Commons Sitting of 14 July 1997

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
Oral answers to Questions
  DEFENCE

    Gulf War Veterans
    Mr. Hutton: To ask the Secretary of State for Defence what plans he has to establish an internal advisory group on the health of Gulf war veterans. [6507]
    Mr. Olner: To ask the Secretary of State for Defence when he last met representatives from the Gulf War Veterans Association to discuss Gulf war syndrome. [6513]
    The Minister for the Armed Forces (Dr. John Reid): The new internal advisory group on Gulf war veterans' illnesses, which I announced on 16 June, met for the first time last week, to aid my consideration of the detailed policy statement, "Gulf Veterans' Illnesses: A New Beginning", which I am publishing today and contains 20 key measures setting out how the Government intend to address Gulf veterans' concerns in future.
    As part of an on-going commitment to deal openly and honestly with Gulf veterans, I met representatives from the main Gulf veterans' groups earlier today to brief them on this initiative.
    Mr. Hutton: I am grateful to my hon. Friend for that reply. I welcome that initiative and the others that he has
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    taken since 1 May to deal with the incidence of ill health among our veterans from the Gulf, one of whom is my constituent, Corporal Mervyn Grey, who was exposed to large amounts of pesticide during his service in the Gulf and has been unable to work since. When will the group produce a list of final recommendations for the Government? Will my hon. Friend ensure that they are made available to the public?
    Dr. Reid: I can certainly assure my hon. Friend that every piece of information that I have will be made public. As for the current situation, I know that the Gulf veterans will listen closely to what is said today. I am sure that they will be only too keen to update me on future recommendations.
    My approach is based on three guiding principles: Gulf veterans will be given prompt access to medical advice; appropriate research will be conducted into veterans' illnesses; and the Ministry of Defence will make public any information it possesses which is of potential relevance to veterans' illnesses. We have pledged our resources to that task and the package that we have produced today, which will double the resources allocated, will cost about £6.5 million over the next three years.
    Mr. Olner: I congratulate my hon. Friend on the attitude of the Labour Government which is completely different from that of the previous Government. We recognise that our brave men and women who fought in the Gulf have been left will real problems connected with Gulf war syndrome. There is such a thing, but it was not recognised by the previous Government. I am sure that my constituent, Mr. Tilson, will be pleased to hear my hon. Friend's announcement that research will continue in partnership with our colleagues who fought in the Gulf war rather than according to the adversarial approach taken by the previous Government.
    Dr. Reid: I thank my hon. Friend for his comments. As I have said before in the House, we all owe a debt of honour to those men and women who were prepared to

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    sacrifice their lives and to take risks with them on behalf of the country. Our future relationship with the veterans will be marked by openness and dialogue. Two meetings have already been held between officials, Gulf war veterans and me. The openness is already apparent by the provision of information, which we will make available to the veterans, and the new research into the interaction between the vaccines that they were given and the nerve agent pre-treatment sets tablets. The dialogue is also apparent from our efforts to involve Gulf war veterans in the process, including the research project, which will be overseen by a panel of independent experts. I am glad to say that we have invited the veterans to name their independent assessor on that panel and that they have welcomed that offer.
    Mr. Viggers: Does the hon. Gentleman agree that there seems to be a difference between the supportive attitude of the Ministry of Defence to soldiers, sailors and airmen who are serving in the armed forces and its attitude to those who have unfortunately been invalided from the forces? Is he aware that the former Defence Committee thought that it might study that difference? Would he support such a study were it to be conducted?
    Dr. Reid: My approach to the veterans, and that of the Government, is that we have a duty and an obligation to them because of the sacrifices that they have made for this country. There are anomalies involving pensions and other benefits. There are anomalies in the treatment of those injured in the service of the country in Northern Ireland, who can receive criminal injuries compensation, and those serving in Bosnia. We are examining all the anomalies and will attempt to produce schemes that are in the best interests of, and provide the best security for, those who have served this country.
    Rev. Martin Smyth: I thank the Minister for his statement. He mentioned the main Gulf war veterans group. Is he satisfied that isolated veterans in other parts of the country are fully aware of what is going on? I thank him for his promise to meet me with the Northern Ireland representative next week.
    Dr. Reid: I commend the hon. Gentleman on his robust advocacy over many years on behalf of those who are suffering and who served in the Gulf. One of the practical points of the 20-point plan that I have issued today, at the suggestion of the veterans in an earlier meeting, will be the dissemination of information through local general practitioners, the Department of Health and service units to bring the medical assessment programme to the attention of any veterans who are not aware that it is available. If anyone has any other suggestions on how we might disseminate information or make veterans aware of either the medical or the financial resources to which they are entitled, I shall be only too happy to consider them.
    Mr. Hancock: I thank the Minister for his useful and helpful announcement this afternoon. I look forward to the report's publication. Will he make available to Gulf veterans, who loyally served this country, the information that has been made available to American service men and women who have suffered similarly from Gulf war syndrome and who seem to have had more success in persuading their Government to acknowledge the
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    syndrome and in obtaining the compensation that they deserve? How many people are known to have had a reaction? What is the Ministry of Defence doing to contact individuals and make information available to them?
    Dr. Reid: I am not aware of any area in which other Governments, including the American Government, are further ahead of this new Government in providing information. I have studied the subject of compensation carefully; there are two ways of providing it. The first is the American way, which is to pay large sums of money—largely, but not exclusively, related to the fact that veterans have to pay private medical insurance. We have a thing called the national health service, which this Government are bent on maintaining. The second is no-fault compensation, which is already available to veterans here under their war pensions. That compensation is a supplement—a separate pension from the service pension. The war pension itself is of considerable capital value. A veteran who is on 50 per cent. of the war pension of £107 a week—when supplementaries are taken into account—would have to spend £110,000 capital to purchase that cover. Someone aged 35 who is on a full war pension has a pension with a capital value of £420,000. In addition, unlike their American counterparts, even if our veterans receive that pension, they are entitled to take the Ministry of Defence to court; should they do so, we shall review the position again.
    Mr. Barry Jones: I thank my hon. Friend for the manner in which he received my recent deputation when I took to his Department Messrs. Turnbull, Doyle and Robertson. My hon. Friend gave up much of his time and listened carefully. It is the wish of my constituents who are Gulf war veterans that Group Captain Coker should make as much input as possible into the workings of the group. When will the group make its findings known? I am concerned that my constituents' health is deteriorating rapidly and I wish to see them compensated and well treated.
    Dr. Reid: I welcome the advice that I received from my hon. Friend's constituents when they came to see me in the Ministry of Defence. I know that there was a perception among the veterans that Group Captain Coker, who had previously been involved in the medical assessment programme, had somehow been dispatched because of his views. I am not entirely sure that that was the case and my hon. Friend will be pleased to know that in the past few days I have spoken to Group Captain Coker, who has agreed to rejoin my advisory committee. I am sure that that fact will be warmly welcomed by the veterans as another sign of the trust which the Government knew was lost and which has now been re-established.
    Sir George Young: No one doubts that many hundreds of Gulf war veterans are ill and we welcome this further initiative to find out what went wrong. If there is any new scientific evidence that might shed light on what went wrong, of course it should be pursued and I support that. May I ask the Minister about research? He will know that, last week, Lord Gilbert said that the new Ministry of Defence research programme, which was announced last

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    month, has not been recommended by the Medical Research Council. Will he take steps to ensure that the research has that validation?
    Dr. Reid: I shall certainly do that. I think that my noble Friend meant—and he was quite correct—that it was initiated not by the MRC but by me. I shall continue to initiate the exploration of any avenues that will assist research and medical resources for our Gulf war veterans.

    Armed Forces (Recruitment)
    Mr. Bayley: To ask the Secretary of State for Defence if he will make a statement on recruitment to the armed forces. [6508]
    Dr. Reid: Because of the legacy of shortages left by the previous Government, this Government have made recruiting to the armed forces one of their top priorities. It is of particular concern that manning shortages exist in all three services and, in some areas, are set to get worse. We are therefore examining, as a matter of urgency, new ways in which recruitment to the armed forces can be improved in order to reduce the significant shortfalls left by the Conservative Government.
    Mr. Bayley: This weekend, I visited 2 Signal regiment on exercises at Otterburn. That York-based regiment has recently served in the Falklands and in Bosnia, yet I learnt that it is 25 per cent. under strength as a result of the mismanagement of the defence draw-down under the previous Government. I was impressed by the commitment of the officers, men and women of the regiment and of the Gurkhas, who also serve in the regiment now. What further steps can the Labour Government take to reduce those manpower shortfalls in our regiments?
    Dr. Reid: I assure my hon. Friend that, over the past two months, I have become only too well aware of the significant problem of undermanning, which is a legacy of the previous Government's incompetence. It is a deplorable and unacceptable legacy, which is being experienced by all three services. It is especially acute in the Army, where there are significant shortfalls in the infantry, the Royal Armoured Corps and the Royal Engineers. We are committed to reversing that problem and the recruitment and retention of service personnel lies right at the top of our priorities. I take this opportunity to say to anyone outside the House who thinks that the services are in decline that that is not the case: in the armed forces there are very many opportunities for young men and women to be equipped with skills, training, discipline and character, which will not only serve their country well, but will serve them well in their future careers.
    Mr. Colvin: The comments of the Minister of State are of a party political nature: I do not think that they do him credit, nor are they entirely consistent with the Secretary of State's calls for consensus on defence matters. Does he acknowledge that numbers in the armed forces have as much to do with retention as with recruitment? If the armed forces and his Department were given the resources that they require to meet their current commitments, the question of tours of duty could be addressed and morale in the armed forces—especially in the infantry—could be
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    increased. Soldiers could thereby be retained by the armed forces: something that they want to happen, but which morale—often at home—prevents.
    Dr. Reid: Yes, indeed. As a statement of historical fact, I would alert the hon. Gentleman to the fact that I have already referred to retention as well as to recruitment. As a statement of objective fact, I draw to his attention the fact that the Army is already almost 5,500 short and that the problem is due to worsen, possibly to as many as 7,500 short. As a statement of consensus, I hope that he will give the Government full backing in their attempt to turn that situation around.
    Mr. David Heath: I am glad that the Minister drew attention to the scale of the figures. A shortfall of 5,500 or 5,800 below regimental complement—which he might have spoken of—is very serious and places a great deal of strain on individual units and individual soldiers. Will the Minister give a clear commitment that he will seek to increase recruitment to meet complement instead of reducing complement to meet current recruitment levels?
    Dr. Reid: I shall give the hon. Gentleman a clear commitment that recruitment to the armed forces will be among my highest priorities. However, in the spirit of consensus, I draw attention to the points made by the hon. Member for Romsey (Mr. Colvin), who said that, in the armed forces, retention is as big a problem as recruitment. It may well be that the way in which we attempt to retain people, especially early in their time in the services, has not taken account of the 30-year drift separating the culture and fitness of civil society and that of military society. Those matters will be among my highest priorities.

    Horseshoe Barracks
    Sir Teddy Taylor: To ask the Secretary of State for Defence if he will make a statement on the future of Horseshoe barracks in Shoeburyness. [6509]
    The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): Horseshoe barracks has been closed for some years and will be made available for sale within the next 18 months as it is no longer required by my Department.
    Sir Teddy Taylor: In view of the high unemployment in my constituency and the depressing news about further job losses in the Shoebury ranges, will the Government ensure that there is no undue delay and commit themselves to ensuring that that magnificent site is used to reinvigorate the economy of Shoeburyness and does not simply become another house building site?
    Mr. Spellar: As the hon. Member is aware, the joint working group was established last year to co-ordinate the sale and development of the site. That, as he knows, includes the Ministry of Defence, Essex county council and Southend-on-Sea borough council. Obviously we encouraged them to work as fast as possible to make the site ready for development.
    The hon. Gentleman must be fully aware that we must obtain the best price for the property for the taxpayer, but we fully intend to work with local authorities and others

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    to ensure that our attempts to meet that objective do not conflict with meeting our wider employment and environmental objectives, or with local planning and social considerations. I hope that the local authorities, working with the hon. Gentleman, will be able to argue those points strongly so that we can reach an agreed conclusion on the development of that important site.

    Trident
    Mr. Collins: To ask the Secretary of State for Defence if he will make a statement on the future of the Trident programme. [6510]
    The Secretary of State for Defence (Mr. George Robertson): We will retain Trident to provide a minimum credible deterrent while pressing for the verifiable global elimination of nuclear weapons.
    Mr. Collins: Will the Secretary of State clarify his ambiguous comments in The Daily Telegraph last week? Will he commit himself and the Government to deploy the same number of Trident submarines, Trident missiles and Trident warheads as the previous Government?
    Mr. Robertson: There is nothing ambiguous about what I say. We will deploy only the minimum number of warheads required for credible deterrence in current circumstances in our Trident submarines. If the circumstances allow reductions in the size of our capabilities, we will be prepared to make them, while ensuring that we retain an effective deterrent.
    Mrs. Gilroy: Does the Secretary of State recall the commitment given to retaining Trident—[Horn. MEMBERS: "Reading."]—while working for global disarmament clearly given in our manifesto and in "The Road to the Manifesto" and endorsed and ratified by the whole of the party? As it is a matter of considerable concern to constituents in Plymouth, Sutton, can he now confirm that the retention of Trident will not be a matter for the current defence review?
    Madam Speaker: Before I call the Secretary of State, may I remind the House that we do not read parliamentary questions? This is why barracking comes from various parts of the House when this happens; it is quite unnecessary. I have said a number of times that Members should not read questions. I am sure that, during lunchtime, the questions can be worked out so that there is not always a need to refer to notes.
    Mr. Robertson: I think some of the barracking comes from the guilty conscience of a group of people who do not seem to recognise that, when one makes promises in an election manifesto, one is expected to keep them—but that is why they are on the Opposition Benches now, not the Government Benches.
    My hon. Friend represents an area where there is a keen interest in that issue and she is right to raise it in the House. We made a specific commitment, not just in our manifesto but in the draft document put to party members last year, to retain Trident as the basic minimum deterrent for this country. The Labour party has every intention of keeping to the promises that it made.

