that the map was flat whereas the area had valleys. The same kind of logic applies in relation to the point made by my hon. Friend the Member for Rhondda (Mr. Rogers).
  I could repeat the type of figures that I mentioned earlier, but I think that I have said enough to highlight the deprivation faced by many people in Blaenau Gwent. What is the Government's response? It is to treat the most vulnerable people with disdain. That is certainly the case in the settlements that we are debating.
  Sir Wyn Roberts: I really cannot allow the hon. Gentleman to get away with that. The standard spending assessment for Blaenau Gwent is £65.268 million and its external support is £62.9 million. He really cannot expect more generous treatment than that.
  Mr. Smith: It is convenient that the right hon. Gentleman should intervene at this point, as I am about to deal with the settlements for last year and for this year and how they affect my constituency. My conclusion—and that of the people who make up that community—is, to say the least, somewhat different from the right hon. Gentleman's. For instance, in our first budget as a county borough we had to make cuts of £5 million—and that was in addition to the £2 million that we had to take from our reserves. We also had to increase our council tax by some 25 per cent.
  Cuts were made across the board by reducing social services after-care, cutting much-needed building maintenance and closing a cinema. Charges were also increased substantially. This year we have no reserves on which to call. It is estimated that the council tax will rise by 16 per cent. and that cuts of £6.3 million will have to be made. Within the past year, there have been cuts of £11.3 million in the two budgets to which I referred, and we have taken £2 million from our reserves. Clearly, this has hit some of the most vulnerable people.
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  As the Secretary of State was reminded by the placards that greeted him when he visited my constituency yesterday, those cuts represent about 20 per cent. of the money to be wasted by the Government on the royal yacht. The Government clearly regard the royal yacht as a greater priority than education or social services. In education, social services, economic development, highways, finance and leisure, the effect will be the same: cuts and more cuts. In the forthcoming year, cuts will total approximately 10 per cent. I may be old-fashioned, but I was brought up to believe that it was the task of local authorities to provide local services, whereas the Government believe that the role of local authorities is to dismantle those services.
  The Secretary of State visited my constituency yesterday to meet the Heads of the Valleys Standing Conference. Perhaps he would like to return to my constituency and meet some of the people whose lives will certainly be blighted by the cuts. The council has not yet taken any decisions, so the Secretary of State could still examine the options that it faces. They include what is to happen to the elderly and most vulnerable if the home care service is reduced, or to those youngsters in education whose future will be even bleaker if teachers are made redundant and school budgets cut or cash-limited because of increased expenditure on items such as salaries.
  Related problems include changes in the cost of school meals and the possible removal of the price subsidy, the rationalisation of nursery schools, a reduction in school buildings maintenance and a reduction in home-to-school or home-to-college transport. Leisure services could be hit by the closure of facilities such as swimming pools and by cuts in highways maintenance. The list of services affected is endless. Although the council has not decided where the cuts will be made, it recognises that all services have to come under scrutiny—none is immune from cuts.
  The Government want to create the impression that the cuts are the fault of inefficient Labour-controlled local authorities, but people in communities such as mine are far too sensible to believe such nonsense. They know that the real reason for the cuts is that the Tories do not believe in public services—and even if they did, their expenditure is restricted by the convergence criteria of the single currency. Neither the Tories nor the single currency have any relevance to our communities: that feeling is reflected in the opinion polls, and it will soon be reflected in the polling booths.
  8.38 pm
  Mr. Roy Hughes: We are debating the Welsh revenue support grant reports, but it is necessary to consider them in the context of Welsh local government and its structure following the recent reorganisation.
  The reorganisation of local government is a costly business, but there have been two major reorganisations in Wales in just over 20 years. They were both carried out by Conservative Governments. I suggest that we have still not got the right structure.
  I shall illustrate the absurdity of the present structure with a blatant example. Before the recent reorganisation in Gwent, we had one director of education; now we have five. That is just one example, and I could cite many more. Such arrangements are wasteful, extravagant and unjustifiable. Compare that with the parsimonious

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  revenue support grant settlement that the Government are trying to foist on Welsh local authorities. It all goes to show that the Conservative party has never understood Wales. That is why it has always fared so disastrously at the polls at parliamentary and local government level.
  Mr. Sweeney: Will the hon. Gentleman give way?
  Mr. Hughes: No, I am not giving way.
  Having willed the end, the Government have a moral duty to provide the means, so that adequate and efficient local government services can be provided for the Welsh people. That is not happening.
  Mr. Lawrence Nippers, Newport's director of finance, is an experienced and much respected local government officer. He wrote to me on 31 January, pointing out that the RSG settlement for next year has been a massive disappointment to the new unitary councils in Wales. He says:
  "Our spending on both revenue and capital is being squeezed …
  Newport, in common with almost all other councils in Wales, is being permitted to spend an additional 1.8 per cent. next year".
  That increase, he says,
  "is insufficient to meet the cost of pay and price inflation. … the pay review bodies are considering awards at over 3 per cent. for some groups of public service employees."
  Mr. Nippers goes on:
  "For Newport the permitted increase of 1.8 per cent. equates to approximately £2 million extra spending capacity."
  Of that, £450,000 goes to the new combined fire authority. That more expensive figure replaces what went to the former Gwent fire brigade. Some of us bitterly opposed the break-up of Gwent fire brigade. This is just another example of the Government's feckless handling of public finances and services in Wales.
  An additional £1 million or so goes in waste disposal charges for Newport,
  "arising from the enforced privatisation of our waste disposal service and the Government's new Landfill Tax,"
  says Mr. Nippers. One does not need to be an authority on local government finance to realise that there is precious little left to meet the cost of pay and price inflation for all Newport services, let alone any leeway to make improvements.
  Newport has a reputation as a well run council, with one of the lowest council tax levels, but its expenditure is capped so low that it has one of the worst primary school pupil-teacher ratios in Wales. Mr. Nippers says:
  "We are unable to maintain the current standard of our services despite major efficiency savings."
  Serious attempts are being made to reduce expenditure on all services and to give priority to the education service and social services. Education in Newport now seems to be in a desperate plight. Representatives of the council, teachers, governors and professionals in the education service wrote to the Secretary of State on 19 November last year, asking him to meet a small deputation to discuss the difficult situation. In his reply, the Under-Secretary of State for Wales, the hon. Member for Brecon and Radnor (Mr. Evans), said that such a meeting would serve little purpose.
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  A further letter has now been sent to the Secretary of State. I urge him to respond to Newport's pleas. With the arrival of the LG investment from Korea, with all its likely spin-offs, Newport needs perhaps above all else an efficient, well funded education service.
  All manner of cuts are now envisaged in other services, some affecting disadvantaged people. Home care, day care facilities, meals on wheels and school meals are all possible targets, as are school transport, clothing grants to pupils and student grants. One social services residential establishment may be forced to close. Grants to outside bodies are also under threat.
  Gwent theatre, for example, which does wonderful work in the community, could lose because of the Government's diktat, as could Newport Women's Aid. Newport's director of finance summed up the position, saying that the Secretary of State
  "has short-changed the new local authorities."
  I have represented Newport for the past 31 years. I say in all sincerity to the people of Newport, "Don't blame your local authority and its elected representatives for this situation. Put the blame squarely where it belongs—on this sadly discredited Conservative Government."
  My constituency straddles two authorities—Newport, which I have already referred to, and what is now known as Monmouthshire county council. Monmouthshire has recently been complimented by external auditors on its prudent financial decisions. It might be called a lean and well-managed authority, but it, too, has been put under great pressure by the RSG settlement.
  Monmouthshire county council covers a relatively prosperous area of Wales, but, as council leader Graham Powell pointed out to me, it is expected to provide the same level of services as any other, but with £11 million less than it would receive if it were funded at the Welsh average. A further irritant to the council was the decision of the Welsh Office to cut its provisional settlement by a further £423,000. The cuts will lead to an absurd situation, bringing about reductions in services, likely redundancies and increases in council tax. Is it any wonder that there is so much concern about the situation?
  That is not the whole story. The Government are cutting other aspects of local authority expenditure. Last Friday, my hon. Friend the Member for Newport, West (Mr. Flynn) and I were asked to meet the chairman of Gwent magistrates, Mr. David Turnbull, together with his vice-chairman and the clerk of the magistrates, Mr. Brian Forster. They told us of the difficulties they had experienced over the proposed building of a new magistrates court in Newport. It was to be built in a part of Newport that badly needs redevelopment. The area is known as the old coalyard site and is owned by Newport county borough council.
  Negotiations had reached an advanced stage when, under the new private finance initiative guidelines, on 29 July 1996, the Lord Chancellor notified the local council that the project was way down the list of new building schemes to be phased into a private building programme. That does not say much for the PFI method of financing public projects.
  The present magistrates court is in a 60-year-old building. There are no facilities for the disabled. Witnesses are not separated, due to inadequate facilities. Magistrates are concerned about their safety, because they have no separate entrance. Even possible new recruits to the bench have been deterred by the inadequate facilities.

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  If there is much further delay, the site could well be used for other purposes. I urge the Minister to notify the Secretary of State, as the principal spokesman for Wales, and ask him to intervene to get the project off the ground.
  The current position is most distressing. There should be a partnership between local government and central Government. Instead, after 18 years of Conservative government, local decision making has been eroded, and we have dictatorship from the centre. Local government should be given back the powers it has lost, and I trust that the incoming Labour Government will take early steps to bring that about.
  8.50 pm
  Mr. Elfyn Llwyd: This evening sees the annual ritual of special pleading by hon. Members who are concerned about the finances of their local authorities. However, our ritualistic complaining belies a serious problem—the precarious position of Welsh local authorities. Furthermore, their difficulties are no fault of their own. For the past five or six years, heavy expenditure cuts have been imposed on local government year on year. One is tempted to ask where it will all end.
  It is no secret that central Government view local government with distrust and even disdain. That could be because there are so few Tory-controlled councils in Wales. The process has continued for some 18 years, and the House has passed countless pieces of legislation curtailing the powers of local government. There have been more than 100 such measures in the past 18 years, in a steady, unrelenting erosion of local government powers and responsibilities.
  It is small wonder, therefore, that that has gone hand in hand with ever-deepening cuts in local government finance. The dead hand of central Government is truly upon local government, and it is time that we all realised what is happening.
  It has been said that, if we want people to act responsibly, we should give them responsibility. The corollary to that is that we have witnessed diminishing powers, financial support and morale in local government. This year's settlement, alas, is no exception to the general rule.
  Conservative Members may seek to intervene and make the point that some 80 per cent. of standard spending is provided by the Exchequer in comparison with a lower figure for England, but that simply underlines the fact that Welsh local government is even more in the ever-tightening grip of the Exchequer.
  Mr. Alex Carlile: Does the hon. Gentleman agree that, in the neighbouring parts of rural Wales that he and I represent, the big lie that local authorities are to blame for cuts in local services is no longer believed by anyone?
  Mr. Llwyd: That is absolutely true, and it will be further understood in the coming weeks and months, and rightly so. There is no doubt that, when people say that central Government have been judged unfairly, they are talking palpable nonsense. If central Government had even a modicum of respect for local government, they would redress that balance. I agree entirely with the hon. and learned Gentleman.
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  Welsh local authorities are responsible authorities—not for them flagship projects, but rather a real concern for the delivery of everyday essential services. Even the most basic ones are under threat from this year's settlement. When one meets representatives of local government, they often ask where the cuts will stop.
  My authority and that of my hon. Friend the Member for Caernarfon (Mr. Wigley) is a case in point. I met the chief executive of Gwynedd council last week. The picture he painted, although realistic, was a dismal one. I shall not repeat what the right hon. Member for Conwy (Sir W. Roberts) said earlier, as his figures were accurate.
  Put simply, the council requires £119.9 million in 1997–98. The spending limit set by the Secretary of State is £115.7 million, and the council will receive only 82 per cent. of that, or £95.3 million, in rate support grant. Therefore, the council will need to cut its budget by more than £4.2 million to meet the Secretary of State's figure.
  Should Gwynedd spend up to the maximum, £20.4 million would have to be raised from council tax, which would mean an increase of 11.3 per cent. The right hon. Member for Conwy made a reasonable argument. It would be totally unreasonable to expect the council to impose a large increase in council tax following a 25 per cent. increase last year. There is only so much that people can suffer in any part of Wales and throughout the British Isles.
  Thankfully, Gwynedd, like many other councils, received a special additional grant of nearly £2 million from the Welsh Office. However, that is for the current year, and it will not be available for 1997–98. Gwynedd has resolved to attempt to keep the council tax increase low, or at least to the average for Wales—between 8 per cent. and 9 per cent. There will be a shortfall of £4.5 million, and the council has resolved to make cuts amounting to £4 million and to find the remaining £500,000 from the balances.
  As it is a highly responsible authority, Gwynedd will seek to find as much as possible of the money for the deficit by cutting administration and seeking to be still more efficient. It must be remembered, however, that last year the same council cut £1 million in administrative costs, so the future will be bleak.
  The council has agreed that there should be a 6 per cent. cut over all departments, and some departments will have to face additional cuts. I do not like scaremongering, but Gwynedd is considering cutting teaching jobs, which account for a large part of the education budget. That will be inevitable.
  I am not trying to make unreasonable points, but Gwynedd will face cuts in teaching staff, leisure, culture, planning, highways and social services. There will be direct cuts of 3 per cent. in the school budgets, cuts in home care services and the closure of some homes for the elderly. The council will also be cutting its attempt to promote the local economy—something much heralded by the Secretary of State earlier, and rightly so. Unfortunately, Gwynedd will therefore have to reverse its enlightened policy in that regard.
  It grieves me that, as the hon. Member for Rhondda (Mr. Rogers) said, the least able people in society will come out worse in this spending round. Those with special needs, those who benefit from the community care budget, the elderly and the infirm will bear the brunt of