    NATO Enlargement
    Liz Blackman: To ask the Secretary of State for Defence if he will make a statement on progress towards NATO enlargement. [6511]
    Mr. George Robertson: Last week's NATO summit decided to invite the Czech Republic, Hungary and Poland to begin accession talks. The alliance expects to extend further invitations in coming years to nations willing and able to assume the responsibilities and obligations of membership and as NATO determines that the inclusion of those nations would serve the overall political and strategic interests of the alliance and that the inclusion would enhance overall European security and stability.
    Liz Blackman: I thank my right hon. Friend for his answer. Given that NATO membership, once granted, is irreversible, does he agree that it is vital that we manage the expectations of future applicants carefully and that NATO retains control over future enlargement?
    Mr. Robertson: My hon. Friend makes a valid and practical point: once NATO membership has been granted, it is an irreversible fact. As we made clear at last week's NATO summit in Madrid, NATO is a military alliance, not a political club. That has been the key to its success over the past 48 years and it is one of the main reasons why so many European countries want to become members. In the long run, further NATO enlargement will serve the interests of the alliance and this country, but decisions on candidates cannot be a matter for short-termism, politics or the pursuit of national agendas. It is a matter of acute importance, and the alliance's military effectiveness is what matters to all of us.
    Sir Peter Emery: First, will the right hon. Gentleman ensure that, to show our friendship towards those three countries, Britain will take a leading role and perhaps be the first to sign the protocol which will appear in October and the ratification in due course? Secondly, those three countries are only observers to the North Atlantic Assembly, which is the political wing of NATO. Will he advise assembly members now to admit them as full members?
    Mr. Robertson: I thank the right hon. Gentleman for his helpful remarks. This is not a partisan issue and I hope that the whole House agrees that last week's membership invitation to the three countries was in the interests of the alliance and that it will be applauded throughout the House. The chairman of the North Atlantic Assembly, Senator Roth, addressed last week's summit and was strongly applauded for his point of view about the importance of maintaining the parliamentary connection with the North Atlantic Assembly over the years. It is not a matter for the Government whether the new applicant members will be instantly admitted to the North Atlantic Assembly. I dare say that the assembly itself would want to make that decision.
    I hope that this country will be among the first to ratify, once the protocols have been agreed by the three countries. As the Prime Minister said last week, the House will first want an opportunity to debate that matter.
    Ms Squire: I welcome the agreement on NATO enlargement that was reached at last week's summit and

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    pay tribute to the part the Secretary of State played in it. Does he agree that it was also significant that enlargement was welcomed by the President of Ukraine and that, with the charter on co-operation and consultation recently drawn up with Ukraine and the NATO-Russia Founding Act it is a significant development in the promotion of stability and security in Europe?
    Mr. Robertson: I strongly agree with my hon. Friend. In many ways, last week's summit will go down in history as the defining moment for those of us in Europe who have lived for the day when tension would be reduced and security enhanced. We are not talking about a small enlargement; three countries will be admitted to the alliance if the invitation is taken up. It is the biggest expansion of the alliance so far. As my hon. Friend said, side by side with that development into former Warsaw pact territory is the new agreement signed with the Ukraine and the NATO-Russia Founding Act, which was signed only a few weeks before in Paris. We live today in more secure and certain times than any other generation since the second world war.
    Sir George Young: The House will recall that, when the Prime Minister made a statement about NATO enlargement last week, he was pressed on the issue of cost several times.
    Mr. MacShane: Reading.
    Madam Speaker: Order. It is in order for those at the Dispatch Box to read. The hon. Member for Rotherham (Mr. MacShane) has been here long enough to know that.
    Sir George Young: Does the Secretary of State recall the Prime Minister's assertion on that occasion? He said that he saw
    "no reason … why there should be a real-terms increase in NATO expenditure at all".—[Official Report, 9 July 1997; Vol. 297, c. 945.]
    The Secretary of State has just described the process as the biggest ever expansion of NATO. Upon reflection, would he like to qualify the Prime Minister's assertion?
    Mr. Robertson: The right hon. Gentleman really should know better. The burden of cost associated with expanding the alliance will come largely from the three new member countries because they will be expected to bear the infrastructure burdens that will be created. It is much too early to establish the full costs now, but the Government believe that they will be manageable within existing budgets. We shall see what happens in due course. In any event, that issue would not have been a moderating influence on the decision, which was taken for reasons other than cost.
    At present, Britain's net annual contribution to NATO in the civil, military and infrastructure fields is about £155 million—which is rather less than 1 per cent. of the total defence budget. I see no reason why that figure should rise significantly in real terms.
    Mr. Skinner: In the old days, we used to call for the disbanding of NATO and the Warsaw pact. Is it not odd that, now that three former Warsaw pact countries have jumped on the NATO bandwagon and another half dozen
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    countries want to join the queue, British taxpayers have to pay more money to enlarge NATO when our supposed enemies are enemies no more? The truth is that there will be an additional cost, which my right hon. Friend said would be borne "largely"—I think that that is the word he used—by the new member countries. That means that, despite the expansion, those countries will cost the British taxpayer more money.
    Mr. Robertson: I know that my hon. Friend agrees that the robust defence of this nation is imperative. Our championing of that cause is one of the reasons we have done so well and why the crowd opposite were slung out of office. The Warsaw pact has gone, partly because of the collective security and defence policies for which NATO has stood over the years. We believe in collective defence and collective security, and the expansion of NATO will provide a degree of certainty for future generations.

    Strategic Defence Review
    Mr. Spring: To ask the Secretary of State for Defence when he expects to have completed his strategic defence review; and if he will make a statement. [6512]
    Mr. George Robertson: I expect the work of the strategic defence review to be completed around the turn of the year.
    Mr. Spring: In view of the importance of the strategic defence review and the uncertainty that it is causing both to our armed forces and to our procurement industries, I hope that it will be completed by no later than the end of the year. However, how does the right hon. Gentleman's assertion fit with the Treasury's comprehensive spending review, which is due to be completed only in the spring?
    Mr. Robertson: It takes special brass neck and cheek for a Conservative Member to get up and talk about the uncertainty caused by our defence review. The Conservatives were slung out of office because, without conducting any strategic defence review, they cut the defence budget and cut manpower by more than one third in the past five years. We will not take any lessons from them.
    The country welcomes the idea of taking a position, having a vision for our armed forces and establishing the country's priorities sensibly. We will complete the review by the turn of the year and it will also be the comprehensive spending review for our Department.
    Mr. Dalyell: In the strategic review, will account be taken of the safety of our forces, given the all too likely retaliation by the Serbs following the SAS operation? If there are to be any more such operations, would not it be wise to talk to the Russians first?
    Mr. Robertson: The safety of our troops and, indeed, of other British citizens serving in the former Yugoslavia, was one of our principal concerns before any decision was taken about serving indictments on those accused of war crimes. We made that clear beforehand and we have made it clear subsequently. We regard that obligation as absolutely paramount.

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    The exercise conducted last week by NATO troops, with British stabilisation force troops in the vanguard, revitalised the Dayton process by bringing to justice the people accused of those terrible crimes. We have acted not just for the future of Bosnia but for future standards of conduct in the world.
    Sir George Young: Are not the Government running a serious risk of getting into a muddle with two separate reviews? The Secretary of State's departmental review, which he hopes to complete by the end of the year, is foreign policy led and has scarcely any reference to resources, whereas the Treasury review, which will last a year, is Treasury led. If the Secretary of State thinks that he will complete his review by the end of the year and secure Treasury consent before the Treasury has completed its fundamental expenditure review, he is misleading himself. Will not the Treasury outgun his review?
    Mr. Robertson: No, because we do not operate like the previous Government. I said that we expect to complete the strategic defence review by the turn of the year. We are conducting it quickly enough to avoid the uncertainties and instabilities caused by the previous Government's savage cuts, but we will also take enough time to ensure that we do it properly and sensibly. That review will take the place of Ministry of Defence spending plans, and will offer certainty and vision to those who serve this country and its armed forces, for which they have been yearning over the past decade.
    Ann Clwyd: Given the Government's clear commitment to human rights, will my right hon. Friend review the procedures whereby army officers from countries with appalling human rights records are invited to buy arms at arms fairs in this country? Will he withdraw the invitation to three Indonesian generals, who were apparently invited by the previous Government to an arms fair in the United Kingdom in September?
    Mr. Robertson: We are always careful whom we invite to this country and about what we sell them. A major review is under way into the United Kingdom's defence sales. I hope that when my hon. Friend sees the results of that review, she will applaud it.

    Rents (Married Quarters)
    Mr. Brazier: To ask the Secretary of State for Defence what discussions he has had with the armed forces pay review body on the subject of rents for married quarters. [6514]
    Dr. Reid: My right hon. Friend the Secretary of State for Defence has had no recent discussions with the armed forces pay review body on the subject of rents for married quarters. However, my Department will, as normal, be submitting evidence for the review body's annual assessment of charges.
    Mr. Brazier: Does the Minister agree that, in this time of overstretch in the armed forces, the maintenance of families within their communities is a particular priority, especially in the Army? Does he further accept that there is considerable concern among many Army families that
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    the AFPRB wants to link rents to two thirds of civilian mortgage payments, bearing it in mind that mortgage payments lead to the ownership of a house? Finally, does he agree that there is a strong case for persuading the AFPRB that, in striking a balance between pay, allowances and rents, at least within those forces that have an accompanied service policy, encouragement should be given to the wives and families who make the sacrifice of travelling with their husbands as part of the service community?
    Dr. Reid: This is an extremely complex subject, in which the hon. Gentleman has a great deal of expertise. I have read his letter and pamphlet. He may be surprised to learn that I find many of his points pertinent, and one or two of them persuasive. I have therefore instructed my officials to give me advice. When they have done so, perhaps the hon. Gentleman would care to discuss the matter with me in the Ministry of Defence.

    Defence Procurement Budget
    Mr. Burns: To ask the Secretary of State for Defence if he will make a statement on current expenditure on the defence procurement budget. [6515]
    Mr. Spellar: In the current financial year, we expect to spend about £9 billion on defence equipment.
    Mr. Burns: Does the Minister accept that hundreds of thousands of jobs rely on the defence procurement budget, including several thousand such jobs in my constituency, Chelmsford, West? Is the Minister aware of the growing concern that as the strategic review is Treasury driven, the defence procurement budget is at great risk? Will he reassure my constituents and others who work in the defence industries throughout the country that during the life of this Parliament there will be no real-terms cut in the defence procurement budget, and that our armed forces will get the best equipment to enable them to protect the realm?
    Mr. Spellar: The hon. Gentleman may not have read out that question but it is certainly one that he prepared earlier, before he heard the response of my right hon. Friend the Secretary of State on the levels of defence spending of the previous Government. Uncertainty arose in the defence industry because of the huge cuts made by the previous Government.
    First, it has been made clear that the defence review is foreign policy led, not Treasury led. Secondly, in a well-known article in The Daily Telegraph before the general election, my right hon. Friend the Prime Minister gave a commitment to the maintenance of the defence budget for the next two years. Thirdly, we have made it clear that during the strategic defence review there will not be a moratorium on equipment provision. We shall, of course, have to consider our equipment disposition after the review, given the needs of the country. We wish only that the previous Government had examined procurement requirements and the proper overall strategic needs of the United Kingdom, rather than engaging in ramshackle cutting.
    Mr. McAllion: Will my hon. Friend tell the House by which month the decision whether to buy seven Trident

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    missiles from the United States in US fiscal year 1998 will have to be taken? If the decision is taken to purchase these missiles, will he confirm that the cost will be about £89 million at current exchange rates? Will he explain why the decision cannot be postponed until the end of the strategic review, thereby keeping open at least the prospect of saving a substantial sum of public money?
    Mr. Spellar: Again, I would have hoped that my hon. Friend had listened to the comments of my right hon. Friend the Secretary of State for Defence about Trident and our need to maintain the minimum deterrent. We shall obviously carry out an evaluation during the defence review.
    Mr. Key: Of course we are all interested in stability in the armed forces procurement programme. That being so, why did the Government confirm on Thursday, in answer to a planted question, that defence procurement projects already on contract are being considered as part of the defence review and are therefore subject to cancellation by the Treasury? Such projects must include the Eurofighter, EH101, Apache and others. Is the Minister able to name one procurement project that he can guarantee will not be cancelled?
    Mr. Spellar: I am extremely surprised that the Conservative party is reverting to the position that it took before the election and trying to create unnecessary alarm. I shall read the answer to which the hon. Gentleman referred. It stated that
    "during the review there will be no moratorium and projects where contracts have already been placed will continue."
    The hon. Gentleman should have read out the whole answer, instead of only the part that suited his political purposes. The key point in that answer is that
    "projects where contracts have already been placed will continue. Decisions on major equipment programmes not yet under contract will be considered on their individual circumstances".—[Official Report, 10 July 1997; Vol. 297, c. 531.]
    That applies to all Governments who carry out defence reviews.

    Joint Projects (French Armed Forces)
    Mr. MacShane: To ask the Secretary of State for Defence if he will list the joint projects currently undertaken with the French armed forces; and if he will make a statement. [6516]
    Dr. Reid: Today, on Bastille day, I am delighted to say that defence co-operation with the French armed forces is extensive, both bilaterally and multilaterally. As my hon. Friend knows, the joint projects that we have with the French are too numerous for me to list here today.
    Mr. MacShane: I am grateful to the Minister for his reply. Is he aware that a year ago British warplanes flew over the Champs Elysées to salute the new Labour values of liberty, equality and fraternity? Does he agree that for three reasons—co-operation on the ground in Bosnia, procurement to create an effective European arms industry and, most important, ensuring that France plays a full and
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    integrated role in the North Atlantic alliance and in European defence matters—Britain and France must co-operate as fully in the future as we have in the past?
    Dr. Reid: Yes, indeed. That co-operation will be taken further on Wednesday when my right hon. Friend the Secretary of State for Defence meets Mr. Alain Richard. I am glad to reassure my hon. Friend that military co-operation with our French allies is as wide as ever, whether it be on the ground in Bosnia, over the skies of Iraq, through the many joint activities with the Royal Navy or through the procurement of the common new-generation frigate. Although there is no United Kingdom participation in the Bastille day parade, we are reciprocating last year's invitation in that we have invited the French air force, under the auspices of the Franco-British European air group, to participate in this year's Lord Mayor's show on 8 November. We look forward to developing even further our mutual co-operation with our French allies.
    Mr. Sayeed: If NATO were required to defend Hungary, French forces would be involved. Will the Minister explain how NATO would defend Hungary if it were attacked? Hungary is surrounded by non-NATO members with large armed forces.
    Dr. Reid: I am not entirely sure what that has to do with French integration into NATO. However, I assure the hon. Gentleman that all states that become members of NATO enter as full members, so the treaty obligations for the defence of any of those members apply to all the other members, and this country will carry out its obligations.

    Anti-personnel Land Mines
    Helen Jones: To ask the Secretary of State for Defence what representations he has received in respect of his policy on anti—personnel land mines. [6517]
    Mr. George Robertson: I have reviewed a wide range of representations welcoming the Government's policy on anti-personnel land mines.
    Helen Jones: I thank my right hon. Friend for his reply. Will he reassure my constituents who have written to me on this matter that the exceptional use of land mines will be confined largely to circumstances in which the lives of British troops are at risk? Will he also reassure the House that if such land mines were to be used, we would de-mine those areas after hostilities had ceased?
    Mr. Robertson: My hon. Friend is absolutely right. The exceptional circumstances in which the military might ask for those instruments to be used would be limited. The decision would be taken by Ministers, and any such decision would be reported to Parliament. In such exceptional circumstances, all land mines would be plotted and would be taken up.
    May I take this opportunity to clarify something that I said at Defence questions a month ago? I am advised that, contrary to my earlier understanding, it is not possible at present for my Department to say categorically that all anti-personnel land mines laid by Britain in the past were subsequently taken up. I now understand that

    15
    one mine laid in the Falklands is unaccounted for, and that a number were not removed after the Gulf conflict. We currently know of 12 mines that were left in Iraq, and my Department is trying urgently to establish the full facts.
    Dr. Tonge: Will the Secretary of State again clarify the words "exceptional use"? Is he saying that, if a military commander wishes to use land mines, in the interests of the British armed forces, he will go to the right hon. Gentleman and his decision will have to be ratified by the House before he is allowed to use those mines? That seems a strange way of conducting a military campaign.
    Mr. Robertson: I assure the hon. Lady that there is nothing unusual about it. We would agree to suspend our moratorium on the use of anti-personnel land mines only if we were satisfied that, in a specific operation, the security of our forces would be jeopardised without them. As in many other cases, the military commanders and chiefs of staff would come to Ministers to seek agreement. Parliament would not be ratifying the decision, but would be informed of it.

  CHURCH COMMISSIONERS

    Clergy Stipends and Pensions
    Sir Sydney Chapman: To ask the hon. Member for Middlesbrough, representing the Church Commissioners, if he will make a statement on the annual amount and proportion of the Church Commissioners' revenue allocated to clergy stipends and pensions. [6500]
    Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): In 1996, the commissioners' total expenditure on behalf of the Church was £136.2 million. Of that, £32.5 million, or 24 per cent., went on stipends, and £79.6 million, or 58 per cent., went on pensions for the clergy.
    Sir Sydney Chapman: I thank the hon. Gentleman for his answer, and welcome the Church Commissioners' achievement in recreating a diversified and prospering asset base in order largely to meet the cost of clergy pensions and stipends. Will he confirm that the commissioners have also achieved the objective of having 50 per cent. or more of their funds in equities? Does not the recent movement of the stock markets augur well for the ability of the Church Commissioners to play an even greater part in meeting the cost of, in particular, clergy pensions in the next financial year?
    Mr. Bell: I thank the hon. Gentleman for what he has said. He will know that, in 1996, the return on assets of some £3,000 million was 17 per cent. That was a good achievement on the part of the commissioners. Income last year was £145.8 million, and the year before that it was £137 million. I can confirm that 70 per cent. of the commissioners' stock exchange assets are in UK stocks and shares. The market is buoyant, the economy is doing well and there is every confidence in the future. That is good news for the Church, for those who rely on the Church and for anyone who wants to see just how well the Church Commissioners can invest their money.
    Mr. Cohen: Did my hon. Friend note the silly and unreasonable court judgment that was reached at the end
    16
    of last week—that clergymen do not have a terrestrial employer? It is recorded that water was once turned into wine, but not that hot air can be turned into wages. Will my hon. Friend assure us that the Church Commissioners will be a responsible employer on earth?
    Mr. Bell: When I attended the Durham miners' gala on Saturday, my noble Friend Lord Dixon said that I was God's shop steward. The decision at the industrial tribunal last week related to the actual work of the clergy, and to whom the clergyman owed his duty in the cure of souls. It is not, however, for the Church Commissioners to involve themselves in the decisions of industrial tribunals. As I implied in my response to the hon. Member for Chipping Barnet (Sir S. Chapman), their work involves dealing with assets, and investment of those assets, in the interests of the Church.

    Investment Income
    Mr. Simon Hughes: To ask the hon. Member for Middlesbrough, representing the Church Commissioners, what are the policies of the commissioners for maximising the investment income of the Church of England. [6501]
    Mr. Stuart Bell: The commissioners are anxious not only to maximise investment income but to maximise the value of the assets themselves. As I said in response to an earlier question, the commissioners' portfolio has been repositioned. Of our stock exchange investments, we have 70 per cent. invested in United Kingdom shares; 10 per cent. in shares elsewhere; 11 per cent. in United Kingdom fixed interests; and a large portfolio of agricultural and other property.
    Mr. Hughes: I thank the Minister and take this opportunity to welcome him to his new job and wish him well. The Church of England has performed a minor miracle in rescuing itself from some unwise investment decisions much more quickly than investors normally do. Has it addressed the Budget's implications for its investments and, in particular, the effect of the removal of tax credits on dividends, which must have a severe impact? If that reduces the Church's income, what will it do to persuade its earthly or other masters to take action in its interests in the coming year?
    Mr. Bell: I am grateful to the hon. Gentleman for his kind comments. I have had discussions with the Church Commissioners on the removal of advance corporation tax to ascertain its impact in future years. We may make submissions to my right hon. Friend the Chancellor of the Exchequer.
    Mr. Bayley: Does my hon. Friend agree that in the case of investment in land or in rights over land, such as shooting rights, a body such as the Church Commissioners should balance the maximisation of its income from those assets against other considerations, such as public access to that land?
    Mr. Bell: I am grateful to my hon. Friend. It is always the intention of the Church Commissioners to maximise the value of their investments in relation both to income and to the value of the asset. Clearly, they must reconcile

    17
    that aim and the impetus of their investments with wider social considerations such as the one to which my hon. Friend refers.

    Ethical Investments
    Mr. Baker: To ask the hon. Member for Middlesbrough, representing the Church Commissioners, what is the policy of the Church Commissioners in respect of ethical investments. [6502]
    Mr. Stuart Bell: The hon. Gentleman might like to know that the Church Commissioners have pursued ethical investment policies for longer than anyone else. Way back in 1948, the Church gave the lead when apartheid became a statutory regime in South Africa, and it banned investment in companies that were dealing with South Africa. The hon. Gentleman will be pleased to know that I was at the Synod in York on Saturday where there was a useful and constructive debate on ethical investment. The Church Commissioners are concerned to balance and reconcile their duty to maximise their investments with ethical judgments from within the Church.
    Mr. Baker: I am pleased that the issue is apparently being taken seriously by the Church Commissioners. Is the Minister aware that the commissioners are investing a seven-figure sum in a company called Monsanto, which is responsible for the production of the Agent Orange pesticide which led to an out-of-court settlement of $180 million? Is he further aware that the company had to pay a fine in New York because of misleading advertising which claimed that it was environmentally friendly? Is he also aware that the company is responsible for and is at the leading edge of genetic engineering, which some of us regard as playing God with the building blocks of life? Does the hon. Gentleman think that investment in that company is consistent with the tenets of Christianity, and will he take steps to disinvest in Monsanto?
    Mr. Bell: The question of Agent Orange goes back to the Vietnam war in the 1970s. It would not be appropriate in the House to go into specific cases, but if the hon. Gentleman wishes to write to me on the matter, I shall consider it. There is constant dialogue between companies that are involved in various activities and the Church Commissioners. As a so-called guru of corporate governance in the Labour party, I am interested in looking at various codes of conduct and at ethical investment and in updating them, if that is needed. I want to be sure that we reconcile the Church's ethical criteria with its right and duty to maximise its income.
    Ann Clwyd: As my hon. Friend knows, the Church Commissioners say that they do not invest in companies
    18
    that deal mainly in arms. GEC is now the second largest producer of arms in this country and it is expanding its production. What is the cut-off point? What is the precise meaning of "mainly"?
    Mr. Bell: I am grateful to my hon. Friend for her question. The Church of England's ethical investment working group, which includes a number of investing bodies and their staffs, has established contact with GEC, which has given assurances that it is in the business of defence-related equipment that is sold to the Government and to other NATO Governments. All of that is done under licence. The ethical investment working group and the commissioners continue to maintain close oversight on what companies are doing, where they are investing and their proposals. All investment decisions are taken after that close co-operation and in the light of companies' decisions.

    Pensions
    Mr. Flynn: To ask the hon. Member for Middlesbrough, representing the Church Commissioners, what new proposals he has to improve the finances of the Church of England in relation to pensions. [6503]
    Mr. Stuart Bell: We aim to maximise investment income and to secure an appreciation in the value of our assets. That is the best way in which to improve the finances of the Church of England in relation to pensions. That is the short answer to my hon. Friend. The longer answer is that, as he knows, earlier this year, the House approved a new pension scheme, which transfers the liability for future service pensions to dioceses for the majority of clergy. The commissioners will remain responsible for all past service pensions and for pension contributions into the new fund for some senior clergy whose stipends they meet directly.
    Mr. Flynn: Recalling the financial turmoil that the Church was in when many clergymen left it because of the recognition of the priesthood of women, has my hon. Friend made any financial assessment of what might happen if there were another large exodus of such clergymen, following weekend reports that up to a third will refuse to take the Loyal Oath if the heir to the throne remarries?
    Mr. Bell: We have not considered how many clergy may resign on that basis. A number of surveys were published at the weekend. The bishops declared most of them useless. Such hypothetical questions are not of great interest to the Church in the sense that its investments and the return of income are sound. We hope to continue on that course.