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  the cuts. Coupled with cuts in education, we are taking a retrograde step in many ways, about which I am very concerned.
  The Welsh Office settlement of 1.9 per cent. is, of course, below the rate of inflation—despite what the Secretary of State said. It seems that no effort is being made to ensure a fair, reasonable settlement for Welsh councils. In addition to the drastic cuts that Gwynedd faces to which I have referred, I am very concerned that it will have to make cuts in other areas that are yet to be decided. Such decisions will be made on 6 March.
  Another authority that impinges on my constituency and the constituencies of the hon. Member for Clwyd, North-West (Mr. Richards) and the right hon. Member for Conwy is Conwy borough council. I have recently spoken to members and officers of that council and been told that the council will have to find cuts totalling at least 6.5 per cent.—with no service protection—of this year's budget, amounting to £5.2 million.
  After taking into account pay inflation and other demands on services, a further cut of £2 million will have to be found to meet the capping target. There will have to be cuts of £2.4 million in education, £1 million in social services, £400,000 in highways expenditure and £1.4 million in other miscellaneous areas. I greatly regret that, inevitably, teaching posts are under threat.
  In addition, reductions in maintenance are planned, and, since the capital programme cannot sustain capitalisation of such costs for 1997–98, there will also be a cut of £500,000 from that source. It will not be possible to recognise fully increased demands on social services to offset the proposed cuts, which will result in proposals including increased charges for a wide range of services and reduced grants to the voluntary sector. Again, that will impinge on and affect the most needy people in our society.
  It is also envisaged that there will be early voluntary retirement, with staff not being replaced, increased charges, reductions in grounds maintenance, and so on. The balance of savings will undoubtedly be found through further job losses, more increases in charges, and reductions in services.
  The increase in the SSA does not seem to come anywhere near recognising demographic changes and normal inflationary pressure—ignoring the fact that no provision has been made for pay inflation. A late change in the SSA has resulted in Conwy borough council having to find even cuts than those anticipated, raising further questions about the SSA model and system. Adjustments in nursery vouchers will cause more problems. Additional aggregate external finance, although much heralded by the Secretary of State, is not a substitute for increased spending power.
  After it has saved £7 million, the council tax will be cut by 1 per cent.—not because the council chose to do that, but because more AEF has been put into the system. Conwy's director of finance concludes his submission to me by saying:
  "All in all, the 1997–98 RSG settlement has to be one of the worst ever settlements for local government and, therefore, the local taxpayers."
  In Ceredigion, the story for the council in the constituency of my hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Dafis) is equally
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  serious, with cuts totalling £4.2 million required to bring the budget to within 1 per cent. of the cash limit, and a projected serious loss of jobs—at least 40 to 45 in central departments, and an inevitable consequent decline in the level of service being offered. As one might expect from a cardi council, a responsible and cost-effective authority is being forced into providing a shoestring service to the public, which is very worrying for and damaging to ordinary people who live there.
  Mr. Cynog Dafis: I am grateful to my hon. Friend for drawing attention to the situation in Ceredigion. It is well understood in Ceredigion that the reduction of 1p in the standard rate of income tax is being paid for by the reduction in the level of service and an unreasonable increase in council tax. That will be worse next year if damping comes to an end without any compensatory increase through an adjustment in the SSA. Will he join me in requiring that the SSA must reflect the higher cost of service delivery in rural areas?
  Mr. Llwyd: I agree entirely—that is probably the system's biggest deficiency, and it needs addressing.
  Ynys Môn county council is also in a serious position. It will suffer an 11 per cent. cut in standard credit approval, and an 18 per cent. cut in housing. There will be cuts of 2.7 per cent. on the revenue side in education, meaning 20 teaching jobs lost; planning services will be cut by 6.6 per cent.; buses and public transport services will be cut and fares increased; public protection will be cut and public conveniences closed; road sweeping and beach cleaning will be cut; and there will be a 6.6 per cent. cut in social services. It has been decided that the council will try to protect children's services, but people with special needs will be badly hit. To say that the council is between a rock and a hard place is to understate the case.
  Mr. Llew Smith: I am sure that, like myself, the hon. Gentleman is totally opposed to public expenditure restraints or cuts, but will he accept that there is logic in the Government's position—that, if one accepts the convergence criteria for the single currency and the restrictions on public expenditure, that must show itself in the amount of money that goes to local authorities?
  Mr. Llwyd: I do not want to get into the European argument at this point.
  The nursery voucher scheme—ill judged and half-baked—will put further pressure on Ynys Môn's budget, and the much-heralded council tax reduction scheme has had little effect, adding nothing to the council's finances.
  The future is therefore extremely bleak. What is unacceptable is that those forced cuts come side by side with the second annual 1p income tax cut. Cutting taxes is fine when necessary services are protected, but can never be justified when education, social services and transport are being ceaselessly cut. The shadow Chancellor has said that he will abide by the present Budget for the next two years, so my question is: why vote Labour?
  The Labour party, in its craven urge for power, has sold out, and left thousands of Welsh people in its wake. I trust that the people of Wales will realise that they are being

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  sacrificed on the altar of Labour's dream of power. Labour has taken Wales for granted once too often, and the British Labour party has shown that it is far more interested in city types and the well-off of the south-east than in the ordinary working men and women of Wales.
  I trust that, when these dreadful and painful cuts are made throughout Wales, the Welsh people will realise that the British Labour party in Wales has no core values any more and no regard for the interests and well-being of the ordinary people of Wales. I trust that the people of Wales will realise that in the months to come.
  It is now clear to the people of Wales that there is only one serious party that opposes these cuts—Labour is not prepared to stand against them, and the Tories are hell-bent on making them. Both Labour and the Tories agreed to cut 1p off income tax last year and this year. We voted against that on principle.
  If the people of Wales want a party that is committed to protecting their interests, the choice is clear. If there is a Labour Government and an increase in Plaid Cymru representation in the House, we will bring pressure to bear to force the Labour party to think again about the interests of the people of Wales, which it is now selling down stream.
  9.7 pm
  Mr. Don Touhig: For the people of Wales in general, and for my constituency in particular, this financial settlement will prove to be severe in the extreme. It will have dramatic consequences for the level of services that Welsh local authorities provide, and it will mean that my constituents will pay more in council tax for a significantly reduced level of services.
  The services provided by local councils such as mine—the county borough of Caerphilly—are vital to sustain the very quality of life itself. When we step outside our front gate, we walk on a pavement provided by the local council; we drive our cars on roads maintained by the local council; our children—or those of most of us—are educated in schools built by the local council; we swim in leisure centre pools operated by the local council; and our elderly relatives receive meals on wheels in a scheme funded by the local council. All those services are now at risk.
  Yesterday the leader of Caerphilly county borough council, which cut £12 million from its budget last year, told me that it now faces a further £8.5 million cut in the coming financial year. That means that there will have been £20 million-worth of cuts in the first two years of the authority's existence. Cuts in school budgets in Caerphilly could cost up to 100 teaching jobs, class sizes will increase, and the school meals service is under threat. Young people wishing to go on to higher education may not receive the appropriate grants.
  I spent 20 years as a councillor before entering the House, and I have always supported and worked to protect the education service in particular. A council can cut a road programme; a town centre bypass may be deferred; motorists may be angered and frustrated, but at a later date the money may be found, the bypass will be built, and people will be satisfied. We cannot cut a child's education and put something back in five years' time. Yet that is the prospect that the children of the people I represent face in the coming year.
  890
  The social services in Caerphilly borough will have to make severe reductions in home care budgets, and those who depend on such services and already have to pay for some of them will face increased charges. There may be cuts in refuse collection services and reductions in council house repairs. Highways and grounds maintenance also face the axe. Despite all that, my constituents face a 15 per cent. hike in their council tax. Other hon. Members have mentioned the damping grant. Without such a grant, my constituents would face a 30 per cent. increase in their council tax this year.
  At Question Time last week, in reply to my hon. Friend the Member for Walsall, North (Mr. Winnick), the Prime Minister said:
  "we have the most successful economy, with the highest growth and the best inward investment record, in western Europe."—[Official Report, 28 January 1997; Vol. 289, c. 150.]
  My constituents' response to that will be to ask, "If the country is doing that well, why are we sacking teachers, cutting social services and asking the public to pay more for services?"
  I will tell my constituents why: we are paying the price for the failure of Tory economic policies over the past 18 years—policies which meant that billions of pounds of North sea oil revenue, and billions more pounds in income from the sale of former public utilities, were used not to invest in infrastructure, public services or our children's future, but to give tax-cutting bribes before each general election. There can be no clearer illustration of the failure of Tory economic strategy than the fact that the British people will now be paying more tax than they were when the Tories took office in 1979. The results of the failure to invest those billions of pounds in our country's future prosperity are now being seen throughout the country.
  In a recent report to Caerphilly councillors, chief officers said that the Secretary of State's announcements
  "paint a very bleak picture for all local authorities in Wales … It is inevitable that there will be severe reductions in both revenue and capital spending coupled with double figure increases in council tax."
  The problems faced by my local council can be summed up as follows. The standard spending assessment has been increased by 1.6 per cent. and the capping limit by 1.8 per cent.; yet Caerphilly county borough council believes that it needs an extra 6.5 per cent. in spending for the coming year. Why is that? It is because it faces, among other things, inescapable increases in expenditure arising from demographic and legislative changes.
  The council needs £118,000 next year because of increased pupil numbers. It needs £274,000 to comply with transport legislation, such as that on seat belts. It needs £60,000 to administer the nursery voucher scheme and £50,000 as a result of the Disability Discrimination Act 1995. It also needs £500,000 to implement additional legislation affecting social services, and £361,000 for the landfill tax.
  Instead, the council will have to make cuts of £8.5 million. Those cuts have yet to be determined in detail, but they will inevitably result in severe reductions across all departments, including sensitive front-line services provided by the education and social services departments, with the consequent loss of jobs. Even so, council tax increases are in prospect: 10 per cent. in the former Rhymney Valley district and 15 per cent. in the former borough of Islwyn. The non-housing capital