"Yesterday in Parliament"
3.30 pm
Mr. David Winnick: On a point of order, Madam Speaker. I believe that you have on occasion expressed concern at the lack of media reporting of Parliament and, as hon. Members know, the press no longer report our proceedings. I should therefore like to draw your attention—because I believe that it is a matter of serious concern to the House—to the fact that it is widely reported that the BBC intends to drop "Yesterday in Parliament", replacing it, apparently, with some panel discussion. It would be extremely unfortunate if that report were true, and if a decision on those lines were taken soon. Would it be possible for you, as our Speaker, strongly to urge the BBC to reconsider any such move?
Decisions taken in the House affect millions of people outside. Those who listen to the programme—an audience, I understand, of well over 1 million in the morning—are surely entitled to know what went on during the previous day in the House of Commons and in the House of Lords. The broadcasting organisations at the time were very keen that this House should have broadcasting facilities, and, as we know, it has been in operation for some 19 years.
The BBC is a public service organisation—at times, of course, it gives the impression that it is nothing of the kind. It has a duty to continue to broadcast not only "Today in Parliament", but "Yesterday in Parliament". The people who run the BBC should not come to the view that what we do here is of no importance, that some panel discussion can take place, and that we should be satisfied with it.
Indeed, it is the public far more than ourselves who should decide whether they should be satisfied or not. There is a strong case that "Yesterday in Parliament", which, after all, a few years ago was drastically reduced in length, should continue. I hope that you agree, Madam Speaker, that that is the view that you would wish to express as the Speaker of the House of Commons.
Several hon. Members: Further to the point of order.
Madam Speaker: My goodness. I will take Sir Patrick Cormack first. We cannot have a debate on these matters. Members must put their point of order to me.
Sir Patrick Cormack: Thank you, Madam Speaker. You will, of course, remember that,
20
last year, you were the guest of honour at the 50th anniversary of "Today in Parliament", which was held in the House. Therefore, would you, on behalf of the House and representing Members on both sides of the Chamber, at the very least express to the BBC how much importance we attach to those two programmes, and how greatly they are valued by our constituents?
Several hon. Members rose—
Madam Speaker: I will take one more point of order from either side of the Chamber. Mr. MacShane.
Mr. Denis MacShane: Is not the point about "Yesterday in Parliament" that it is the only direct connection between Parliament and the people that is not filtered by the distinguished cohort of scribblers, sketch boys, soundbiters and spin doctors who sit above you, Madam Speaker? Were it to be axed, frankly, I wonder whether the House's support for the continuation of publicly funded broadcasting in the form of the BBC would not take a serious knock. That worries me considerably.
Mr. Eric Forth: Further to that point of order, Madam Speaker. Is it not possible that the BBC's attitude has been influenced by the fact that, as Ministers now come to this House so rarely—and when they do, they do not answer our questions—covering the proceedings of the House, as the BBC has done for so many years, is a waste of its time, of taxpayers' money and, arguably, of the time of the House?
Madam Speaker: That is moving away from a serious point of order.
The concern expressed by hon. Members has been felt in all parts of the House. That concern is shared by millions of people; indeed, I share it myself.
The hon. Member for Walsall, North (Mr. Winnick) may wish to refer the matter to the Select Committee on National Heritage. Knowing the view of the House, I will certainly make representations to the BBC, on behalf of the House.
Mr. Winnick: Thank you very much, Madam Speaker.

Finance Bill (Allocation of Time)
3.35 pm
The Financial Secretary to the Treasury (Dawn Primarolo)rose—
Mr. Norman Baker: On a point of order, Madam Speaker. I am sorry to interrupt the Minister, but I want to raise a serious matter.
Last Wednesday, I introduced a debate on freedom of information. I was given an assurance by the Parliamentary Secretary, Office of Public Service, that the Government would issue a White Paper very shortly and that it remained
"my right hon. Friend's intention to do this before the House rises in a few weeks' time."—[Official Report, 9 July 1997; Vol. 297, c. 907.]
Barely was that debate concluded than we heard through the media, not through the House, that there was no such intention. For reasons that are not clear, the proposal to publish a White Paper has now been delayed indefinitely yet again. Therefore, the information given to the House on Wednesday was incorrect.

TABLE

Allotted day

Proceedings

Time of conclusion of proceedings

First day

Clause 1

7:00 p.m.

Clause 15

10:00 p.m.

Second day

Clause 17

7:00 p.m.

Clause 19

10:00 p.m.

(3) When the Order of the day is read for the House to resolve itself into a Committee on the Bill, the Speaker shall leave the chair without putting any Question and the House shall resolve itself into a Committee forthwith whether or not notice of an instruction to the Committee has been given; and Standing Order No. 66 (Committee of the whole House on bill) shall not apply.
(4) No Motion shall be made as to the order in which proceedings are to be considered in Committee of the whole House.
(5) Standing Order No. 82 (Business Committee) shall not apply in relation to the proceedings to which this paragraph applies.
Standing Committee
2.—(1) The Standing Committee to which the remainder of the Bill is allocated shall report the Bill not later than 23rd July.
(2) The Standing Committee shall have leave to sit twice on the first day on which it shall meet.
(3) Proceedings in the Standing Committee on 23rd July may continue until Ten o'clock whether or not the House is adjourned before that time, and if the House is adjourned before those proceedings have been brought to a conclusion, the Standing Committee shall report the Bill to the House on 24th July.
Report and Third Reading
3.—(1) Proceedings on consideration and Third Reading shall be completed in two allotted days and shall be brought to a conclusion at Ten o'clock on the second of those days.
(2) The Third Reading may be proceeded with at the conclusion of the proceedings on consideration, notwithstanding the practice of the House as to the interval between stages of a Bill brought in on Ways and Means resolutions.
Business Committee
4.—(1) For the purposes of Standing Order No. 82 (Business Committee) paragraph 3 of this Order shall be taken to allot to the proceedings on consideration such part of the allotted days as the Resolution of the Business Committee may determine.
Will you, Madam Speaker, require the Government to come to the House and correct that information, so that we know where we are with the legislation? Civil servants have been blamed for the delay, but some of us think that some part of the Government may be responsible.
Madam Speaker: I should be much obliged if the hon. Gentleman would give me an opportunity to look at the Hansard to which he referred, so that I can make myself familiar with the exchange that took place. I shall take appropriate action if I find that to be necessary.
Dawn Primarolo: I beg to move,
That the following provisions shall apply to the remaining proceedings on the Finance Bill:—
Committee of the whole House
1.—(1) The proceedings in Committee of the whole House shall be completed in two allotted days.
(2) The proceedings to be taken on each of those days shall be as shown in the second column, and shall be brought to a conclusion at the times specified in the third column, of the following Table:—
(2) The Business Committee shall report to the House its Resolution as to the proceedings on consideration of the Bill, and as to the allocation of time between those proceedings and proceedings on Third Reading, not later than 25th July.
(3) Any resolution of the Business Committee may be varied by a further Report of the Committee under Standing Order No. 82, whether before or after the date on which the Committee is to report under this paragraph and whether or not that Resolution has been agreed to by the House.
(4) No Motion shall be made as to the order in which proceedings are to be taken on consideration, but the Resolutions of the Business Committee may include alterations to that order.
Procedure in Standing Committee
5.—(1) At a sitting of the Standing Committee at which any proceedings on the Bill are to be brought to a conclusion under a Resolution of the Business Sub-Committee, the Chairman shall not adjourn the Committee under any Order relating to the sittings of the Committee until those proceedings have been brought to a conclusion.
(2) No Motion shall be made in the Standing Committee relating to the sitting of the Committee except by a Minister of the Crown, and the Chairman shall permit a brief explanatory statement from the Member who moves, and from a Member who opposes, the Motion, and shall then put the Question thereon.
(3) No Motion shall be made as to the order in which proceedings are to be considered in the Standing Committee, but the Resolutions of the Business Sub-Committee may include alterations in that order.
Report of proceedings in Committee
6. On the conclusion of the proceedings in any Committee on the Bill, the Chairman shall report such of the Bill's provisions as were committed (or re-committed) to that Committee to the House without putting any Question.
Dilatory Motions
7. No dilatory Motion with respect to, or in the course of proceedings on, the Bill shall be made in the Standing Committee or on an allotted day except by a Minister of the Crown; and the Question on any such Motion shall be put forthwith.
Exempted business
8. On an allotted day paragraph (1) of Standing Order No. 15 (Exempted business) shall not apply by virtue of paragraph (a) of that paragraph to any proceedings on the Bill after the conclusion of all the proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion on that day.
Private business
9.—(1) Any private business which has been set down for consideration at Seven o'clock on an allotted day shall, instead of being considered as provided by Standing Orders, be considered at the conclusion of the proceedings on the Bill on that day.
(2) Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the proceedings on the Bill or, if those proceedings are concluded before Ten o'clock, for a period equal to the time elapsing between Seven o'clock and the conclusion of those proceedings.
Conclusion of proceedings
10. For the purpose of bringing to a conclusion any proceedings which are to be brought to a conclusion at a time appointed by this Order or a Resolution of the Business Committee or the Business Sub-Committee and which have not previously been brought to a conclusion, the Chairman or the Speaker shall forthwith put the following Questions (but no others)—

(a) any Question already proposed from the Chair;

(b) any Question necessary to bring to a decision a Question so proposed (including, in the case of a new Clause or new Schedule which has been read a second time, whether before the time so appointed or in pursuance of paragraph (a), the Question that the Clause or Schedule, or the Clause or Schedule as amended, be added to the Bill);

(c) the Question on any amendment moved or Motion made by a Minister of the Crown;

(d) any other Question necessary for the disposal of the business to be concluded;

and on a Motion so made for a new Clause or new Schedule, the Chairman or the Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
11.—(1) Proceedings under paragraph 10 of this Order shall not be interrupted under any Standing Order relating to the sittings of the House.
(2) If an allotted day is one on which a Motion for the adjournment of the House under Standing Order No. 24 (Adjournment on specific and important matter that should have urgent consideration) would, apart from this Order, stand over to Seven o'clock and proceedings to which this Order applies have begun before that time—

(a) that Motion shall stand over until the conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion at or before that time;

(b) the bringing to a conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion after that time shall be postponed for a period equal to the duration of the proceedings on that Motion.

(3) If an allotted day is one to which a Motion for the adjournment of the House under Standing Order No. 24 stands over from an earlier day, the bringing to a conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business
24
Committee, are to be brought to a conclusion on that day shall be postponed for a period equal to the duration of the proceedings on that Motion.
Supplemental orders
12.—(1) The proceedings on any Motion made in the House by a Minister of the Crown for varying or supplementing the provisions of this Order (including anything which might have been the subject of a report of the Business Committee or the Business Sub-Committee) shall, if not previously concluded, be brought to a conclusion one hour after they have been commenced.
(2) Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to those proceedings.
(3) If on an allotted day on which any proceedings on the Bill are to be brought to a conclusion at a time appointed by this Order or a Resolution of the Business Committee the House is adjourned, or the sitting is suspended, before that time no notice shall be required of a Motion made at the next sitting by a Minister of the Crown for varying or supplementing the provisions of this Order.
Saving
13. Nothing in this Order or a Resolution of the Business Committee or the Business Sub-Committee shall—

(a) prevent any proceedings to which the Order or Resolution applies from being taken or completed earlier than is required by the Order or Resolution; or

(b) prevent any business (whether on the Bill or not) from being proceeded with on any day after the completion of all such proceedings on the Bill as are to be taken on that day.

Recommittal
14.—(1). References in this Order to proceedings on consideration or proceedings on Third Reading include references to proceedings at those stages respectively, for, on or in consequence of, recommittal.
(2) On an allotted day no debate shall be permitted on any Motion to recommit the Bill (whether as a whole or otherwise), and the Speaker shall put forthwith any Question necessary to dispose of the Motion, including the Question on any amendment moved to the Question.
Interpretation
15. In this Order—
"allotted day" means any day (other than a Friday) on which the Bill is put down as first Government Order of the Day, provided that a Motion for allotting time to the proceedings on the Bill to be taken on that day either has been agreed on a previous day, or is set down for consideration on that day;
"the Bill" means the Finance Bill;
"Resolution of the Business Committee" means a Resolution of the Business Committee as agreed to by the House; and
"Resolution of the Business Sub-Committee" means a Resolution of the Business Sub-Committee as agreed to by the Standing Committee.
It is regrettable that we should have to move this motion, but I make absolutely no apology for doing so. I will explain the reasoning behind it, because it is important that not only the House but people outside understand what is at stake and why it is vital that the Finance Bill be on the statute book before the summer recess.
The Budget represents the people's priorities, and the guillotine motion is necessary to protect those priorities. The British people voted for a cut in VAT on fuel to 5 per cent., and the Finance Bill cuts VAT on fuel to 5 per cent. We promised that the cut would be in time for winter bills, and this Finance Bill introduces it by 1 September. The British people voted for a windfall levy on the excess profits of the privatised utilities to help us to move people