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  programme may be cut by 12 per cent., and the council house capital programme by 25 per cent. The urban aid and housing improvement grants scheme part of the capital programme may be cut by 35 per cent. Set against that, the true year on year increase in Government grant is but 2 per cent.—well below the rate of inflation. It stretches credulity to the limit, and it is impossible to reconcile that increase with Government's pronouncements which use terms such as "a good settlement" and "extra funding for education."
  I have no doubt that we shaill hear the same old hoary tale from Ministers that there is no need for councils to increase taxes, that the settlement is fair and that if taxes increase it is all the fault of local councils. I say to the Government what any Welsh housewife would say: "You can't spend what you haven't got." The plain fact is that the Tory Government dislike and distrust local government; that is why local government finances are now largely controlled by central Government.
  There are three ways in which the Government keep total control of local government finances. Central Government, not local government, now determine the level of public spending and the level of external finance available to support local councils' revenue budgets. Central Government, not local government, determine the maximum level of spend for local councils through the capping regime. Central Government, not local government, determine the allocation of borrowing approvals to finance capital expenditure. It is a case of the old saying, "He who pays the piper calls the tune."
  Given those controls, it is central Government, not local government, who must take responsibility for the key public services that my council is being forced to cut and for the hike in council tax. Very soon the public will have an opportunity to pass judgment on the Government. I believe that the people of Islwyn—who sent me here after a by-election two years ago in which the Tory candidate received 3.9 per cent. of the vote and lost his deposit—will have their day, like others across Wales who have suffered under the Tory Government. The Conservative party will pay a price at the polls for its failure to invest in public services. It will be a heavy price, but the Tories will richly deserve to pay it.
  9.16 pm
  Mr. Alex Carlile: I begin by apologising for being late for the beginning of the debate. My lateness was the exact equal of the lateness of one of the few direct trains from north Wales. The fact that it is direct does not make it punctual, and regular travellers on that route say that it is extremely rarely punctual. That is just another symptom of what has happened to us in recent years.
  I suspect that many of us taking part in the debate feel a sense of deja vu or even of deja vu upon deja vu. We have all been here before, year after year, talking about the Tories' meanness in the local government settlement. This debate is a distant democratic fiction to the people who live in Montgomeryshire, which I represent, in the area represented by the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) and perhaps in every other part of Wales. Here we are, supposedly democratically discussing the local government settlement for Welsh
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  communities, without the power to amend it, to examine it in Committee or to scrutinise it in any meaningful way. We have the power to put forward in a few minutes—as we all do, understandably—the views of our constituents, but without the expectation of being listened to.
  When I leave this House, as I shall in a few weeks—
  Mr. Richards: Hear, hear.
  Mr. Carlile: The hon. Member for Clwyd, North-West (Mr. Richards) has abuse in his nature. One of the most offensive things about this House is having to sit opposite him and watch him perform in that revolting way. He is an insult to the intelligence. However, I will return to the subject of the debate, Mr. Deputy Speaker.
  Many people in Wales cannot reconcile the fact that they elect councillors and Members of Parliament but apparently have no power whatever—even by logical argument—to influence the outcome of the Government's deliberations as to what local services they are provided. The fact that 90 per cent. of local government finance is provided by central Government is very bad for local government and for democracy in Wales. I am pleased to say that I belong to a party which has always believed that less money should come from central Government and more money should be raised by local taxation, for which locally and regionally elected representatives would be accountable and for which they would answer to their electorate. Surely that is the only logical way of providing democratic local government and making it possible to debate these issues seriously.
  I am puzzled by the Government's performance. They tell us that the economy is so successful that we have reached a new prosperity. They tell us that such has been the outstanding ability of the Government that we can have income tax cuts, but with the other hand they are taking away local services. In the rest of my speech I shall tell the House what constituents say to me about the results of the rate support grant settlement.
  Mr. Rogers: The hon. and learned Gentleman has advanced the novel idea that local government should be the collector of taxation for central Government. He should bear in mind the fact that most of the functions that local authorities perform are imposed on them by central Government.
  Mr. Carlile: The way in which those functions are performed by local government is very much a local issue, and in common with most of our partners in Europe I believe that raising local taxes—such as a local income tax—to pay for local facilities is much more logical than the bizarre system that we have in this country. No doubt we shall be arguing that case in future.
  I was about to tell the House what people are saying in rural Montgomeryshire, in rural Powys, about the effect of the settlement. They tell me that there is less money for the elderly and for people with learning difficulties, for the mentally ill and for all those who need assistance from their local council.
  The two learning difficulties hospitals in my constituency, Bryn Hyfryd and Llys Maldwyn, are to close shortly. It is right that they should close, but the people with nursing qualifications who have skilfully looked after patients at those hospitals rarely obtain jobs

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  in the new facilities to which those people are sent. It is absurd—even offensive—that the people who have learnt over years the skill of dealing with problems such as bedsores and other physical ailments will no longer be able to provide such nursing care to the people who in the past were judged to need it. The reason? There is not enough money to employ them.
  Rural roads are also affected by the settlement. Like many hon. Members, I had some farmers to dinner at the House last night. Almost the first thing that they complained about was the condition of the roads and the way in which it has been affecting dairy farmers this year. It is illustrated by human situations such as the fact that in Powys more milk tankers have skidded off the road this year than last year because there is less money for gritting roads. That is a real effect on people, and it is quite cynically determined by the Government.
  Schools are being forced into a vicious circle by the rate support grant settlement. In Newtown in my constituency, the high school, which is far from being one of the worst schools in Wales—it has a pretty good record on the whole—is being forced to cut teachers, partly because many parents are sending their children to more distant high schools which they have chosen. However, as teachers are lost from Newtown high school, the school will inevitably suffer further difficulties, which will make it less popular among parents, and so it goes on. As a result, the high school in the biggest town in my constituency will be forced to become a poorer school, despite the fact that its head teacher has a clear sense of direction.
  The contribution made by local government to police and fire services means that they are less able to purchase new technology such as closed-circuit television—which country towns now unfortunately need because of the increase in violent crime—so we have a reduction in our quality of life.
  As for other forms of crime prevention, traditionally we have had a good level of probation services throughout north and mid-Wales, but probation services are now running hard even to stand still. A more realistic picture is probably that they are now going backwards and are less able to provide the sort of support services that are needed and which lead to crime prevention.
  The real poor relation of local government is consumer protection and trading standards. As it happens, in my legal practice over the past 25 years I have been heavily involved in matters concerning the application of false trade descriptions and other related issues. Even 10 years ago, most Welsh counties could provide a high quality trading standards and consumer protection service. It is now a Cinderella service, and whose fault is that? It is the fault of the Government.
  Those are real examples of what real people in Wales—not Ministers blustering from the Dispatch Box at the end of a short debate—see as happening as a result of Government policies. I suspect that, after all these years of Conservative government, the Conservative party has probably visited defeat on itself. There is now a mindset among many people which says that so much has been cut that, whether they like the Conservative party or not—I suspect that most of them do not, and rightly so—there must be a change of Government, because the balance has gone too far in the other direction.
  9.26 pm
  Mr. Rod Richards: The local government settlement was made in a tight financial climate. Given the circumstances, it was fair, and we must remember that all local authorities in Wales agreed to it. As several Opposition Members have said, although the economy is now going strongly and is the strongest in Europe, we must bear it in mind that we have recently come out of a deep recession. The public sector borrowing that was required to maintain services at an acceptable level at that time must be repaid in times of plenty, and those are the circumstances in which the local government settlement has been made.
  I therefore compliment my right hon. Friend the Secretary of State on the settlement that he achieved with the local authorities and on his presentation this afternoon. It was in contrast to the presentation of the hon. Member for Caerphilly (Mr. Davies), who I notice has just scuttled out of the Chamber before I reach the key point in his speech—[HON. MEMBERS: "He is here."] He has scuttled to the Back Benches, where he expects to be after the general election.
  The hon. Gentleman gave a poor presentation. Indeed, I could have found a much better debate had I gone to Caerphilly Co-op, but that is another matter. He said that, if there were a Labour Government, they would not break the expenditure totals in Wales in their first year in office. Even though pressed by my right hon. Friend the Secretary of State, the hon. Member for Caerphilly would give no such assurance for the second year of a Labour Government. I invite the hon. Gentleman to make his position clear. He said that an incoming Labour Government would not break the expenditure total in Wales in their first year. Is that the case in the second year—yes or no? I invite the hon. Gentleman to say so now.
  The hon. Gentleman has declined my invitation. The right hon. Member for Dunfermline, East (Mr. Brown) has made it clear that an incoming Labour Government would stick to the Government's expenditure targets for two years. Does the hon. Member for Caerphilly want me to write to the right hon. Member for Dunfermline, East to tell him that there is a breakaway movement in Wales, and that the hon. Gentleman refuses to give such an assurance? I again invite the hon. Gentleman to make his position on Wales clear. Is it the same as the position stated by the right hon. Member for Dunfermline, East for the rest of the United Kingdom?
  The hon. Gentleman may laugh, but the right hon. Member for Dunfermline, East may not. If the hon. Gentleman intends to break the Government's expenditure targets for the second year, and the right hon. Gentleman intends to stick to his statement, the subvention to Wales from England would be increased, which would mean a cut in Government expenditure in England. Is that what the hon. Member for Caerphilly intends? Does he or does he not agree with the right hon. Member for Dunfermline, East that he will stick to the expenditure target in Wales in the second year?
  It is evident that the hon. Member for Caerphilly is once again out on a limb in relation to his party leadership. I am sure that we shall return to the matter, and I assure him that I shall return to it when the right hon. Member for Dunfermline, East is occupying the Opposition Front Bench.
  9.32 pm
  Mr. Donald Anderson: It is a sad fact that, when there are two routes to a political destination—the high road and the low road—the hon. Member for Clwyd, North-West (Mr. Richards) will invariably choose the low road.
  I shall make but one general point and one point in relation to my constituency. On the general point, of course there is a ritual in these debates: as they sink to their knees, Conservative Members say that we have never had it so good and that Wales is fortunate to have a Secretary of State who has brought back the goods yet again; we point out that, at local level, there is an impact on the services that our people properly expect.
  The political context in which we now operate is that there has been an almost complete meltdown in Conservative representation in local government in Wales, so the Government do not have a constant reminder of how the folks at local level are feeling the effect of cuts. The Government live in a vacuum, away from where ordinary folks live, move and have their being. After the general election, there may well be such a meltdown at central Government level in Wales, and there will be no one from Wales on the Conservative side of the House.
  I agree with the hon. and learned Member for Montgomery (Mr. Carlile) about one clear fact that I appreciate after many years in the House. In spite of the Government's public relations efforts, the people of Wales point the finger of blame not at their local authorities—which are all non-Conservative—but at central Government. They realise who are the real villains of the piece. They see the reduction in the proportion of rate support grant for local government spending from two thirds in 1993–94 to just over a half now, and the real cuts of 25 per cent. in housing renovation grants over the past three years. Housing capital provision has been cut by a quarter in the past three years. The people of Wales see the impact of the Government's policies in the failure of councillors to provide much-needed services—for example, ridding houses of damp and providing affordable housing for their sons and daughters.
  The settlement will impact on Swansea city and county council, which will have to increase council tax by 5 per cent.—4 per cent. of which is a result of damping for the rest of Wales. That is only part of the new burden that the Government have imposed on local authorities. My council faces more than £1 million in additional expenditure as a direct result of legislative changes for which it was not allocated resources. For example, the landfill tax has meant a net expenditure increase of £500,000, and an expensive reorganisation of the fire service has occurred against the wishes of the local authority. That is a double whammy; the council did not want those policies, but must now deal with their financial effects.
  The pay increase for teachers looms. The budget does not take it into account, although it will have a substantial impact on local government expenditure. The settlement will mean a loss of about 175 teaching posts in my constituency, and the £11 million reduction will mean cuts in school budgets, home helps and road maintenance work.
  896
  There is intense anger in my city because the Government have approved no new transport schemes. That has had a disastrous effect on Hafod in my constituency, which will suffer as a result of the failure to complete the Swansea valley route. Real spending cuts are perceived by the Welsh electorate as a direct result of Government policy, not the fault of local councillors. They will adversely affect the services that our people expect. The Chancellor's claim that things are good will be met with the cry from the Welsh electorate, "If things are so good, why are they so bad for us and for local government services?"
  9.36 pm
  Mr. Barry Jones: I look back fondly to the tenure of my right hon. and learned Friend the Member for Aberavon (Mr. Morris) as Secretary of State for Wales. The shadow Secretary of State for Wales, my hon. Friend the Member for Caerphilly (Mr. Davies), made a shrewd speech tonight, and I am happy to support his remarks. I think that my hon. Friend the Member for Newport, East (Mr. Hughes) made the essential debating point when he said that, within a generation—little more than 20 years—two great reforms of local government were enacted, and the latter reform was totally under-resourced. Those local government reforms were very costly, and their consequences will be apparent for years to come.
  I had hoped that the settlement would allow my county of Flintshire to avoid cutting education resources. The council leader, deputy leader and chairman of finance are anxious about the prospect of losing teacher posts. I know that headmasters, staff, governors and parents in my constituency do not want to lose one teacher—they want more, not fewer, teachers.
  The housing scene is a battlefield as a consequence of the Secretary of State's cuts. I had hoped that he would release more council house sales receipts, which would generate extra jobs for those who repair and modernise homes in my constituency and throughout Wales.
  I emphasise that point, because the poor and the elderly had an extremely rough time during the desperately cold weather that we suffered at the turn of the year. Tens of thousands of houses throughout the Principality were very cold and almost impossible to live in. Those homes require double glazing and new doors, and the whole housing fabric needs to be modernised. The Secretary of State should have made that a priority when he arrived at this grant settlement.
  I believe that, when the day comes, the Welsh people will take electoral revenge, unprecedented in its savagery.
  9.39 pm
  Mr. Win Griffiths: We have had a wide-ranging debate, in which my hon. Friends the Members for Rhondda (Mr. Rogers), for Blaenau Gwent (Mr. Smith), for Newport, East (Mr. Hughes), for Islwyn (Mr. Touhig), for Swansea, East (Mr. Anderson) and for Alyn and Deeside (Mr. Jones) graphically explained why the local government settlement will result in deep cuts in services, while at the same time forcing local authorities to increase their council taxes beyond the rate of inflation.
  The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) and the hon. and learned Member for Montgomery (Mr. Carlile) described the way in which