25
back into work. They voted for this Government because we said that education would be our No. 1 priority, and we meant it—£1.3 billion from the windfall levy will be used to rebuild our crumbling schools.
We are as keen as anyone to ensure that the provisions of the Finance Bill are properly aired and scrutinised, both within this House and beyond. It was possible to reach an agreement through the usual channels on the number of days to be allocated to the Budget debate. It was possible to reach agreement through the usual channels on the start date for the Committee stage. It was also possible to reach agreement through the usual channels on the size of the Standing Committee, and to agree the Opposition's request on what it should be. Unfortunately, it was not possible to reach agreement through the usual channels on the timing of the Committee stage.
We asked the Opposition what they wanted, but they could not tell us, and were not prepared to discuss the matter. It was therefore not possible to agree on an end date for the Committee stage. Such a result is highly regrettable, but it leaves the Government with no choice but to act responsibly in ensuring that—as soon as reasonably possible in the financial year—taxpayers are certain where they stand. It is in absolutely no one's interest that uncertainty over the precise terms of tax legislation should continue into the autumn.
I do not need to remind hon. Members that we are already more than a quarter of the way through the current financial year, or that, if the motion is adopted, almost one third of the financial year will have elapsed before the Bill is enacted. Any risk of delay into the autumn would be grossly unfair to taxpayers, who might not know precisely where they stand when they are more than halfway through the financial year.
Uncertainty might, of course, be a price worth paying if it were absolutely necessary to ensure that the measures in the Bill were properly scrutinised. It is not at all necessary, however, to keep taxpayers in a state of suspense by risking delay into the autumn. Furthermore, our Finance Bill will receive more generous scrutiny than that provided by the previous Government.
We have ensured that the four main issues that the Opposition wanted to be debated on the Floor of the House will be debated on the Floor of the House. Last Thursday, we even assisted the Opposition in amending their own motion, so that it was absolutely correct.
We have, moreover, provided two entire days for debate in Committee on the Floor of the House. That is the same amount of time that the previous Government allowed for their 1996–97 Finance Bill, which had twice as many clauses as our Bill, and for their 1995–96 Finance Bill, which had almost four times as many clauses as our Bill.
The Standing Committee considering the Finance Bill will be able to meet for five days. Earlier this year, a Standing Committee had nine days to consider the previous Government's Finance Bill, which had twice as many clauses as our Finance Bill. Therefore, we are being rather more generous with Committee time than the previous Government.
Mr. Edward Garnier: On today's Order Paper, the Minister will see that the second day of debate on the Finance Bill will be devoted to clauses 17 and 19. Clause 19 deals with pension fund tax credits. As she has told us that the public voted for the Budget and for the
26
consequent Finance Bill, will she tell me, please, where I might find reference in the Labour party's manifesto to pension fund tax credits?
Dawn Primarolo: The hon. and learned Gentleman confirms the point that I was just making—that the Opposition have tabled for debate the issues that they consider to be very important. Those debates will be held on the Floor of the House. The previous Government's Finance Bills enacted full Budgets, and were introduced on the back of an amendment of the law resolution, which allowed for a wide-ranging review of financial matters.
Mr. Eric Forth: Will the Minister give way?
Mr. Garnier: On a point of order, Madam Speaker. I wonder whether you would check the loudspeaker arrangements? I am not at all sure that the Minister heard my question. From her answer, she either was not listening or is wilfully refusing to answer my question.
Madam Speaker: That is hardly a point of order for me. I am not responsible for the statements of Ministers. They are responsible for their own comments.
Dawn Primarolo: As I said, the previous Government's Finance Bills enacted full Budgets, and were introduced on the back of an amendment of the law resolution, which allowed for a wide-ranging review of financial matters. Consistent with the approach adopted by previous Administrations in post-election Budgets, in 1983 and 1987, the specific legislative measures in our Financial Bill are more narrowly focused, without requiring an amendment of the law resolution.
Mr. Forth rose—
Dawn Primarolo: I shall finish this point and then give way to the right hon. Gentleman.
We might therefore, with some justification, have shortened the time for debate. Instead, as I have already explained, we gave four days to the Budget debate, the same time in Committee on the Floor of the House and, pro rata, more time in Standing Committee than the previous Administration gave for a full Finance Bill. That is ample opportunity to scrutinise the Bill.
Mr. Forth: Given that the hon. Lady has rested her argument firmly on people's expectations, which is why the Bill has to be rushed through the House, will she please explain the expectations and urgency of people with pensions to see their pension position worsened? Will she also answer the question asked by my hon. and learned Friend the Member for Harborough (Mr. Garnier) about the absence of any reference to the pension provisions in the Labour party's manifesto?
Dawn Primarolo: I am sure that the right hon. Gentleman will agree that what is important is certainty, and that the taxpayer knows what the tax legislation is. The uncertainty caused for taxpayers by delaying until the autumn would be unacceptable. Delay would also prevent the Government's mandate from being enacted.
Mr. Peter Viggers: The Minister is making great play of the need for certainty, but surely she realises

27
that, if she rushes the Budget provisions through the House, uncertainty will follow. It is not Members of Parliament who need to debate but the world outside which needs to comment and think through the implications of the Budget.
On the matter of foreign income dividends, it has been necessary for the Paymaster General effectively to recant on part of the Budget already, and say:
"We are also looking sympathetically at the position of UK-based groups with a substantial amount of foreign income."—[Official Report, 4 July 1997; Vol. 297, c. 586.]
The Budget is being rushed through so fast that it has not been possible for the Government to take into account even the representations made so far.
Dawn Primarolo: I realise that it is difficult for the Opposition; opposition is very difficult without the resources of the civil service to assist, but the fact is that the Bill is not being rushed. As I am explaining, adequate time is being provided to scrutinise the Bill. Opposition Members would do well to acknowledge that.
Mr. Quentin Davies: Does the hon. Lady accept that an essential aspect of parliamentary scrutiny of any Bill is the ability of outside bodies—in this case, taxpayers' representatives, and taxpayers themselves—to respond to a Bill when it is published in draft form? It is vital that those of us considering the Bill on the Floor of the House or in Committee should be aware of the response of outside bodies. As the Bill was published only a week ago today, thus artificially foreshortening the process, it has been impossible for outsiders to consider carefully the import of the various proposals, which is necessary if we are to have an informed debate in Committee.
Dawn Primarolo: That is simply not the case. In 1979, the new Conservative Government held the Second Reading six days after publication of the Bill. We published our Bill in draft form six days before Second Reading.
Mr. Dennis Skinner: I have listened to these Tory Members of Parliament today and last Thursday speaking about the Bill and the arrangements for debate. I find it very odd that, a few years ago in the last Parliament when the Tories had a majority, they introduced what were known as the Jopling recommendations. One of those recommendations was that guillotines would be a matter of course.
Some of us warned the Tories that, when they got into opposition, they would regret the day that they walked through the Lobbies to get those recommendations through. I would like my hon. Friend to use the help that she has on the Front Bench to find out how many of the Tories who are yapping today about wanting more time went into the Lobbies to vote for the Jopling recommendations to cut out debate.
Dawn Primarolo: I understand that my hon. Friend was against those recommendations. He is entitled to complain. Conservative Members are not, because they supported them. When the shadow Leader of the House
28
was Under-Secretary of State for Social Security, she said during a guillotine debate that she regretted having to introduce the timetable motion—as we certainly do—but continued:
"However, it is important for the smooth conduct of both the remaining stages of the Bill and parliamentary business as a whole. I commend it to the House."—[Official Report, 9 July 1990; Vol. 176, c. 78.]
I am doing exactly the same today. It ill behoves Conservative Members who spoke on and voted for guillotine motions when their legislation was going through the House to attack the Government now.
Sir Peter Emery rose—
Dawn Primarolo: I have taken many interventions, and I shall give way to the right hon. Gentleman later, but I want to make some progress first.
I assure the House that the Government will pay close attention to the views of the Opposition when the Business Sub-Committee of the Standing Committee on the Finance Bill meets to discuss the passage of the Bill through Committee. The process will ensure that the Committee directs its attention to those areas of the Bill that merit it.
Our efforts to ensure that the Bill is properly scrutinised by the House and by those outside did not end with the agreements with the Opposition. We published the Bill in draft ahead of its formal publication, so that the full details of our proposals could be scrutinised by hon. Members and those outside as soon as possible. It has been possible to table amendments since last Monday evening—even before Second Reading.
Sir Peter Emery: Perhaps the hon. Lady will consult the Leader of the House, who is sitting next to her, about the aims of the Business Sub-Committee. Following on from what the hon. Member for Bolsover (Mr. Skinner) said, when there is a timetable, should not all sections of a Bill have adequate time to be debated? How is it possible for 15 major parts of a Bill—with many, many more paragraphs—and eight schedules to be properly and adequately debated in a Committee that it is suggested will meet for only five days?
That is nonsense, and it makes nonsense of any suggestion of meeting the Jopling recommendations, or even the proposals being put forward by the Leader of the House to the Select Committee on Modernisation of the House of Commons.
Dawn Primarolo: It is the job of the Business Sub-Committee of the Finance Bill Standing Committee to ensure that those parts of the Bill that need to be debated are adequately debated. We have provided adequate time in the guillotine motion for the scrutiny of the Bill. The right hon. Gentleman spoke in favour of the allocation of time for parliamentary debates in 1992. Presumably he favours the measure, to ensure the smooth running of the business of the House, and will support us today.
Mr. Richard Shepherd rose—
Dawn Primarolo: This must be the last time.
Mr. Shepherd: By what process of divination has the hon. Lady come to the conclusion that the debate on

29
pension funds and tax credits need last only slightly more than two and a half hours? The proposals are of concern to many Members of Parliament and their local authorities. What was the rationale behind providing for such a limited debate?
Dawn Primarolo: There is plenty of time in Committee, and it is the Opposition's choice as to how much time is available.
In 1993, when the previous Government guillotined the Social Security (Contributions) Bill and Statutory Sick Pay Bill to complete all their stages in one day, I do not recall that Conservative Members protested with such vigour as they are now apparently doing today.
Mr. Bernard Jenkin rose—
Dawn Primarolo: I have given way generously, and I must conclude soon, so that other hon. Members can participate in the debate.
The reason for the guillotine is certainty for the taxpayer. It will allow better consideration of the Bill, and will avoid the need to come back with a guillotine after the discussions have started. That could lead to greater problems when scrutinising the Bill.
In 1994, the Finance Bill was guillotined by the previous Government. The then Chief Secretary to the Treasury, Michael Portillo, who is no longer a Member of the House, said that the Bill could proceed through the House on only one of two bases—by agreement between the parties, or by guillotine. We could not get agreement from the Opposition. They want to prevent the Government from proceeding with their Finance Bill, simply because they cannot stand the prospect of a Government being elected and keeping their promises.
We have a clear mandate to act quickly to deal with the problems that the previous Government left us. We have a responsibility to give new hope and opportunity to young people, and to tackle Britain's economic problems for the sake of long-term prosperity. Conservative Members, when in government, delayed taking action to help the unemployed for too long. We have no intention of allowing them to delay us now, when they are in opposition.
We have provided adequate time in the motion for debate on the Finance Bill. We have made every effort to come to an agreement with the Opposition, but they have refused. They do not know what they want; they simply want to destroy the Bill.
I commend the motion to the House.
3.57 pm
Mrs. Gillian Shephard: I have listened with care to what passed for arguments advanced by the Financial Secretary to the Treasury in support of the guillotine on the Finance Bill.
We of course agree that the Government of the day must be able to enact their legislation, just as the Opposition of the day must be able to oppose. May I dispel at once the ludicrous assertion that it was not possible for the Government to reach an agreement with the Opposition on the allocation of time? Discussions through the usual channels resulted, helpfully, in changes to the size of the Committee, and agreement on which clauses should be debated on the Floor of the House and in Standing
30
Committee. That was correct and right. There was no discussion, however, on the allocation of time—merely a decision on the part of the Government that there should be a guillotine.
The House knows that an allocation of time order is, according to "Erskine May", the most
"extreme limit to which procedure goes in affirming the rights of the majority at the expense of the minorities of the House".
The House will also know from "Erskine May" that such an order is not usually moved
"until the rate of progress in committee has provided argument for its necessity."
Yet twice in the past seven weeks—twice in the short life of the Government—who are so given to preaching and hectoring the nation about the importance of consultation, consensus and partnership, they have found it necessary to move such an order. In this case, they announced their intention to do so before the Second Reading had even begun. But of course, this Government and these Ministers have already earned an unenviable reputation in the few short weeks since the election for a high-handed disdain towards the House and the parliamentary process.
Mrs. Gwyneth Dunwoody: I am highly delighted to hear the right hon. Lady quoting "Erskine May". As someone who seriously objects to the use of guillotines, I think that it is helpful when both Front-Bench teams are conscious of the needs of Back Benchers. If she seriously objects to guillotines and if the view that she is expressing is that of her colleagues, why did they move so many guillotine motions themselves?
Mrs. Shephard: We moved only two guillotine motions on the Finance Bill, which should reassure the hon. Lady—and there was an important difference when we used them. Mention has been made of the length of time between the Finance Bill's publication and the end of the Committee stage, during which financial institutions can make their representations. This Government have allowed 12 working days for that process; under successive Conservative Governments an average of 77 working days was allowed.
But, of course, the Government have a high-handed disdain for the House and the parliamentary process. Let us consider their record. They have limited Prime Minister's questions to one session a week. After last week's mauling from my right hon. Friend the Leader of the Opposition, the Prime Minister may well be wishing that he had abolished Prime Minister's questions altogether—no doubt, that is to come.
The Chancellor of the Exchequer announced to the outside world changes to the powers of the Bank of England without bothering to announce them to the House. More regrettably, he, or one of his colleagues, allegedly briefed the press on the contents of the Budget before announcing them to the House. The Leader of the House either cynically or incompetently arranged for the debate on the motion to take place at the same time as the Select Committee on Modernisation of the House of Commons is scheduled to meet. I am relieved to see that the right hon. Lady is in her place.