  897
  their authorities were savagely affected by the local government settlement. The hon. Member for Meirionnydd Nant Conwy spoilt his remarks by his unjustified attack on the Labour party's desire to seek power for the betterment of everyone and not just the few, which is a characteristic of the Government's policies.
  Unfortunately, the contributions of the hon. Members for Vale of Glamorgan (Mr. Sweeney) and for Clwyd, North-West (Mr. Richards) and that of the right hon. Member for Conwy (Sir W. Roberts) were characterised by an unnecessary and unjustified attack on my hon. Friend the Member for Caerphilly (Mr. Davies). The personal abuse that one or two Conservative Members sought to pile on him was totally unjustified, because he was showing clearly the dramatic effects that the settlement will have on the provision of services in Wales.
  It is all very well for the Secretary of State to talk about the thousands of millions of pounds and the increases of 2.6 or 2.3 per cent. that he has obtained, and about the wonderful job that is being done—his hon. Friends duly backed him up. My hon. Friends the Members for Islwyn and for Swansea, East contrasted his talk about the dynamic, thriving, prospering and wealthy economy of Wales with the impact that the settlement will have on people in Wales.
  The rate of increase of the settlement is lower than the inflation rate. It is part of the plan to continue to reduce the revenue support grant and central Government support for local government. In the past three years, the revenue support grant has lost its real value by 7.1 per cent. With the savage capping criteria on top of that—except for last year—virtually every council in Wales has had to increase its council tax above the rate of inflation.
  I carried out a survey to which 19 local authorities in Wales responded. In 12 of those 19, the council tax D band was being increased by between 3.5 and 15 per cent. A further four authorities were facing small increases, and three were making cuts, which, perversely, because of the capping criteria, also meant that they were having to cut the services that they provide to their people. This year's local government settlement really is a mess.
  Let us look at the impact on the budget, and on services. Many local authorities are trying to protect schools budgets. Six are increasing them; seven have made sure that schools budget cuts are less than the cuts covering the whole authority. My authority of Bridgend will suffer a 2 per cent. cut in the schools budget, but there will be cuts of more than 6 per cent. in other departments. All that is being forced on authorities by the settlement that has been foolishly lauded by some Conservative Back Benchers.
  According to the survey, 12 authorities estimated that they were likely to lose about 770 teachers. Four thought that they would have no losses; three had not yet settled the matter, and from three I had no information, but, having looked at press reports, I counted another 299 possible teacher job losses. That amounts to well over 1,000. Not all those losses may come to pass, of course, because some schools may choose to use some of their reserves to keep teachers in post for another year. Nevertheless, class sizes are increasing.
  The Welsh Office's own figures show that in 1992, when the Prime Minister was re-elected, 56,411 children in mainstream primary schools in Wales were in classes of more than 30. In the last year for which figures are
  898
  available, 1995–96, the figure had risen to 69,873. That is an increase of 24 per cent., or more than 13,000 children. That is how efficiency gains are secured in education: more children have to be put in front of teachers. There has been a reduction in the teaching work force, while the number of pupils has increased.
  It is not just a case of increases in class sizes, however. Local authorities have not enough money for school maintenance or school security: the Government are not providing any additional funds. Transport costs are also a problem. We are told by the office of Her Majesty's chief inspector that the teaching of Welsh is hampered by a lack of resources, and we are told by the National Confederation of Parent-Teacher Associations that teachers and parents in England and Wales are raising more than £100 million a year for books and equipment. The nursery voucher rule changes have had an adverse effect on many Welsh authorities.
  There has been a 20 per cent. increase in pupils with statements in respect of special educational needs. Other costs relate to the teachers' pay award, early retirement, the increasing number of free school meals, the requirements of the national curriculum, school transport, the Welsh Language Act 1993, the code of practice, changes in the superannuation rules and the administration of nursery vouchers. All that amounts to a bill of nearly £80 million, but the Government have taken no account of it.
  Housing is also affected. There has been a 24 per cent. real-terms cut in housing renovation grants since 1994–95, and an 18 per cent. cut since last year. There has been a 24.5 per cent. real-terms reduction in housing capital provision over that three-year period, and a 16 per cent. cut since last year. As for homelessness, since 1979—surprise, surprise—the number of cases of people being accepted as homeless in Wales has nearly doubled, from just over 4,500 to just over 9,000.
  Local authorities have a direct interest in housing association budgets, because of allocation policies. In December 1995, the Secretary of State said that he was giving Tai Cymru a social housing grant of £85 million, which would "globalise" into £150 million with private sector finance. Last December, he said that he was giving Tai Cymru £60 million, which would "globalise" into £100 million, yet in both years there were going to be 3,000 housing starts with 50 per cent. less money available. The right hon. Gentleman obviously needs to go into housing when he completes his time in Parliament after the next general election.
  The fire service in south Wales is badly underfunded. It has problems over the pension scheme. The number of call-outs has been increasing annually at 10 per cent. Capital needs are not being met. It is going to have great difficulty in providing the high service level that is needed, particularly when its training needs under the Health and Safety Executive improvement notice will cost more than £1 million a year for the next five years, and that was following the tragic deaths of two firemen in Blaina. I would have thought that the Government would make provision for those needs, but they plainly have not.
  I hope therefore that, even at this stage, the Government will reconsider the total of Welsh Office expenditure and decide that there is a case for giving greater priority to education and other local government services that are provided for people in Wales.
  9.50 pm
  The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones): I am grateful for the welcome that has been given to the settlement by my right hon. Friend the Member for Conwy (Sir W. Roberts) and by my hon. Friends the Members for Vale of Glamorgan (Mr. Sweeney) and for Clwyd, North-West (Mr. Richards). I even wish to note a rare appearance by the hon. and learned Member for Montgomery (Mr. Carlile).
  The debate has removed what little credibility Opposition Members had. The hon. Member for Bridgend (Mr. Griffiths) argues that a settlement that increases money for local government, providing councils with £1,000 per person to spend and £880 per person in grants to support that spending, is wholly inadequate, yet we are told that there would be no increase in public spending under a Labour Government. When the hon. Member for Caerphilly (Mr. Davies) is asked how much extra he would give local government, he cannot or will not answer. Nor will he tell the House what other expenditure he would cut to give local government more, so as to stay within the reported spending plans of the right hon. Member for Dunfermline, East (Mr. Brown). We must not forget that funding for a Welsh assembly would also have to be found.
  Concerns have been expressed about the council tax level and the iniquities of the capping system without any explanation of how council tax and public expenditure would be controlled if capping were abandoned. My right hon. Friend the Member for Conwy speculated on the cost in increased spending and increased council tax. I hesitate to give him an answer on that point. I fear that the sky would be the limit, with Labour local authorities let loose, but I rush to agree with him about the consequences of business rates again being the property of local authorities, as the Labour and Liberal parties want. The rates are going up only 2.2 per cent. this year, and that is for one fifth of small businesses. The rates of the other four fifths are being frozen. We can imagine how much rates would go up otherwise.
  My right hon. Friend the Secretary of State for Wales has made it clear that he is providing £16.6 million to limit council tax increases to 15 per cent. The majority of council tax increases will be considerably lower than that. I noticed that the hon. Member for Blaenau Gwent (Mr. Smith) was rightly concerned about unemployment and other social factors in his constituency. I was surprised that he did not welcome the £4 million to damp the increase that his council is imposing on his constituents. After all, the average Welsh council tax for 1997–98 should be about £200 less than in England, but, at 88 per cent. of total standard spending, Government support in Wales is already proportionately higher than in England and in Scotland.
  Governments who adopt a prudent approach to public finances cannot operate on the basis of wish lists. That is the only way in which to describe Opposition Members' arguments tonight. As my hon. Friend the Member for Vale of Glamorgan reminded us, the obvious implication of their arguments is increased total standard spending, increased spending unstrained by capping and increased central Government support to keep down council tax levels. If the hon. Member for Caerphilly has any sums, I have to conclude that they do not add up, and the best thing we could do is give him a nursery voucher.
  900
  The nursery voucher scheme has been criticised. The scheme furthers our commitment to parental choice and it does not disadvantage local government. Local authorities still retain the discretion to provide pre-school nursery education for four-year-olds, but will benefit from the receipt of voucher income. If parents are content with the provision that is being offered by the maintained sector, there is every reason to suppose that they will send their children to council-owned establishments. There is already evidence to suggest that some local education authorities in Wales are expanding their provision.
  The Government's decision to base the nursery voucher adjustment base budgets on the populations of one to four-year-olds in local authority areas rather than on the number of four-year-olds in maintained schools was taken only after two separate consultation exercises. Local authorities differed in their views on the most appropriate basis, but the majority of responding authorities took the view that the adjustment should be based on the one-to-four-year-old population. That is in line with the needs indicators that are used for under-fives in the standard spending assessment formula that was agreed by the Welsh Consultative Council on Local Government Finance and it avoids penalising authorities that have chosen to invest in nursery education.
  The hon. Members for Newport, East (Mr. Hughes) and for Alyn and Deeside (Mr. Jones) spoke about education. I am reminded of Labour's stunt today of claiming that 1,000 teachers are to be sacked in Wales. That was a unique criticism by Labour of Labour councillors in Wales. There are exceptions, but they are the people making the decisions. The hon. Member for Rhondda (Mr. Rogers) was concerned about 100 teachers being sacked in his authority, but I fear that he is out of date. He should have read Saturday's Western Mail, because it stated that his council is seeking not to do that. If Rhondda Cynon Taff, Denbighshire and Carmarthenshire can seek to ensure that no teachers are sacked, why should any local authority in Wales choose to make sacking its priority?
  I tried to intervene on the hon. Member for Caerphilly because I wanted to question him on statistics that he quoted. He said that local government spending over the years had gone up by only 43 per cent. and that education spending had gone up by only 36 per cent. If he had understood his own statistics, he would have recognised that he was giving evidence of cuts in education that have been inflicted by Labour councillors in Wales. He said that he wanted to help young people. I wanted to ask him why, if he is sincere in that, he does not join in condemning Labour councillors whose first priority is to cut the number of teachers. It is Labour's sacred cows that we should be sacrificing, not our children's future.
  My right hon. Friend the Member for Conwy was concerned about representation on the police formula working group. I happily tell him that I welcome such representation and that it is also welcomed by the Home Office. It is now a matter for Welsh authorities to take forward with their colleagues in the convention of local police authorities. Since 1 April, spending on the police in Wales has gone up by some 20 per cent. Before that date, spending was set by county councils, usually Labour. For some, the change over the past two years has been a rescue, especially in south Wales, because Labour starved the police of funding. The chief constable of south Wales has spoken about the extra officers that he could

  901
  take on with the money that he has available. The commander of the Vale division has been able to point out how he has reduced crime because of extra officers in the Vale of Glamorgan.
  I recently attended a demonstration of the closed circuit television that is operated by the police in Cardiff city centre and I soon realised the desirability of extending that facility. On two successive Saturdays, schoolboys from Llanishen high school were robbed in arcades in Cardiff. I must not exaggerate the point, but my son was one of the schoolboys who were robbed. All that reinforces the fact that we were right to take over the funding of the police in Wales from Labour councils, which starved them of money.
  The settlement is a prudent but right package that will enable local government to maintain essential functions, if they act responsibly and cost effectively. The hon. Member for Caerphilly has called it unfair and inadequate, but he offered no policy in its stead. We heard a diatribe about failed economic policies. I shall not reply at the same length, but if the hon. Gentleman is concerned to improve the economy how could he dare to impose the social chapter, the minimum wage, the Welsh assembly and all the other job-destroying policies of his party?
  Let us consider the difference between what Labour says and what it does when it has power. Labour claims that education has priority, but it cuts teachers. It professes to be interested in law and order, but it starves the police of money. Labour says one thing, but it does another. It is hypocrisy to such an extent that Labour Members cannot even control their own temporal lobes. The Government are presenting the right settlement to the House today, in stark contrast to the absence of policy from the Opposition. I commend it to the House.
  Question put:—
  The House divided: Ayes 304, Noes 251.