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One would have thought that the Government attached sufficient importance to their Finance Bill not to wish to curtail its consideration. The Chancellor described his Budget as
"a people's Budget for Britain's future."—[Official Report, 2 July 1997; Vol. 297, c. 316.]
That is surely a portentous enough description for everyone. Curiously, when questioned on her proposal to limit debate on this epoch-making expression of new Labour in practice, the Leader of the House seemed to take a different view in business questions last week. She seemed to think that the importance of a Bill depended on its length. Curiously, that view was repeated today by the Financial Secretary. I suppose that, in their view, the Finance Bill is not really important or significant—it has just 50 or so clauses, so they might as well guillotine it. Have the right hon. and hon. Ladies no concept of the importance of the complexity of legislation? If not, it is worrying indeed that the Leader of the House is seeking to modernise the procedures of the House in order to improve scrutiny.
It can have been only with extreme reluctance that the Government decided that they needed to impose a guillotine. We know what they think about the use of guillotines. When in opposition, the present Home Secretary said:
"The timetable motion is an abuse of power. No one can deny the wish of a Government to secure progress for their business, but that must be balanced against the need for adequate debate and discussion of a measure … Guillotines can be justified only where an Opposition have filibustered a Bill, where they have refused all reasonable suggestions to agree a timetable, or where there is no possibility of the Government getting their business through with reasonable speed without a guillotine."—[Official Report, 1 February 1988; Vol. 126, c. 757.]
In the case of this Bill, there has been no filibustering and no refusal to agree a timetable, so why impose a guillotine? Clearly, one reason is the Government's incompetence. In just eight short weeks, they have demonstrated that management of the work of the House is beyond their ability. Given their contempt for the parliamentary process and their desire to make announcements, put on stunts, produce soundbites and organise photo opportunities—all outside the House—that is hardly surprising.
What is—or at least should be—surprising is that what the Government say about the importance of consensus, consultation and partnership is contradicted by what they do in practice. Consider what the Leader of the House said about the legislative process in her memorandum on the modernisation of the House:
"The quality of legislation can often be improved by consultation with informed opinion on both the substance and the drafting of legislative proposals."
We learned last week that, because it is short, the right hon. Lady thinks that the Bill is not that important; but even she should be able to perceive that its measures are complex. Even she, given the clearly expressed views in her own memorandum, should be able to see that it is precisely measures such as these that would benefit from the kind of consultation with informed opinion that she herself describes.
Perhaps I can make the right hon. and hon. Ladies understand, although that is sometimes a little difficult to do. Yes, the Government did agree to extend time for
32
debate in the House and, yes, the Committee stage will extend over a number of days, but in this instance the point is that the Government's guillotine motion will give only 12 working days between the publication of the draft Bill—and that agreed only as a result of our representations—and the end of the Committee stage.
It is precisely that period, when the Bill has been published, that the financial institutions, the business community and other interests use to make their valuable input into the legislation and all in the interests of better law. That is the point.
It is indeed ironic that it is today that the Chancellor of the Duchy of Lancaster announced—to a press conference, I expect; certainly not to the House—the setting up at taxpayers' expense of vast focus groups to scrutinise Government legislation and give reaction to Government policy. I thought that that was what Parliament was for. For business and financial institutions, the Committee stage of the Finance Bill certainly performs that function.
In oral questions on 3 July, the House was treated to a patronising lecturette from the President of the Board of Trade on the importance she attaches—now—to partnership with business. We learned:
"Competitiveness must be improved by a partnership between government and business."—[Official Report, 3 July 1997; Vol. 297, c. 413.]
Quite so. Some of us on the Conservative Benches have been saying that for some time. All conversions are welcome, but I wonder how that particular change of view can be served by the Government's deliberate curtailment of business input into the Budget. What kind of partnership is that?
There is no problem among Conservative Members about the Government's stated desire to improve the quality of legislation and the openness and accountability of the workings of government. Where we do have a problem—and so, increasingly, do the public—lies in the fact that what the right hon. and hon. Ladies and their Government say bears no relation to what they do.
A more striking example of that than today's motion would be hard to find. Unlike the Ministers—and despite the fact that it is short—we do consider the proposals of the Finance Bill to be important. They propose 17 tax rises. They propose an attack on savings and pensions. They propose an attack—as yet unadmitted and uncosted, but nevertheless an attack—on local government spending. Worst of all, they threaten the flourishing economic inheritance handed to the Government by the previous Government—just ask any mortgage payer.
The Government have a large majority. Clearly they can force through any measure they wish, they can decide to curtail consultation time with companies and organisations outside this House, and they can hide behind their mandate. However, a responsible Government would not allow that to happen—they would recognise that the very size of their majority imposes a responsibility to ensure that all views are heard. They might even consider practising what they so piously preach, and Ministers might even begin to answer questions with a few facts, instead of using a variation on the theme, "We won the election—so what?" That was breathtakingly illustrated, yet again, by the Financial Secretary today.
There is no need for a guillotine motion. The Government have not tried to discuss an alternative way to proceed, and they thereby give the lie to their vaunted

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claim of being a Government of partnership and consensus. They will and should be judged, not by what they say, but by what they do. We oppose the motion.
4.9 pm
Mr. Andrew Stunell: The Liberal Democrats oppose the motion. We do so for two broad reasons—the nature of the Budget and the Finance Bill, and the process of setting the timetable in the motion.
Our opposition to the timetable motion on the Finance Bill is based not simply on a view of whether the Budget is good or bad, although we have clear views about that. We believe that there are some mistaken proposals in it—the windfall tax, heavily headlined and hyped, and the pension tax, which has stealthily crept into the Bill without a great deal of previous advertisement. We believe that some proposals are missing from the Budget and the Finance Bill—proper funding for education being the most obvious example. The Liberal Democrats will argue those points in detail on the Floor of the House and in Committee.
However, our vote against the motion is based, not on the merits of the Budget, but on its size and complexity. Originally, the Government made out a case—which seems not to have been sustained this afternoon—that this was a mini-Budget, a comparatively insignificant Budget, which would harm no one and which could pass through the House without difficulty or trouble.
In our view, it is not a mini-Budget, but a major Budget. It is not a minor piece of legislation even if it is, as Finance Bills go, a comparatively short piece of legislation. It is not simply a case of tidying up the law and improving the legislative background of taxation; we are considering a major Bill, containing significant proposals that go well beyond those in the Labour manifesto.
I do not believe that Liberal Democrat Members would suggest that the mere fact that a measure appeared in the Liberal Democrat—or, for that matter, Labour—manifesto justified its bypassing effective scrutiny. However, there is at least a case for saying, of measures that were heralded in the manifesto, that there has been an opportunity for public debate, for consultation and for outside interests to gather their arguments and make representations beforehand.
However, the Bill also contains new proposals of great significance, regarding which there has been no such opportunity. The thoughtful and professional inputs that are vital if we are to pass legislation have not been forthcoming for those proposals, and there will not be time for outside bodies to make such inputs effectively.
In the Select Committee on Modernisation of the House of Commons, we have devoted a good deal of attention to ways in which we can improve the law-making process and ensure that law is well drafted, error-free and capable of implementation. I noticed that, when the Minister introduced the motion, she repeatedly mentioned the need for certainty. Well, we shall have certainty. We can have the certainty that legislation will not be well drafted, will not be error-free and will not be capable of implementation without subsequent revision.
I am sure that many Labour Members will recognise that point. The biggest amender of Government legislation in the previous Parliament was the Government. Time
34
after time, they had to return to the House simply because they did not get it right the first time. To Labour Members who say, "We were guillotined often enough, so it is their turn now," I say from the security of the Liberal Democrat Benches that two wrongs do not make a right.
Our second broad reason for opposing the motion is to challenge the process that we are being asked to use this afternoon. Within the next fortnight, the Select Committee on Modernisation of the House of Commons, of which I am a member, will produce a report containing all-party proposals on how this issue can be dealt with during this Parliament. The report could be a landmark in improving procedures of the House and the quality and effectiveness of decisions.
It is at best clumsy and insensitive to bring a proposal of this sort before the House; at worst, it is cynical and disruptive, as it risks damaging the all-party consensus on progress. Ironically, as the shadow Leader of the House said, one of the events that may be delayed by this afternoon's debate is the next meeting, later this evening, of the Select Committee on modernisation of procedures. It brings into question just how committed the Government are to seeing genuine improvements in the House's effectiveness in dealing with legislation.
The Government should have forsworn the timetabling of legislation until the Select Committee's report was before the House, so that those newly agreed procedures could be brought into effect where needed. It is sad that on this occasion new Labour has not meant new procedures.
The Liberal Democrats will oppose the motion because the Finance Bill is too big, too complex and too under-rehearsed to be pushed through the House in this way. Moreover, the timetabling of any legislation should take advantage of the Select Committee's immediately forthcoming report, which will give us an all-party basis for tackling those issues in the future.
4.16 pm
Mr. Peter Brooke: There have already been two eloquent speeches from the Opposition Benches on this matter; mine will not have the same characteristic, but some things badly need saying.
On the history of the matter, the Leader of the House, who is not in the Chamber, announced at business questions on 3 July that the six-day delay between publication of the Finance Bill and Second Reading would be consistent with precedent and that the gap would be the same as it was in 1983–84 and 1987–88. She said that the Bill would be published in draft, to ensure that there was a six-day delay on this occasion also. I am sorry that the Leader of the House is not here. I expected that she would be, so I did not warn her that I would allude to her speech. I would not remotely accuse her of suppressio veri, but there is a touch of suggestio falsi about her answer.
In 1983 and 1987, exactly the same party as had called the election was returned to office. The Finance Bill had been taken before the election; the parts that the then Opposition were prepared to accept had been taken beforehand. In June and July of those two years, we took after the election the two parts of the Finance Bill that the then Opposition had not been prepared to give us before the election. We thus returned to Parliament with the wording of the Finance Bill entirely familiar to the whole

35
House, because we had been debating it before the election. To treat those examples of six-day gaps as satisfactory precedents for a six-day gap on this occasion seems mildly improper.
I have given the respective dates. It so happens that in 1987, there were only five days between publication of the Finance Bill and Second Reading. I acknowledge that as a fair point, just to show that I am prepared to play by the rules.
I was not a Treasury Minister in 1983 but I was in 1987, and I recall extremely vividly the remaining stages of that year's Finance Bill, which were taken in their entirety by the present Prime Minister from the Opposition Benches. With the exception of one speech by the hon. Member for Great Grimsby (Mr. Mitchell) in the early part of the Bill's remaining stages, the present Prime Minister took the whole of the Committee stage alone. It was a remarkable tour de force. However, one could argue that the measure that we debated in the summer of 1987 was not as complicated or as controversial—in so far as the present Prime Minister felt able to carry the entire Opposition case by himself, clause after clause—as the one that we are considering today.
During business questions on 10 July—a week after the original announcement by the Leader of the House about the gap between publication and Second Reading—I said that, until we saw the detail of the Government's guillotine motion, we were dealing with shadows. I pointed out also that, judging by the Leader of the House's general outline of the timing for the rest of the Bill, we would probably see a profound acceleration in lapsed time. That would necessitate the Finance Bill Committee's sitting, not on alternate days—as it has done historically—but day after day. That would create complications in terms of tabling amendments and for those hon. Members who were conducting the opposition to the Bill. They would have to attend throughout all Committee meetings, and therefore could not consult simultaneously.
The Leader of the House did not respond to my points—although she reiterated how much notice had been given between publication of the draft Bill and Second Reading. I am not complaining about the Government's treating the Opposition with arrogance—that is their business. Perhaps they will pay a price for it in the fulness of time: the laws of hubris and nemesis have not been prorogued simply because there is a new Labour Government. However, like several commentators over the weekend, I am concerned for the taxpayers: these are complex issues.
The Financial Secretary sought to justify the accelerated timetable by claiming that, as all the measures were in the manifesto, it was necessary to translate them into law at the earliest opportunity. I have said before in another context that, in 120 hours spent canvassing on the streets of my constituency, not a single person mentioned a new strategic authority for Greater London. No doubt the Financial Secretary will claim that, because the proposal is in the manifesto, the nation voted for it specifically, directly and consciously.
I shall not labour the point—it is often argued that, if proposals are in the party manifesto, they are part of the programme. However, the advance corporation tax
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proposal was not in the manifesto and nor, to the best of my knowledge—the Paymaster General may correct me on this point—were foreign income dividends. Therefore, we must deal with matters that we first sighted when the Budget was introduced a short time ago. My hon. and learned Friend the Member for Harborough (Mr. Garnier) asked the Financial Secretary a specific question, which she has not answered. Therefore, I shall return to that subject before I sit down.
Taxpayers and their advisers frequently complained about complex legislation, such as the Finance Bill, when the Conservative party was in government. They were unhappy about the complexity of such legislation. I think that the Government will test the patience and the good will of those taxpayers and advisers if they adopt an accelerated programme for measures of this sort.
I shall give an example from the previous Government's Finance Bill of an appropriate legislative timetable. Those on the Government Front Bench will remember the proposition in clause 37 of the previous Finance Bill, regarding value added tax on property. In the early part of December, I was alerted to the fact that, although people understood the Government's intentions, the clause, as drafted, would be extremely cruel to those who were obeying the law and would not exact any penalty on those who were not. In the interests of natural justice, there was a case for redressing the balance.
I remember writing to major property companies about the problem before Christmas last year, and I embarked on consultation with them in January this year. The British Property Federation and I discussed the matter with the then Exchequer Secretary, Mr. Oppenheim. He assured us that the Government recognised the force of our arguments, but conceded that it was a complex matter, which would be extremely difficult to put right.
I had a further meeting with the Exchequer Secretary on 5 February—almost two months after the Budget itself—when he spoke words to this effect, "There is no way in which we can unravel this in time for Committee, but we are working on it. Customs and Excise is working with the advisers to the British Property Federation. If a satisfactory solution can be adopted, we shall adopt it, but we do not at the moment have such a solution. We are testing such solutions to destruction."
I was quite clear that the Government were not going to produce a solution in Committee. They did not even produce a solution on Report. They eventually produced an agreed solution, which was accepted in the House of Lords on 19 March—three months after the first correspondence that I had received from my constituents. Everybody agreed that the outcome was wholly satisfactory: that by patient unravelling work, we had come up with a solution that achieved what the Government wanted to achieve and which was not opposed by the then Opposition, who agreed that it was important that we should carry the proposal through. However, it took three months to find a form of words that everybody was satisfied would achieve the Government's objective without punishing innocent people. One could not accelerate that three-month period, but Ministers on the Treasury Bench are seeking to impose this Bill on us in a very short time.
After the election, there were rumours that the Budget would be announced on 10 June. For whatever reason, the Government were not able to have the Budget on that