  Division No. 67]

  [9.59 pm

  AYES

  Ainsworth, Peter (E Surrey)

  Boyson, Sir Rhodes

  Aitken, Jonathan

  Brandreth, Gyles

  Alexander, Richard

  Brazier, Julian

  Alison, Michael (Selby)

  Bright Sir Graham

  Allason, Rupert (Torbay)

  Brooke, Peter

  Amess, David

  Brown, Michael (Brigg Cf'thorpes)

  Arbuthnot, James

  Browning, Mrs Angela

  Arnold, Jacques (Gravesham)

  Bruce, Ian (S Dorset)

  Ashby, David

  Budgen, Nicholas

  Atkinson, David (Bour'mth E)

  Burns, Simon

  Atkinson, Peter (Hexharn)

  Butcher, John

  Baker, Kenneth (Mole V)

  Butler, Peter

  Baldry, Tony

  Butterfill, John

  Banks, Matthew (Southport)

  Carlisle, John (Luton N)

  Banks, Robert (Harrogate)

  Carlisle, Sir Kenneth (Linc'n)

  Bates, Michael

  Carttiss, Michael

  Batiste, Spencer

  Cash, William

  Bellingham, Henry

  Channon, Paul

  Bendall, Vivian

  Chapman, Sir Sydney

  Beresford, Sir Paul

  Clappison, James

  Biffen, John

  Clark, Dr Michael (Rochf'd)

  Body, Sir Richard

  Clarke, Kenneth (Rushcliffe)

  Bonsor, Sir Nicholas

  Clifton-Brown, Geoffrey

  Booth, Hartley

  Coe, Sebastian

  Boswell, Tim

  Colvin, Michael

  Bottomley, Peter (Eltham)

  Congdon, David

  Bottomley, Mrs Virginia

  Conway, Derek

  Bowden, Sir Andrew

  Coombs, Simon (Swindon)

  Bowis, John

  Cope, Sir John

  902

  Cormack, Sir Patrick

  Higgins, Sir Terence

  Couchman, James

  Hill, Sir James (Southampton Test)

  Cran, James

  Hogg, Douglas (Grantham)

  Currie, Mrs Edwina

  Horam, John

  Curry, David

  Hordern, Sir Peter

  Davies, Quentin (Starrf'd)

  Howard, Michael

  Davis, David (Boothferry)

  Howell, David (Guildf'd)

  Day, Stephen

  Howell, Sir Ralph (N Norfolk)

  Deva, Nirj Joseph

  Hughes, Robert G (Harrow W)

  Devlin, Tim

  Hunt, David (Wirral W)

  Dicks, Terry

  Hunt, Sir John (Ravensb'ne)

  Dorrell, Stephen

  Hunter, Andrew

  Douglas-Hamilton, Lord James

  Hurd, Douglas

  Dover, Den

  Jack, Michael

  Duncan, Alan

  Jackson, Robert (Wantage)

  Duncan Smith, Iain

  Jenkin, Bernard (Colchester N)

  Dunn, Bob

  Jessel, Toby

  Durant, Sir Anthony

  Johnson Smith, Sir Geoffrey

  Dykes, Hugh

  Jones, Gwilym (Cardiff N)

  Eggar, Tim

  Jones, Robert B (W Herts)

  Elletson, Harold

  Jopling, Michael

  Emery, Sir Peter

  Kellett-Bowman, Dame Elaine

  Evans, David (Welwyn Hatf'ld)

  Key, Robert

  Evans, Jonathan (Brecon)

  King, Tom

  Evans, Nigel (Ribble V)

  Kirkhope, Timothy

  Evans, Roger (Monmouth)

  Knapman, Roger

  Evennett, David

  Knight, Mrs Angela (Erewash)

  Faber, David

  Knight, Greg (Derby N)

  Fabricant, Michael

  Knight, Dame Jill (Edgbaston)

  Fenner, Dame Peggy

  Knox, Sir David

  Reid, Barry (Isle of Wight)

  Kynoch, George

  Fishburn, Dudley

  Lait, Mrs Jacqui

  Forman, Nigel

  Lamont, Norman

  Forsyth, Michael (Stirling)

  Lang, Ian

  Forth, Eric

  Lawrence, Sir Ivan

  Fowler, Sir Norman

  Legg, Barry

  Fox, Dr Liam (Woodspring)

  Leigh, Edward

  Fox, Sir Marcus (Shipley)

  Lennox-Boyd, Sir Mark

  Freeman, Roger

  Lester, Sir Jim (Broxtowe)

  French, Douglas

  Lidington, David

  Fry, Sir Peter

  Lilley, Peter

  Gale, Roger

  Lloyd, Sir Peter (Fareham)

  Gallie, Phil

  Lord, Michael

  Gardiner, Sir George

  Luff, Peter

  Garel-Jones, Tristan

  Lyell, Sir Nicholas

  Garnier, Edward

  MacGregor, John

  Gill, Christopher

  MacKay, Andrew

  Gillan, Mrs Cheryl

  Maclean, David

  Goodlad, Alastair

  McLoughlin, Patrick

  Goodson-Wickes, Dr Charles

  Madel, Sir David

  Gorman, Mrs Teresa

  Maitland, Lady Olga

  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

  Mayhew, Sir Patrick

  Hamilton, Neil (Tatton)

  Mellor, David

  Hampson, Dr Keith

  Merchant, Piers

  Hanley, Jeremy

  Mitchell, Andrew (Gedling)

  Hannam, Sir John

  Mitchell, Sir David (NW Hants)

  Hargreaves, Andrew

  Moate, Sir Roger

  Harris, David

  Monro, Sir Hector

  Haselhurst, Sir Alan

  Montgomery, Sir Fergus

  Hawkins, Nick

  Needham, Richard

  Hawksley, Warren

  Nelson, Anthony

  Hayes, Jerry

  Neubert, Sir Michael

  Heald, Oliver

  Newton, Tony

  Heath, Sir Edward

  Nicholson, David (Taunton)

  Heathcoat-Amory, David

  Norris, Steve

  Hendry, Charles

  Onslow, Sir Cranley

  Heseltine, Michael

  Oppenheim, Phillip

  Hicks, Sir Robert

  Ottaway, Richard

  903

  Page, Richard

  Stewart, Allan

  Paice, James

  Streeter, Gary

  Patnick, Sir Irvine

  Sumberg, David

  Patten, John

  Sweeney, Walter

  Pattie, Sir Geoffrey

  Sykes, John

  Pawsey, James

  Tapsell, Sir Peter

  Peacock, Mrs Elizabeth

  Taylor, Ian (Esher)

  Pickles, Eric

  Taylor, John M (Solihull)

  Porter, David

  Taylor, Sir Teddy

  Portillo, Michael

  Temple-Morris, Peter

  Powell, William (Corby)

  Thomason, Roy

  Rathbone, Tim

  Thompson, Sir Donald (Calder V)

  Redwood, John

  Thompson, Patrick (Norwich N)

  Renton, Tim

  Thornton, Sir Malcolm

  Richards, Rod

  Townend, John (Bridlington)

  Riddick, Graham

  Townsend, Sir Cyril (Bexl'yh'th)

  Rifkind, Malcolm

  Tracey, Richard

  Robathan, Andrew

  Trend, Michael

  Roberts, Sir Wyn

  Trotter, Neville

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

  Twinn, Dr Ian

  Robinson, Mark (Somerton)

  Vaughan, Sir Gerard

  Roe, Mrs Marion

  Viggers, Peter

  Rowe, Andrew

  Waldegrave, William

  Rumbold, Dame Angela

  Walden, George

  Ryder, Richard

  Walker, Bill (N Tayside)

  Sackville, Tom

  Waller, Gary

  Sainsbury, Sir Timothy

  Ward, John

  Scott, Sir Nicholas

  Wardle, Charles (Bexhill)

  Shaw, David (Dover)

  Waterson, Nigel

  Shaw, Sir Giles (Pudsey)

  Watts, John

  Shephard, Mrs Gillian

  Wells, Bowen

  Shepherd, Richard (Aldridge)

  Wheeler, Sir John

  Shersby, Sir Michael

  Whitney, Sir Raymond

  Sims, Sir Roger

  Whittingdale, John

  Skeet, Sir Trevor

  Widdecombe, Miss Ann

  Smith, Sir Dudley (Warwick)

  Wiggin, Sir Jerry

  Smith, Tim (Beaconsf'ld)

  Wilkinson, John

  Soames, Nicholas

  Willetts, David

  Speed, Sir Keith

  Wilshire, David

  Spencer, Sir Derek

  Winterton, Mrs Ann (Congleton)

  Spicer, Sir Jim (W Dorset)

  Winterton, Nicholas (Macdesf'ld)

  Spicer, Sir Michael (S Worcs)

  Wolfson, Mark

  Spink, Dr Robert

  Wood, Timothy

  Spring, Richard

  Yeo, Tim

  Sproat, Iain

  Young, Sir George

  Squire, Robin (Hornchurch)

  Stanley, Sir John

  Tellers for the Ayes:

  Steen, Anthony

  Mr. Matthew Carrington

  Stern, Michael

  and Mr. Anthony Coombs.

  NOES

  Abbott, Ms Diane

  Blunkett, David

  Adams, Mrs Irene

  Boateng, Paul

  Ainger, Nick

  Bradley, Keith

  Ainsworth, Robert (Cov'try NE)

  Bray, Dr Jeremy

  Allen, Graham

  Brown, Gordon (Dunfermline E)

  Alton, David

  Brown, Nicholas (Newcastle E)

  Anderson, Donald (Swansea E)

  Burden, Richard

  Armstrong, Ms Hilary

  Byers, Stephen

  Ashton, Joseph

  Caborn, Richard

  Austin-Walker, John

  Callaghan, Jim

  Banks, Tony (Newham NW)

  Campbell, Mrs Anne (C'bridge)

  Barnes, Harry

  Campbell, Menzies (Fife NE)

  Barron, Kevin

  Campbell, Ronnie (Blyth V)

  Battle, John

  Campbell-Savours, D N

  Bayley, Hugh

  Canavan, Dennis

  Beckett, Mrs Margaret

  Cann, Jamie

  Beggs, Roy

  Carlile, Alex (Montgomery)

  Beith, A J

  Chidgey, David

  Bell, Stuart

  Chisholm, Malcolm

  Benn, Tony

  Clapham, Michael

  Bennett, Andrew F

  Clarke, Eric (Midlothian)

  Benton, Joe

  Clarke, Tom (Monklands W)

  Bermingham, Gerald

  Clelland, David

  Berry, Roger

  Clwyd, Mrs Ann

  Betts, Clive

  Coffey, Ms Ann

  904

  Cohen, Harry

  Ingram, Adam

  Cook, Frank (Stockton N)

  Jackson, Ms Glenda (Hampst'd)

  Cook, Robin (Livingston)

  Jackson, Mrs Helen (Hillsborough)

  Corbett, Robin

  Jamieson, David

  Corston, Ms Jean

  Janner, Greville

  Cousins, Jim

  Jenkins, Brian D (SE Staffs)

  Cox, Tom

  Jones, Barry (Alyn & D'side)

  Cummings, John

  Jones, Ieuan Wyn (Ynys Môn)

  Cunliffe, Lawrence

  Jones, Jon Owen (Cardiff C)

  Cunningham, Jim (Cov'try SE)

  Jones, Dr L (B'ham Selly Oak)

  Dafis, Cynog

  Jones, Martyn (Clwyd SW)

  Dalyell, Tam

  Jowell, Ms Tessa

  Darling, Alistair

  Kennedy, Charles (Ross C & S)

  Davidson, Ian

  Kennedy, Mrs Jane (Broadgreen)

  Davies, Bryan (Oldham C)

  Khabra, Piara S

  Davies, Denzil (Llanelli)

  Kilfoyle, Peter

  Davies, Ron (Caerphilly)

  Kirkwood, Archy

  Davis, Terry (B'ham Hodge H)

  Liddell, Mrs Helen

  Denham, John

  Litherland, Robert

  Dewar, Donald

  Livingstone, Ken

  Dixon, Don

  Lloyd, Tony (Stretf'd)

  Dobson, Frank

  Llwyd, Elfyn

  Donohoe, Brian H

  Loyden, Eddie

  Dowd, Jim

  McAllion, John

  Dunwoody, Mrs Gwyneth

  Macdonald, Calum

  Eastham, Ken

  McKelvey, William

  Ennis, Jeff

  Mackinlay, Andrew

  Etherington, Bill

  McLeish, Henry

  Evans, John (St Helens N)

  McNamara, Kevin

  Ewing, Mrs Margaret

  MacShane, Denis

  Fatchett, Derek

  McWilliam, John

  Faulds, Andrew

  Madden, Max

  Field, Frank (Birkenhead)

  Maddock, Mrs Diana

  Fisher, Mark

  Mandelson, Peter

  Flynn, Paul

  Marshall, David (Shettleston)

  Forsythe, Clifford (S Antrim)

  Marshall, Jim (Leicester S)

  Foster, Derek

  Martin, Michael J (Springburn)

  Foulkes, George

  Martlew, Eric

  Fraser, John

  Maxton, John

  Fyfe, Mrs Maria

  Meacher, Michael

  Galbraith, Sam

  Meale, Alan

  Galloway, George

  Michael, Alun

  Gapes, Mike

  Michie, Bill (Shef'ld Heeley)

  Garrett, John

  Milburn, Alan

  George, Bruce

  Miller, Andrew

  Gerrard, Neil

  Mitchell, Austin (Gt Grimsby)

  Gilbert, Dr John

  Moonie, Dr Lewis

  Godman, Dr Norman A

  Morgan, Rhodri

  Godsiff, Roger

  Morley, Elliot

  Golding, Mrs Llin

  Morris, Ms Estelle (B'ham Yardley)

  Gordon, Ms Mildred

  Morris, John (Aberavon)

  Graham, Thomas

  Mowlam, Ms Marjorie

  Grant, Bernie (Tottenham)

  Mudie, George

  Griffiths, Win (Bridgend)

  Mullin, Chris

  Grocott, Bruce

  Murphy, Paul

  Gunnell, John

  O'Brien, Mike (N Warks)

  Hain, Peter

  O'Brien, William (Normanton)

  Hardy, Peter

  O'Hara, Edward

  Harman, Ms Harriet

  Olner, Bill

  Heppell, John

  O'Neill, Martin

  Hill, Keith (Streatham)

  Orme, Stanley

  Hinchliffe, David

  Pearson, Ian

  Hodge, Ms Margaret

  Pendry, Tom

  Hogg, Norman (Cumbernauld)

  Pickthall, Colin

  Home Robertson, John

  Pike, Peter L

  Hood, Jimmy

  Pope, Greg

  Hoon, Geoffrey

  Powell, Sir Raymond (Ogmore)

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

  Prentice, Gordon (Pendle)

  Howarth, George (Knowsley N)

  Prescott, John

  Howells, Dr Kim

  Primarolo, Ms Dawn

  Hoyle, Doug

  Purchase, Ken

  Hughes, Kevin (Doncaster N)

  Quin, Ms Joyce

  Hughes, Robert (Ab'd'n N)

  Radice, Giles

  Hughes, Roy (Newport E)

  Randall, Stuart

  Hutton, John

  Raynsford, Nick

  Illsley, Eric

  Reid, Dr John

  905

  Robertson, George (Hamilton)

  Sutcliffe, Gerry

  Robinson, Geoffrey (Cov'try NW)

  Thompson, Jack (Wansbeck)

  Rogers, Allan

  Thurnham, Peter

  Rooker, Jeff

  Timms, Stephen

  Rooney, Terry

  Tipping, Paddy

  Ross, Ernie (Dundee W)

  Touhig, Don

  Rowlands, Ted

  Trickett, Jon

  Ruddock, Ms Joan

  Turner, Dennis

  Sedgemore, Brian

  Vaz, Keith

  Sheerman, Barry

  Walker, Sir Harold

  Sheldon, Robert

  Wallace, James

  Shore, Peter

  Walley, Ms Joan

  Short, Clare

  Wardell, Gareth (Gower)

  Wareing, Robert N

  Simpson, Alan

  Watson, Mike

  Skinner, Dennis

  Wicks, Malcolm

  Smith, Andrew (Oxford E)

  Wigley, Dafydd

  Smith, Chris (Islington S)

  Williams, Alan (Swansea W)

  Smith, Llew (Blaenau Gwent)

  Williams, Alan W (Carmarthen)

  Snape, Peter

  Winnick, David

  Soley, Clive

  Wise, Mrs Audrey

  Spearing, Nigel

  Wray, Jimmy

  Spellar, John

  Wright, Dr Tony

  Squire, Ms R (Dunfermline W)

  Steel, Sir David

  Tellers for the Noes:

  Steinberg, Gerry

  Ms Angela Eagle and

  Stevenson, George

  Mr. Thomas McAvoy.

  Question accordingly agreed to.
  Resolved,
  That the Local Government Finance Report (Wales) 1997–98 (HC 218). which was laid before this House on 3rd February, be approved.
  It being after Ten o'clock, MR. DEPUTY SPEAKER put the remaining Questions required to be put at that hour.
  Motion made, and Question put,
  That the Special Grant Report (Wales) 1997 (HC 219), which was laid before this House on 3rd February, be approved.—[Mr. Peter Ainsworth.]
  The House divided: Ayes 254. Noes 124.

  Division No. 68]

  [10.14 pm

  AYES

  Ainsworth, Peter (E Surrey)

  Burns, Simon

  Aitken, Jonathan

  Butcher, John

  Alexander, Richard

  Butler, Peter

  Amess, David

  Butterfill, John

  Arbuthnot, James

  Carlisle, Sir Kenneth (Linc'n)

  Arnold, Jacques (Gravesham)

  Cash, William

  Atkinson, Peter (Hexham)

  Channon, Paul

  Baker, Kenneth (Mole V)

  Chapman, Sir Sydney

  Banks, Robert (Harrogate)

  Clappison, James

  Bates, Michael

  Clarke, Kenneth (Rushcliffe)

  Batiste, Spencer

  Clifton-Brown, Geoffrey

  Beggs, Roy

  Coe, Sebastian

  Bellingham, Henry

  Congdon, David

  Bendall, Vivian

  Conway, Derek

  Beresford, Sir Paul

  Coombs, Simon (Swindon)

  Body, Sir Richard

  Cope, Sir John

  Bonsor, Sir Nicholas

  Couchman, James

  Booth, Hartley

  Cran, James

  Boswell, Tim

  Currie, Mrs Edwina

  Bottomley, Peter (Eltham)

  Curry, David

  Bottomley, Mrs Virginia

  Davies, Quentin (Stamf'd)

  Bowden, Sir Andrew

  Davis, David (Boothferry)

  Bowis, John

  Day, Stephen

  Brandreth, Gyles

  Deva, Nirj Joseph

  Brazier, Julian

  Devlin, Tim

  Bright, Sir Graham

  Dorrell, Stephen

  Brooke, Peter

  Douglas-Hamilton, Lord James

  Browning, Mrs Angela

  Dover, Den

  Budgen, Nicholas

  Duncan, Alan

  906

  Duncan Smith, Iain

  Knox, Sir David

  Dunn, Bob

  Kynoch, George

  Dykes, Hugh

  Lait, Mrs Jacqui

  Eggar, Tim

  Lamont, Norman

  Elletson, Harold

  Lang, Ian

  Evans, Jonathan (Brecon)

  Lawrence, Sir Ivan

  Evans, Nigel (Ribble V)

  Legg, Barry

  Evans, Roger (Monmouth)

  Leigh, Edward

  Faber, David

  Lester, Sir Jim (Broxtowe)

  Fabricant, Michael

  Lidington, David

  Fenner, Dame Peggy

  Lilley, Peter

  Forman, Nigel

  Lloyd, Sir Peter (Fareham)

  Forsyth, Michael (Stirling)

  Lord, Michael

  Forsythe, Clifford (S Antrim)

  Luff, Peter

  Forth, Eric

  Lyell, Sir Nicholas

  Fowler, Sir Norman

  MacGregor, John

  Fox, Dr Liam (Woodspring)

  MacKay, Andrew

  Fox, Sir Marcus (Shipley)

  Maclean, David

  Freeman, Roger

  McLoughlin, Patrick

  French, Douglas

  Madel, Sir David

  Fry, Sir Peter

  Malone, Gerald

  Gale, Roger

  Mans, Keith

  Gallie, Phil

  Marland, Paul

  Gardiner, Sir George

  Marlow, Tony

  Garel-Jones, Tristan

  Marshall, John (Hendon S)

  Garnier, Edward

  Martin, David (Portsmouth S)

  Gill, Christopher

  Mayhew, Sir Patrick

  Gillan, Mrs Cheryl

  Mellor, David

  Goodlad, Alastair

  Merchant, Piers

  Goodson-Wickes, Dr Charles

  Mitchell, Andrew (Gedling)

  Gorman, Mrs Teresa

  Mitchell, Sir David (NW Hants)

  Gorst, Sir John

  Moate, Sir Roger

  Grant, Sir Anthony (SW Cambs)

  Monro, Sir Hector

  Greenway, John (Ryedale)

  Needham, Richard

  Griffiths, Peter (Portsmouth N)

  Nelson, Anthony

  Grylls, Sir Michael

  Neubert, Sir Michael

  Gummer, John

  Newton, Tony

  Hague, William

  Nicholson, David (Taunton)

  Hamilton, Sir Archibald

  Norris, Steve

  Hamilton, Neil (Tatton)

  Ottaway, Richard

  Hampson, Dr Keith

  Page, Richard

  Hanley, Jeremy

  Paice, James

  Hargreaves, Andrew

  Patnick, Sir Irvine

  Haselhurst, Sir Alan

  Patten, John

  Hawkins, Nick

  Pattie, Sir Geoffrey

  Hayes, Jerry

  Peacock, Mrs Elizabeth

  Heald, Oliver

  Pickles, Eric

  Heath, Sir Edward

  Porter, David

  Heathcoat-Amory, David

  Portillo, Michael

  Hendry, Charles

  Powell, William (Corby)

  Heseltine, Michael

  Rathbone, Tim

  Hicks, Sir Robert

  Redwood, John

  Higgins, Sir Terence

  Renton, Tim

  Hill, Sir James (Southampton Test)

  Richards, Rod

  Hogg, Douglas (Grantham)

  Riddick, Graham

  Horam, John

  Rifkind, Malcolm

  Hordern, Sir Peter

  Robathan, Andrew

  Howard, Michael

  Roberts, Sir Wyn

  Howell, David (Guildf'd)

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

  Howell, Sir Ralph (N Norfolk)

  Robinson, Mark (Somerton)

  Hughes, Robert G (Harrow W)

  Rowe, Andrew

  Hunt, David (Wirral W)

  Ryder, Richard

  Hunter, Andrew

  Sackville, Tom

  Jack, Michael

  Shaw, David (Dover)

  Jackson, Robert (Wantage)

  Shaw, Sir Giles (Pudsey)

  Jenkin, Bernard (Colchester N)

  Shephard, Mrs Gillian

  Jessel, Toby

  Shepherd, Richard (Aldridge)

  Johnson Smith, Sir Geoffrey

  Shersby, Sir Michael

  Jones, Gwilym (Cardiff N)

  Sims, Sir Roger

  Jones, Robert B (W Herts)

  Smith, Tim (Beaconsf'ld)

  Jopling, Michael

  Soames, Nicholas

  King, Tom

  Spencer, Sir Derek

  Kirkhope, Timothy

  Spicer, Sir Jim (W Dorset)

  Knapman, Roger

  Spicer, Sir Michael (S Worcs)

  Knight, Mrs Angela (Erewash)

  Spink, Dr Robert

  Knight, Greg (Derby N)

  Spring, Richard

  907

  Sproat, Iain

  Walker, Bill (N Tayside)

  Squire, Robin (Hornchurch)

  Waller, Gary

  Stanley, Sir John

  Ward, John

  Steen, Anthony

  Wardle, Charles (Bexhill)

  Stern, Michael

  Waterson, Nigel

  Stewart, Allan

  Watts, John

  Streeter, Gary

  Wells, Bowen

  Sweeney, Walter

  Wheeler, Sir John

  Sykes, John

  Whittingdale, John

  Taylor, Ian (Esher)

  Widdecombe, Miss Ann

  Taylor, John M (Solihull)

  Wiggin, Sir Jerry

  Temple-Morris, Peter

  Wilkinson, John

  Thomason, Roy

  Willetts, David

  Thompson, Sir Donald (Calder V)

  Wilshire, David

  Townend, John (Bridlington)

  Winterton, Mrs Ann (Congleton)

  Townsend, Sir Cyril (Bexl'yh'th)

  Winterton, Nicholas (Macdesf'ld)

  Tracey, Richard

  Wolfson, Mark

  Tredinnick, David

  Wood, Timothy

  Trend, Michael

  Yeo, Tim

  Trotter, Neville

  Young, Sir George

  Twinn, Dr Ian

  Viggers, Peter

  Tellers for the Ayes:

  Waldegrave, William

  Mr. Matthew Carrington

  Walden, George

  and Mr. Anthony Coombs.