37
date. That is their business, not mine or that of the House. If they had announced their Budget on 10 June, we would not have had the problem that we have today, because there would have been plenty of time. Therefore, the Government deserve some criticism for potential mismanagement of the timetable.
The Government's new timing for a Budget on 2 July was bound to create problems for everybody involved. I am talking not about the convenience of Members of Parliament—even Opposition Members of Parliament—but about taxpayers and their advisers. The Government are determined to get the Finance Bill through by the summer recess, and the Budget contains a new measure of which there had be no forewarning in the manifesto.
The Chief Secretary said on Second Reading that the previous Government had imposed 82 guillotines on 61 Bills. That is a perfectly reasonable statistic, but I notice that he did not identify how many had been imposed between the election victory in May 1979 and the House rising for the summer recess in July of that year, which is the best parallel case. I whipped one Bill in that period. We got it through in a perfectly amicable way. I remember whipping two more in 1979 and 1980, one of which was considered in Committee for 105 hours; the other was considered for 120 hours. There are problems of style in the way in which the Government are allocating time on a matter as complex as the one that we are addressing today.
The Financial Secretary, when replying during the Budget debate on 3 July, omitted to answer any of the reasonable, relevant and logical questions put to her by my hon. Friend the Member for Daventry (Mr. Boswell). When my hon. Friend said that he sensed that the Financial Secretary was about to sit down, she said that she was not, but that she would come to his points. She said that the Government were very much in favour of debate on the Committee stage of the Finance Bill.
I am bound to say that, so far, on the basis of the Financial Secretary's reply to my hon. and learned Friend the Member for Harborough, the omens are not very encouraging. If we are going to deal with complex issues and the Financial Secretary is not prepared to answer questions, problems lie ahead.
I recognise the Financial Secretary's reference to the manifesto. There will, of course, be arguments about the Government's conduct of facets of the Bill, but the ones that particularly preoccupy the outside world are ACT and foreign income dividends. The Paymaster General may soon tell us what particular change of heart the Government have had on foreign income dividends. In trying to take through a Bill of this complexity in the brief time that they have allowed for it, the Government are demeaning themselves—sadly, they involve the rest of us in it as well—and Parliament in the eyes of the public.
4.29 pm
Mr. Dennis Skinner: I have a little booklet with me which refers to the use of the guillotine since 1945. I have listened to many debates on guillotine motions in the past 27 years, and it is interesting to note that between 1945 and 1970–71, the year when I was first elected to this place, only about 20 guillotines were implemented.
When the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) was Prime Minister, he introduced a guillotine on the Bill that became the Industrial
38
Relations Act 1971. The guillotine was introduced almost immediately after the Bill's inception, and we were outraged. About 40 of us stood in front of the Mace, although I do not know what effect that had. Our protest was not seen on television because the House was not then televised, and it was not even broadcast on "Yesterday in Parliament" because the programme did not exist.
Why were we so outraged by the use of the guillotine? The answer is that it was not the thing to do. The then Tory Government had a majority of about 40 and I do not think that any Conservative Members were likely to rebel. Most of us thought that the introduction of a guillotine should not happen. That attitude was par for the course in those days: "If there is a guillotine, oppose it." We had not been used to them.
The Industrial Relations Bill became an Act—in other words, the guillotine worked—but then finished up on the back boiler because four dockers would not observe its edicts: the Official Solicitor had to go to Pentonville to bail them out and purge their contempt. What a great Act of Parliament that was; I thought, "Well done—there's your guillotine for you." I felt fortified by the outcome. We voted against the guillotine motion and a discredited Act was then got rid of by the Prime Minister who introduced it. I thought that that justified the rejection of guillotines.
The Industrial Relations Bill was followed by the Housing Finance Bill, also in 1971. I was a member of the Committee that considered that Bill for about six months. There was a stage when we never left the Committee Room for five successive days. Tony Crosland was that confused one night that he went home in his carpet slippers. We used to meet night after night. After a long time in Committee, that measure was guillotined. Again we were outraged and voted accordingly. I think that it is fair to say that from then on guillotines were used much more frequently than ever before. The booklet to which I have referred makes that pretty clear.
We may as well admit that over the past 10 years or so the use of the guillotine was so widespread that the previous Tory Government came to use it for almost anything, and I must say that my outrage has diminished: I realise that almost everyone is walking down a different set of rails—rails which are clear to anyone who wants to see them. The Government people vote for a guillotine and the Opposition vote agin it. With the rare exception of the hon. Member for Aldridge-Brownhills (Mr. Shepherd)—I think that he has been in the Lobby with me on odd occasions, but I do not think there has been anyone else from his party—the outcome can more or less be forecast.
The much-vaunted guillotine, which it is said has undermined this wonderful Mother of Parliaments and all the rest of it over the past 10 to 15 years, has done nothing of the kind. I have to admit that, because I have watched and taken part in all those debates and votes. Frankly, if the Prime Minister had given me the job of Leader of the House and I had been in charge of proceedings, I would not have introduced this guillotine motion—not as a matter of principle, because I do not think that the principle is as evident as it used to be, but for the simple reason that we are already in July and we all know that Tory Members will not want to be sitting in Parliament in August. I would have said, "We'll drive them into August, and we'll finish in time."

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I would not have bothered with the guillotine. The chances are that the Tories would not have gone anywhere near 12 August when the grouse shooting season starts. They would not have dared—not after the big rally they had last week in Hyde park attended by the Leader of the Opposition. He is on a zero-hour contract. All Tories believe in zero-hour contracts, but they are taking it a bit too far when they give the Leader of the Opposition one—I think it is called "Waiting for Portillo". Given the Tories' problems, I would have carried on. I am not making a song and dance about it, but that would have been my instinct. The Tories are in a right old mess and there are only 164 of them. The Liberal Democrats will join them in the Lobby—they will never be in government and will never have to wield a guillotine, so we know what they will do—but they will want to trot off on their holidays, too.
When I was in the Table Office last week, I heard Tory Members inquiring about the summer recess; they had already asked the bobbies, because the bobbies get to know first, but they were still not sure. The Tories were in the Chamber on Thursday afternoon when the recess was announced, and now they are shouting and bawling about the guillotine when we all know that they have booked their holidays for August. It has become a bit of a farce.
Mr. Brooke: Does the hon. Gentleman accept that I was not one of the people in the Table Office when he had those various conversations? If he wishes to sit throughout the whole of August, I will be very happy to sit with him.
Mr. Skinner: I have news for the right hon. Gentleman: I shall be here. I have no problem with that: I have to come in every day to establish my working-class credentials. One can easily become middle class, so clocking on the way I used to do is important. I would be happy to come in, but the right hon. Gentleman and I would not do a great deal: he would be singing Clementine and all his colleagues would have gone to their new outpost in Sardinia, where the ex-Prime Minister went.
The document I have with me tells it all. What is more, something significant happened in the previous Parliament: we had the Jopling recommendations. For the benefit of new Members, I will explain what that meant. It meant that opposition would never again be like it used to be. Various changes that had nothing to do with guillotines reduced the Opposition's power to undermine the Government. I will not go into all of them now, but we used to be able to keep the Government up all night during discussions on the Consolidated Fund Bill. European Community orders went into Committee, and many other orders that we used to debate on the Floor of the House went into Committee unless we took special measures to prevent it.
At that time, the Tories were in power and had 329 Members. They were so arrogant that they believed that they would be in power for ever. With my old friend Bob Cryer, who died, I used to warn Tory Members that they would rue the day they passed the Jopling recommendations because it would give the green light to
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any in-coming Labour Government to guillotine almost everything and never mind "Erskine May". We warned the Tories, but although a few went into the Lobby with us late one night the number voting against the recommendations was miserly—only 40 or 50 hon. Members altogether. That is significant. I am not accusing those who are now Government Front Benchers of hypocrisy: they, too, went into the Lobby to vote in favour of the Jopling recommendations. Why was that? It was because they thought that they were going to win the election and they had an idea that they would be using the recommendations themselves.
Hon. Members can have their boring old debate if they like, and it will get even more boring as they go on. I can stand on principle for as long as I choose, but having listened to this debate about the guillotine for 27 years I observe that it ain't what it used to be. One thing that I cannot stand is hearing Tory Members who went racing through the Lobbies to cut debates short in the last Parliament now shouting and bawling and crying about a guillotine that even I believe allows the passage of many measures for which the people voted.
I admit that some measures in the Budget surprised me, but most of them were well canvassed. I talked about most of them on the street corners of every village in my constituency during the general election campaign. I do not feel put out about those proposals; that is not my objection to the guillotine. If I thought that the cause was so great, I would feel bound to follow my voice with my vote, but the Budget—which, as I say, was well canvassed—is not of that dimension. It is not like the Industrial Relations Act 1971, which went to the core of my being.
As is traditional, the Tories will carry the Liberal Democrats and the other ragtag and bobtail into the Lobby with them today. They will then send their constituents a newsletter—if they get around to it—saying how they stood up to the Government, but it does not add up to a row of beans.
Mr. Viggers: The hon. Gentleman, as always, is true to himself. I have heard him talk on this subject before, and he has said the same on those occasions. But did he ever in his wildest dreams imagine that he would be sitting on the Government side of the House with so many silent, supine supporters behind him?
Mr. Skinner: I will tell the hon. Gentleman what I said before the election. The last Prime Minister would not listen when I said, "Next time you will be sitting in my seat—I am keeping it warm for you." As the hon. Gentleman has provoked me, I will add that I did not expect there to be 418 Labour Members of Parliament.
I acknowledge that some of those Labour Members are brand new. As naturally as night follows day, they must look to see what the leadership is doing. I have not yet drawn any of them into my corral. I have worked out that only about 100 will be given jobs when the Prime Minister carries out his periodic reshuffle, so it is conceivable that some of them will decide that they are not about to get on to the Front Bench and will start stretching their limbs. I cannot be sure about that, but one thing is certain: I know what those hon. Members will do tonight. They will vote for the motion because they want to get the Bill on to the statute book.