  NOES

  Adams, Mrs Irene

  Griffiths, Win (Bridgend)

  Ainger, Nick

  Gunnell, John

  Ainsworth, Robert (Cov'try NE)

  Hain, Peter

  Alton, David

  Hardy, Peter

  Armstrong, Ms Hilary

  Heppell, John

  Ashton, Joseph

  Hill, Keith (Streatham)

  Banks, Tony (Newham NW)

  Home Robertson, John

  Barnes, Harry

  Howarth, George (Knowsley N)

  Bayley, Hugh

  Howells, Dr Kim

  Beith, A J

  Hoyle, Doug

  Bermingham, Gerald

  Hughes, Kevin (Doncaster N)

  Boateng, Paul

  Hughes, Roy (Newport E)

  Bradley, Keith

  Hughes, Simon (Southwark)

  Brown, Nicholas (Newcastle E)

  Hutton, John

  Burden, Richard

  Illsley, Eric

  Caborn, Richard

  Ingram, Adam

  Callaghan, Jim

  Janner, Greville

  Campbell, Menzies (Fife NE)

  Jenkins, Brian D (SE Staffs)

  Campbell-Savours, D N

  Jones, Barry (Atyn & D'side)

  Carlile, Alex (Montgomery)

  Jones, Ieuan Wyn (Ynys Môn)

  Chidgey, David

  Jones, Jon Owen (Cardiff C)

  Clapham, Michael

  Kennedy, Charles (Ross C & S)

  Clarke, Eric (Midlothian)

  Kirkwood, Archy

  Clwyd, Mrs Ann

  Lewis, Terry

  Coffey, Ms Ann

  Lithetland, Robert

  Cohen, Harry

  Llwyd, Elfyn

  Corston, Ms Jean

  McAvoy, Thomas

  Cunningham, Jim (Cov'try SE)

  Mackinlay, Andrew

  Dalyell, Tam

  McLeish, Henry

  Davidson, Ian

  Maddock, Mrs Diana

  Davies, Denzil (Llanelli)

  Maxton, John

  Davies, Ron (Caerphilly)

  Meale, Alan

  Dixon, Don

  Michael, Alun

  Donohoe, Brian H

  Michie, Bill (Shef'ld Heeley)

  Dowd, Jim

  Milburn, Alan

  Eagle, Ms Angela

  Morgan, Rhodri

  Eastham, Ken

  Morley, Elliot

  Ennis, Jeff

  Morris, Ms Estelle (B'ham Yardley)

  Etherington, Bill

  Mudie, George

  Evans, John (St Helens N)

  Mullin, Chris

  Ewing, Mrs Margaret

  O'Brien, William (Normanton)

  Fatchett, Derek

  O'Hara, Edward

  Faulds, Andrew

  Olner, Bill

  Flynn, Paul

  O'Neill, Martin

  Fraser, John

  Orme, Stanley

  Gerrard, Neil

  Pickthall, Colin

  Golding, Mrs Llin

  Pike, Peter L

  Gordon, Ms Mildred

  Powell, Sir Raymond (Ogmore)

  Graham, Thomas

  Prescott, John

  Griffiths, Nigel (Edinburgh S)

  Quin, Ms Joyce

  908

  Reid, Dr John

  Vaz, Keith

  Robertson, George (Hamilton)

  Walker, Sir Harold

  Rooney, Terry

  Wallace, James

  Rowlands, Ted

  Walley, Ms Joan

  Simpson, Alan

  Wardell, Gareth (Gower)

  Skinner, Dennis

  Wigley, Dafydd

  Smith, Llew (Blaenau Gwent)

  Williams, Alan (Swansea W)

  Spearing, Nigel

  Williams, Alan W (Carmarthen)

  Spellar, John

  Wise, Mrs Audrey

  Steel, Sir David

  Wray, Jimmy

  Steinberg, Gerry

  Sutcliffe, Gerry

  Tellers for the Noes:

  Thumharn, Peter

  Mr. Don Touhig and

  Timms, Stephen

  Mr. Martyn Jones.

  Question accordingly agreed to.
  Resolved,
  That the Special Grant Report (Wales) 1997 (HC 219), which was laid before this House on 3rd February, be approved.

  Local Government Finance (Wales)

    Local Government Finance (Wales)
    Resolved,
    That the Limitation of Council Tax (Relevant Notional Amounts) Report (Wales) 1997–98 (HC 220), which was laid before this House on 3rd February, be approved.—[Mr. Peter Ainsworth.]

    Artists' Resale Rights
    Resolved,
    That this House takes note of European Community Document No. 7050/96, relating to the resale right for the benefit of the author of an original work of art, and supports the Government which is not persuaded that there is a case for the introduction of this proposal into the United Kingdom.—[Mr. Peter Ainsworth.]

PETITION

  Carers (Respite Breaks)
  10.27 pm
  Mr. Richard Burden: There are an estimated 100,000 people in Birmingham who care for others and the petition that I am presenting has been compiled by the West Heath Carers Association in my constituency. It is in support of the right of carers to have short-term breaks. More than 350 people from Birmingham, Northfield and the surrounding areas have signed the petition, which reads as follows:
  To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
  The Humble Petition of the people of Birmingham Northfield and the surrounding areas Sheweth That to ensure these essential services, disabled people and their carers have the right, following assessment, to short term (respite) breaks.
  Wherefore your petitioners pray that your honourable House pass a bill in like terms to the Disabled Persons and Carers Bill [Lords], presented in the last session of Parliament, to legally enshrine the right to assessment and subsequent short term (respite) breaks.
  And your petitioners, as in duty bound, will ever pray, &c.
  To lie upon Table.

  Rural Housing (Scotland)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Ainsworth.]
  10.28 pm
  Mr. James Wallace: I am pleased to have secured this Adjournment debate on rural housing policy in Scotland. Many of the organisations associated with housing in Scotland, such as Shelter, the Scottish Federation of Housing Associations and the Chartered Institute of Housing in Scotland, have been trying in recent months to raise the political profile of the housing issue. It is important to do so in a context that shows that housing is not an issue that operates in isolation.
  Housing has implications for health, in that there is a proven link between poor housing and disease; and for education, in that children can lose time at school through housing-related ill health or difficulty in doing homework in overcrowded homes. There is a relationship between housing and crime, in that cheaply built and poorly maintained homes are more prone to break-ins; and between housing and employment—for example, in the costs to the construction industry resulting from any reduction in investment in housing. I hope that by holding this Adjournment debate on Scotland's rural housing policy, we can make some small contribution to the wider debate.
  The problems of urban housing are usually obvious. Those of rural housing tend to be scattered over a large area, and are therefore not so obvious to view. But the figures highlight the serious extent of a problem that, unless it is adequately addressed, could quickly develop into a serious rural housing crisis.
  I shall start by sketching in some of the background. Scottish Homes invests 20.2 per cent. of its annual funding budget in Scotland's rural areas, although 28.8 per cent. of Scotland's households are within those areas. About 22 per cent. of all rural homes require repairs costing £2,500 or more, compared to 10 per cent. of urban houses. Rural home owners are twice as likely as owner-occupiers in large towns and cities to live in damp conditions.
  Despite the fact that they account for only 29 per cent. of Scottish households, local authority areas defined as rural account for 39 per cent. of dwellings assessed as below tolerable standard. Indeed, one of the most recent surveys pushed the "below tolerable standard" estimate in an area of Skye and Lochalsh from 8 per cent. to 22 per cent. of the housing stock; and in several other Scottish rural areas, more than 20 per cent. of the housing is below tolerable standard.
  Officially recorded homelessness in rural Scotland rose by 63 per cent. between 1989–90 and 1995–96. The comparable figure for urban Scotland was a much lower, but still unacceptable, 36 per cent. Those are average figures, but especially high increases have been recorded in Western Isles, in Orkney, Angus and Lochaber, and in Kincardine and Deeside. In all those areas, homelessness has more than doubled in the six-year period that I mentioned.
  Then there are the problems that can so easily be overlooked—for example, the number of people who are obliged to live in caravans. That can sometimes disguise

  911
  the real extent of housing need. A report prepared for Shelter in 1993, entitled "A forgotten problem", found that caravan dwelling was seen as a predominantly rural housing solution for about 4,000 Scottish households.
  Caravans are seldom the accommodation of choice—a fact that my constituency surgeries often bear out. Apart from the heating problems and the dampness encountered in caravans, insurance cover can sometimes be impossible to find, with all the consequences that that brings for families trying to put things together again after their caravans, furniture and property have been destroyed by wind or other bad weather.
  Recently, a constituent drew to my attention the fact that concessionary electricity tariffs were unavailable for some caravan dwellers, because their connection was via the council rather than directly with Scottish Hydro-Electric. People already disadvantaged by low incomes find themselves further disadvantaged when they cannot get access to concessionary tariffs.
  Many of the problems of rural housing are associated with low income, especially with the combination of low income and higher costs, including higher housing costs. It is a well established fact that, in many rural parts of Scotland, the costs of transport and the general cost of living, including the price of ordinary household goods, is much higher. For people on low incomes, that means that there is even less of their income left to meet housing costs.
  I am talking about areas of low income, of seasonal employment and of high living costs. Rural households have less income to meet those higher housing costs. Rural areas account for 20 per cent. of all homelessness applications, but 27 per cent. of those result from mortgage default.
  In addition, the cost of owner-occupation is often increased because of the external demand for housing. Houses up for sale in rural areas are often advertised in the national rather than the local press. In the Argyll islands, one quarter of the housing stock consists of second or holiday homes, while social housing for rent accounts for less than 16 per cent.
  Even when there is social housing for rent, the availability of less than 100 per cent. housing association grants makes private loan finance a necessity, so rents are pushed higher. To that we must add the consequences of recent and proposed changes in housing benefit. In Scotland's rural areas, the incidence of private rented accommodation is well above average, much of it at relatively high rents.
  New rules from next October will restrict benefit for single people under the age of 60 to a single-room rent. I was advised earlier today by the housing department of Orkney Islands council that that has already prompted a number of private tenants in Orkney to do a simple calculation to work out that they will not be able to afford their current accommodation, so they will present themselves as homeless. In turn, that has implications for landlords, who have been encouraged until now to let their premises, but who may well find that they cannot attract tenants at the levels of rents that they have been charging until now.
  Against that background, there are two key aspects of Government policy that I wish to challenge this evening. First, there has been a significant cut in funding for
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  housing investment over the past year and next year. It is my understanding that the Scottish Homes approved development programme for housing associations and private developers will be down by 25 per cent., from £280 million to £210 million, in 1997–98.
  I am sure—because I have been through these debates before—that the Minister will tell us in his reply that, on Budget day, the Secretary of State gave another £43 million to Scottish Homes, and that Scottish Homes has managed to find about £30 million through housing stock transfers. He has claimed in a letter to my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) that, over this year and next year, Scottish Homes will invest over £500 million in housing development.
  I understand that, if the investment had remained at the 1995–96 level, it would have been about £650 million. Certainly the information from the Scottish Federation of Housing Associations, and from housing associations in my constituency and that of my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood), is that the associations all expect a decrease in the funding available for housing investment in the year ahead.
  We cannot take that money out of housing investment without consequences in terms of the number of new units started, or without reducing what can be done to try to tackle the condition of Scotland's rural housing. It will also have consequences for construction firms—many of which are small community businesses—which are facing job losses as a result of cuts in housing expenditure. Linked to that is the problem faced by many local authorities, who see the capital receipts from the sale of council houses going up to 75 per cent. These sums have to be applied to pay off accrued debt on housing.
  Surely it would be far better to allow the local authorities an opportunity to determine their own priorities. Under its own proposals—and without any prompting from the Government—Orkney would have paid off its housing debt within the next 12 to 14 years. It now finds that tenants who have waited patiently for some refurbishment and have been told that it would happen next year will be seriously disappointed. In Shetland, some £500 million is expected to be lost from the refurbishment budget, thereby knocking out of sync a long-prepared programme to try to catch up on the refurbishment that was not done at the time of the oil boom.
  In Shetland, the Western Isles and Highland, the Government have indicated in principle a willingness to commute debt, and that is very welcome. A lot of the detail has still to be worked out, and I very much hope that whoever is sitting on the Treasury Bench after the election will honour that commitment in principle and ensure that the detail is satisfactory. Although the expectation with regard to investment through Scottish Homes is that the pain will be shared equally when Scottish Homes divides up the cake, may I ask the Minister tonight if he will consult Scottish Homes about showing a bias towards rural housing associations?
  I do not think that I need declare an interest but—in case it is necessary—I declare that my wife is a vice-chairman of the Orkney housing association, and I have had my ear bent at first hand on this issue. However, I know that all rural housing associations in the Highlands and Islands, and other parts of rural Scotland, feel strongly about the matter.

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  Since Scottish Homes launched its rural initiative in 1990, it has—according to a recent review—invested £311 million in rural Scotland, resulting in more than 10,400 starts. It has made an important contribution to care and repair and it has managed to get leverage of private finance, which has increased over the years. Without that rural initiative, I accept that the position would have been worse.
  Notwithstanding that, as I said earlier, the consultant who conducted that review of Scottish Homes' rural policy concluded
  "that a rural share of 20.2 per cent. of Scottish Homes national investment is not commensurate with a 28.8 per cent. share of households, and a much faster rate of new household formation Moreover, the disproportionate cut in rural investment approved for 1996/97 is hard to reconcile with these trends. It is recommended that Scottish Homes both increases the rural share of its spending and articulates a clearer rationale for the geographic distribution of its expenditure."
  I extract two points to justify my plea for favoured treatment. First, it will reverse a disproportionate cut in 1996–97, and, secondly, it will address the issue of much faster rate of new household formation.
  The review to which I have referred highlights trends projected into the next century, which show proportion and household numbers increasing faster in rural Scotland than urban Scotland. In the Highlands and Islands and Grampian district, household growth between 1992 and 2001 is estimated at 12.7 per cent., and in Lothian and Borders it is estimated at 10 per cent., compared with the Scottish average of 7.7 per cent. A rationale for geographical distribution would undoubtedly favour those areas; I ask the Minister to encourage such an approach.
  The second key point concerns the Government's obsession with home ownership, and its target setting of 60 per cent. home ownership, against which it seems that all other objects must take second place.
  I have no ideological objection to home ownership, which is a necessary feature of any liberal democracy. The objection is to an obsessive ideological pursuit of the aim. Liberal Democrats did not oppose the principle of the right to buy, but we have pointed out the wisdom of allowing local authorities flexibility to maintain a balanced housing stock. What I heard earlier today shows that that view is justified: Orkney Islands council must place a newspaper advertisement in an attempt to find suitable accommodation for a family with special but not exceptional needs, because it no longer has any accommodation suitable for adaptation in its own housing stock.
  I ask the Minister, in the case of Scottish Homes, to allow much more local discretion and flexibility for districts and housing associations to determine the balance of their own areas between low-cost home ownership and public rented housing at affordable rents. The review of Scottish Homes' rural policy recommended
  "that Scottish Homes gives primary emphasis in rural areas to the provision of affordable rented housing, although low cost home ownership should continue to be promoted in areas where there is sufficient and identified demand as a secondary priority. The guiding principle here should be local flexibility to respond to local circumstances, and efficiency targets should permit this."
  In turn, the Scottish Homes district plan for Highlands, Islands and Grampian concluded:
  "The highest priority district objective is to increase the supply of low cost rented housing whether through direct provision or bringing redundant dwellings back into use.
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  We will concentrate the provision of general needs housing for rent in rural areas where there is currently low provision of local authority or assured tenancy housing. This will be provided through the funding of housing associations/co-operatives."
  I have received representations from the Orkney housing association and the Hjaltland housing association in my constituency to the effect that, although the local district office in Inverness is well seized of the point, and sees the need to increase the supply of low cost rented accommodation, the indications they get of directions from on high, either from the board of Scottish Homes or—probably more likely—from Ministers, are that the drive towards a greater share of home ownership must go on.
  That is happening against the following background. In Orkney, owner-occupation already stands at more than 65 per cent., in Dumfries and Galloway at 60 per cent., in Argyll and Bute almost 55 per cent., in Highland 55 per cent., in Borders more than 53 per cent., in Shetland 52 per cent., and in the Western Isles almost 77 per cent. There are already substantial levels of home ownership in much of rural Scotland. I repeat the recommendation from the review of Scottish homes rural policy:
  "the guiding principle should be local flexibility to respond to local circumstances".
  There are many other connected issues, which we could discuss all night; instead, I shall write to the Minister about them. The problems relating to rural housing are deeply serious. The market has not brought about a solution, especially for people on low incomes, who cannot afford to rent or buy. For many, the alternative may be to leave their native community, with all that that means for rural services, such as education, in the areas that they leave behind. Investment in rural areas and a greater emphasis on affordable rented housing are two key ways of tackling that problem. I hope that the Minister will be able to give us some encouragement in this direction tonight.
  10.43 pm
  The Parliamentary Under-Secretary of State for Scotland (Mr. Raymond S. Robertson): First, I congratulate the hon. Member for Orkney and Shetland (Mr. Wallace) on securing this Adjournment debate this evening. It gives us an opportunity to discuss, albeit briefly, rural housing. If he wishes to raise other issues, he should write to me, and I shall ensure that he gets a very speedy reply.
  I shall begin by outlining some key features of the Government's approach to housing. Obviously, those involve extending choice and developing policies that address people's aspirations. That approach is the same for both urban and rural Scotland. Our objectives are to promote greater housing choice; to assist and enable the provision of an adequate supply of housing; to promote improvement in housing quality; and to seek a more effective use of resources in housing.
  Our belief in home ownership is rooted in the view that to be a home owner is a fundamental aspiration of the vast majority of people. I was therefore somewhat concerned to hear what the hon. Gentleman had to say about home ownership. Surveys suggest that 70 to 80 per cent. of households would ideally like to be home owners, and we wish to enable as many people as possible to achieve that aim. We can therefore take

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  great pride in the fact that owner-occupation in Scotland has increased dramatically, from 35 per cent. in 1979, when the Government first took office, to 58 per cent. at the end of 1995.
  I am still firmly of the view that local authority tenants in rural areas who aspire to become home owners should have every opportunity to purchase their homes. However, we recognise that there are special housing problems in rural areas. The Government fully acknowledge those, and adequate provisions exist within the right-to-buy
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  We also asked Scottish Homes, as one of its first priorities after it was set up in 1989, to draw up a policy to address the special problems of housing in rural areas. As a result, it operates a number of schemes that can help with the problems associated with housing in rural areas. Those include shared ownership schemes, which are used extensively in rural Scotland, and can be particularly beneficial in helping local people enter home ownership in pressurised housing markets.
  Rural home ownership grants are also available to help people on modest incomes to build their own homes or renovate an existing building.

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  As I said, the Arkleton centre at Aberdeen university reviewed Scottish Homes rural policy in the light of experience, the White Paper entitled "Rural Scotland: People, Prosperity and Partnership", and the reorganisation of local government. Of course the review identified a number of aspects in which improvements might be made, but the thrust of its findings was mainly positive.
  The review found that Scottish Homes rural policy has had a considerable impact on rural areas, acting as a catalyst for the development of strategies to meet the wider needs of rural communities. Investment in housing association provision has made a major contribution to improving the variety of housing options for people in rural Scotland. The policy has succeeded in encouraging private developers to build in rural areas, where they would not otherwise have operated because of narrow profit margins.
  Scottish Homes support for local housing associations and local housing agencies has played an important role in supporting community development and involvement. The rural programme contributes directly to employment and economic development in rural areas, and has the potential to support economic development strategies indirectly. The formulation of an explicit rural policy is widely seen as a model.
  The review is on-going. If the hon. Member for Orkney and Shetland wishes to contribute to it, he may do so directly to Scottish Homes or through me. He mentioned the need for investment in rural council housing. Housing has had to play its part in a tight public expenditure round.
  Mr. Wallace: Before the Minister leaves the rural homes policy review, how does he respond to the clear recommendations in the review? Scottish Homes does not seem to be giving resources to rural areas commensurate with the number of households in Scotland's rural areas. It is recommended that the primary emphasis must be on the provision of affordable rented housing, with local flexibility to take account of the need to achieve a proper balance between low-cost home ownership and rented accommodation.
  Mr. Robertson: As the hon. Gentleman knows, Scottish Homes has considerable licence as to how it operates. I meet the chairman and board twice a year to review the strategic objectives. The rural review is one of the subjects that will be discussed when we meet soon. I am happy to feed in the hon. Gentleman's comments.
  As the hon. Gentleman pointed out, this year's public expenditure survey is tight, and housing has had its share of cuts. The reduction in resources arises from the requirement for local authorities to set aside 75 per cent. of the receipts from house sales next year rather than 50 per cent., as we envisaged originally. That change results from the overriding need to tackle the burden of debt. Despite the controls on the use of capital receipts that were imposed last year, local authority housing debt has continued to rise, and the average debt per house has also increased. We believe that further steps should be taken to reduce the burden of indebtedness.
  Following that change in the receipts rules, I decided that it was no longer sensible to issue housing allocations on a gross basis. In future, local authorities will receive a net allocation for housing investment, and I announced
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  the allocations for 1997–98 before Christmas. That brings capital allocations for council housing into line with the position on non-housing capital. It has an added advantage in that, for the first time, I was able to respond to the request by the Convention of Scottish Local Authorities to issue housing capital allocations before authorities set their rents.
  The total net allocations for 1997–98 amount to £171.9 million, and are higher than those issued to authorities in 1996–97. In addition, on the basis of councils' own estimates, I would expect them to generate useable receipts of between £50 million and £60 million next year in order to augment their investment. The change in the rules on receipts set-aside means that some redistribution of resources has been necessary to protect those authorities, such as Orkney, that are most reliant on receipts. That has worked to Orkney's advantage, because the gross estimated resources available are higher than the central planning assumption on which the council planned its forward capital programme.
  I accept that that change has reduced the net resources available to Shetland by some £266,000. In determining the distribution of the resources available for investment, I decided that it was necessary to spread the impact of the change in set-aside rules equitably over all authorities. The redistribution of the net ensures that all authorities are able to meet their forward legal commitments, taking account of each council's own estimate of the capital receipts that it expects to generate next year. In the main, the councils' estimates were consistent with our own, but my Department will continue to monitor the situation to ensure that no council can exploit the new method of allocating resources by deliberately underestimating receipts.
  The hon. Gentleman suggested that it would be sensible to link set-aside to the level of debt in each authority, but I cannot accept that, as it would be too complicated to operate a different regime for each authority. In any event, authorities with lower debts, such as Orkney, stand to benefit if they become debt-free more quickly. I believe that considerable scope exists for authorities to increase investment levels by involving the private sector to a greater degree than occurs at present. Authorities should therefore be considering the potential for transferring stock to other landlords outwith the necessary constraints of the public sector.
  As the hon. Gentleman is aware, I visited Orkney last September, and this was one of the main items of our discussion with the council. I welcome the consideration that the council is giving to transferring its stock to a new landlord, and I hope that it will take forward that idea in consultation with my officials. After all, the transfer of the council's stock to a new landlord not only would facilitate increased investment in the existing stock, but potentially could produce a substantial receipt of which any surplus remaining after debt redemption could be invested in the provision of new rented housing.
  I appreciate that the transfer of housing stock to an alternative landlord would be a difficult matter for Shetland Islands council at present.
  Question put and agreed to.
  Adjourned accordingly at three minutes to Eleven o'clock.