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The Tories, meanwhile, will have to go through the ritual: one of them will do so on principle, while the rest will do so as a matter of course. The hon. Member for South Staffordshire (Sir P. Cormack) was recently promoted to the Front Bench. He never had a chance under Thatcher—she would not give him anything—but now, after 27 years in Parliament, he has made it at last: he has become the deputy to the deputy to the deputy shadow spokesman, but he knows as well as I do that the same ritual has taken place throughout the last few Parliaments. Hon. Members must do what they have to do, but they must not expect me to believe that they are engaged in some great principled fight.
4.45 pm
Mr. Richard Shepherd: I am sorry that 28 years of grousing by the hon. Member for Bolsover (Mr. Skinner)—not just before 12 August—has undermined his confidence in some of the principles that he has espoused so freely both to and on behalf of his constituents.
I oppose the guillotine. This is no playing to the gallery; the hon. Member for Bolsover was honestly opposed to guillotines, and I oppose them as a matter of principle. First, they are a denial of freedom of speech; secondly, they are a denial of the representative function; thirdly, they are the supreme instance of the Government's control over the House of Commons. That is why many people have often reflected that guillotines undermine the esteem in which the House is held, and that each of us as a representative is less able to express honestly his or her views about legislation.
I congratulate the Treasury Front Bench. I cannot recall ever before seeing the entire team in the Chamber during a debate on a guillotine motion. It is important that they should all attend, as this is a serious step for the House of Commons.
Several aspects of the guillotine worry me. First, all the instances given by the Financial Secretary to the Treasury, the hon. Member for Bristol, South (Dawn Primarolo), were very poor. The hon. Member for Bolsover and I cried foul to the former Government over such instances for many years, and I therefore would not pray them in aid. There must be merit in the debate itself, but the Financial Secretary was unable to adduce any dignified and honourable arguments to support her contention.
I have a greater worry, however. Many thinking Members of Parliament were elected on 1 May, and in fulfilling their representative function they will have to reflect the views both of their constituents and of their local authorities. My hon. and learned Friend the Member for Harborough (Mr. Garnier) asked where the change in the tax position of pension funds appeared in the Labour party manifesto, but no answer was given. I understand the difficulty of giving an answer, but to predicate an argument on such a flimsy basis as that used by the Financial Secretary does not assist in any way.
I have said that I oppose guillotines. Looking at what happened over the course of the past five general elections, I noted that in 1979 it took the then Conservative Government all of six months to impose a guillotine on the Bill that became the Education Act 1980. The guillotine was imposed while the Bill was in Standing Committee. After the 1983 election, it took the then Conservative Government no more than five months to
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impose a guillotine on the second telecommunications privatisation Bill, which became the Telecommunications Act 1984, also as a consequence of debate in Standing Committee. In 1987, it took the then Government eight months to impose a guillotine on the Bill that became the Education Reform Act 1988—again as a consequence of debate in Standing Committee. In 1992, it took the Government seven months to guillotine the Cardiff Bay Barrage Bill on Report. I mention that because the Financial Secretary seemed to think that there was some distinction between types of Bill.
Less than three weeks after the Queen's Speech the new Labour Government moved to impose a guillotine on the referendums Bill for Scotland and Wales. No one disputes that that is a major constitutional issue that will have repercussions—we cannot yet weigh up what they will be because we have not seen the substance of the legislation—but the course on which the Government have embarked is sensitive and tendentious; it requires great consideration and deliberation by the House, and every hon. Member is entitled to contribute to that debate.
Within eight weeks of being elected, the Government are now imposing a guillotine on the Finance Bill. The historic reason for the House coming into being was to express consent and acquiescence. Hon. Members who have been in previous Parliaments will know that I have always said that the House's principal function is to attest to the consent or acquiescence of those who have sent us here to represent them. After all, we are making laws with penalties for those who fail to uphold them. Our fellow citizens could be sent to prison as a consequence of their failure to attend to the laws that we pass. That means that there is a solemn duty upon us. Can we honestly attest that our laws will be borne? That is the prime reason for hon. Members having a purchase on our debates. However humble or new we are, it is important for us to be able to contribute to debates.
I did not see the pensions issue coming and I could not weigh it up appropriately on Budget day. As we reflect on these matters and as others with more expert understanding of the complexity of the detail examine them—in such matters the devil is always in the detail—it will be clear that they have will have considerable consequences for my local authority and for individual pension builders among my constituents. This important issue will have ramifications for local authority taxation in the coming years because authorities may have to make up a shortfall. I do not know whether what I am saying about the detail is correct, but I know that we shall find out by the process of legitimate debate in the House. By some majestic divination, the Government have decided that that will require a little over two hours and 32 minutes.
There is a problem with a Government setting out what they think are the priorities in Bills. I have seen that often because there were almost 60 such Bills under Lady Thatcher and my right hon. Friend the Member for Huntingdon (Mr. Major), whose Government started with a heavy drumbeat of guillotines. By 1992, unfortunately, the option of guillotines was taken out of the then Government's hands because their majority was not large enough.
We often do not know where the hidden weight of an argument lies until there is a contribution from the least expected quarter of the House. Guillotine motions are designed to prevent that. The House should reflect on the

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most recent guillotine motion, relating to legislation for Scotland and Wales, and note its careful crafting. It was designed to prevent the House from debating some of the specific issues relating to it. That is not a denial of the Government's mandate in Scotland: it is the outcome of the guillotine which will diminish the validity of the Government's mandate. The Lords have amended the Bill, and so far the Government have not imposed a guillotine on the debate on Lords amendments.
These are important issues, and there is a distinction between the Executive and their supporters in the House. A large number of intelligent hon. Members were unexpectedly elected and many of them cannot reasonably expect to hold their seats if, in the traditional sense, a better equilibrium is restored at a future election. What will have been their contribution to the passage of Bills and to other business if they see their only role as that of saying "Hallelujah" to every measure presented by the Treasury Bench?
On the Treasury Bench there are seasoned right hon. and hon. Members who have felt the indignity that I am expressing because they suffered the 60 guillotines that we imposed and they know how destructive that can be to rational and sensible debate. They also know that that was part of the process which slowly unwound the Conservative Cabinet's hegemony over public sentiment. We looked arrogant in the past—as though there were no lessons to learn and no need to justify any of our arguments—but the contempt that was expressed at that time turned round and bit us and there was a wipeout on 1 May.
Mr. Skinner: Surely the hon. Gentleman is not saying that we shall have reached that point with two guillotines. Does he accept that his view varied on some of the 60 guillotine motions that were accepted, and that although he could not stomach some of them, he accepted many? Although the hon. Gentleman and I would be on similar ground in other circumstances, there are varying ways of contemplating legislation and we have to decide instinctively about the measure that is before us. My consideration of this measure is not the same as that of the hon. Gentleman, but he will agree that occasionally one can accept some motions—as he did from among the 60 that he mentioned—while others are not acceptable.
Mr. Shepherd: By about 1987 I had discerned that guillotines had become an instrument of government and that they were the way in which the Executive, without the foo-fah of proper parliamentary debate, intended to engage with the elected representatives of the British people. Thereafter, I would not support a guillotine or the legislation that depended upon it. This is the first time that I have said that in the House, but hon. Members will find that my voting record bears me out. Such motions are a denial of the very function and purpose of this place.
Governments say, "We have important programmes, the House is busy and we have a mandate." When one takes a lease on a building, whether it is a rented house or work premises, one looks at the detail of the lease to see whether there are clauses within it that are too onerous to bear. Such is the duty of the House. It must attest—and honourable, intelligent Labour Members must be sure—that the matter can and will be borne and will not undermine the standing of the House.
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I understand the frustration that was felt by Labour Front Benchers when they were in opposition, and the same Opposition frustration is evident today. In part response to the hon. Member for Bolsover I say that there is a qualitative difference between the sort of legislation that the Government have decided to embark upon and that which he mentioned. There is no doubt that their first measure is solemn and constitutional because it is about the government of these islands. It is not the ridiculous Dangerous Dogs Bill, about which it was said that all stages had to be taken in one day, thanks to my right hon. Friend Lord Baker.
The motion before us today relates to the Finance Bill, which deals with the taxation of the people of these nations. It deserves proper scrutiny, but there is to be a guillotine before the Bill has even been in Committee. I remind the House of what I have emphasised time and again—that the balance of an argument or the devil in the detail sometimes comes out of the wood and surprises us. To show the extent to which the Executive is seeking to control the House and its Members under some fanciful doctrine of the mandate I will quote from a simple part of the motion. Under the heading "Dilatory Motions" it states:
"No dilatory Motion with respect to, or in the course of proceedings on, the Bill shall be made in the Standing Committee or on an allotted day except by a Minister of the Crown; and the Question on any such Motion shall be put forthwith."
I ask hon. Members to think about that. It is a fairly ordinary clause, but it affirms that this is a matter for the Executive and that hon. Members will take it on the terms presented by the Executive.
If I have stepped widely in the debate, I apologise, but the arguments are profound. Within three weeks of the Government coming into office there was a guillotine motion on a constitutional measure, and within eight weeks a guillotine motion on a Finance Bill. That is inappropriate. It will—I have said this before—slowly trickle out to people that there is an extraordinary presumption and arrogance, which is so familiar to them. Conservative Members should know why we lost the election on 1 May. Labour Members who support the Government motion should remember that the very arguments that were adduced against us slowly build up: the silt fills the bottom of the jar until people realise that arrogance is a feature of Whitehall and of the Executive. It is the function of the House of Commons to represent and stand up for the people who elected us.
5 pm
Mr. Peter Viggers: This is a special occasion. It is the first time in 23 years that I have wanted to speak in a debate on a timetable motion. As a parliamentary private secretary at the Treasury, not as a Minister, I daily heard the truism that what appears initially to be a good Budget frequently turns out to be a bad one, and what appears to be a harsh Budget often turns out to be a very good one. That is not just a truism; it is true.
Another truism is also true: there is no such thing as an entirely favourable Budget measure. The Chancellor cannot please everyone. When he said that, for the greater good of mankind and of the United Kingdom population in particular, he would diminish excise duty on lead-free petrol, he thereby drove out of business a company whose

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special product was the lead additive in petrol. A Chancellor cannot say that a measure is universally good.
The Budget contains some exceptionally complicated measures. They derive mainly from the system of corporation tax, including advance corporation tax. To great acclamation, the Chancellor said that he would cut the basic rate of corporation tax from 33 per cent. to 31 per cent. That will benefit company tax payers by £1,950 million. In abolishing tax credits by a comparative sleight of hand, however, he raised £5,400 million a year in the longer term, a much larger amount. The implications of that will take some time to sink in.
In an article on international bonds in today's Financial Times, Krishna Guha states:
"'This is going to be a huge supporter for the bond market, and for the very long end in particular,' says Mr. Andrew Roberts, head of bond strategy at UBS. But it is too early to say how or when it will affect the market. 'If anyone tells you they know, they are lying,' he says.
Many companies will have to increase pension contributions to make up for the cost to their pension funds. Valued on the basis of the present value of their future income, pension funds have in effect suffered a revaluation loss of 15 to 20 per cent.
'Mature funds will suffer more than small ones,' says Mr. Alan Clifton, managing director of Commercial Union Investment Managers. 'Pension funds such as British Steel or ICI will be the main sufferers.'"
I cannot imagine that it is directly relevant, but I should say that I am the chairman of the trustees of the Corporation of Lloyd's pension fund, which in this category would rate as a small pension fund. I am not a beneficiary in any way; I am merely the chairman.
The implications of the Budget changes were foreseen. The Financial Times Lex column on 12 May said that it expected the Chancellor to turn to fundraising:
"If Britain's new chancellor can reinvent monetary policy-making in just a few days, what havoc might his promised review of corporate taxes wreak? The most obvious potential victim is about as difficult to spot as an elephant in the chancellor's bedroom: Britain's much-loved advance corporation tax (ACT) credit on dividends. Not only does this cost the exchequer some £5bn a year. It also gives pension funds a distorted incentive to prefer dividends over reinvested earnings. So its life expectancy does not look great. But remember: the chancellor promises a review 'to promote greater long-term investment'. Simply cutting the ACT credit would do no such thing. On the contrary, companies would end up shouldering most of the burden and the cost of capital would rise."
It will take time for the Budget's implications to sink in. The Financial Times, The Economist and other expert commentators have expressed their views. Professional bodies and trade associations will inform their members. My hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) referred to the Budget's effect on local government pension funds. It has taken some time for local government pension funds, for advisers to the funds and for local councillors to realise that it may be necessary to raise council tax to pay the contribution required by the Government. It will take a long time for individual business men and women and pensioners to make their views known.
So far, I have received no representations about the Budget, but I am certain that I will. When I receive representations from my constituents, I am sure that they will say, "I had no idea that the Budget was going to affect my pension fund to the extent that it has. I was expecting the pension fund to be enhanced by future
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benefits." Someone might write to me and say, "I am a trustee of a small pension fund. I did not realise that we would have to increase contributions by taking money from the shareholders' funds or by taking money from employees."
People have not realised the extent to which the proposals will affect them. During his Budget speech, the Chancellor said lightly that many pension funds were in surplus. It is true that about half the pension funds with the National Association of Pension Funds Ltd. are in surplus, but those that are not will need contributions from employees or from company funds. People with personal pension funds have planned to retire at a certain level of income. They will now have to suffer a lower pension or make higher contributions to their pension fund than they had expected.
When people realise the extent to which they have been disadvantaged, they will be resentful and will think less of the Labour Government, of the Chancellor and, I am afraid, of Parliament because they will notice that we allowed the proposal to be passed without adequate scrutiny.
I do not regret the lack of debating time on the Floor of the House or in Committee. My complaint is that the entire process, from the Budget through to Third Reading, will be so compressed that experts outside will not have an opportunity to express their views, and ordinary constituents, voters, business people and pensioners will not have a chance to assess the effect that this damaging and tax-raising Budget will have on them.
The Financial Secretary to the Treasury made much of the need for certainty as against uncertainty. The Paymaster General is on the Front Bench. I hope that he will reply to the debate so that he might clarify one point. He said:
"We are also looking sympathetically at the position of UK-based groups with a substantial amount of foreign income."—[Official Report, 4 July 1997; Vol. 297, c. 586.]
I have raised this point twice before on the Floor of the House, but the Paymaster General was not replying then. As he will reply today, I hope that he will clarify what he meant by those remarks. Is it that a Budget measure is likely to be changed? If so, we should be told earlier rather than later. We do not want to be told during the summer recess when Parliament is not sitting.
The guillotine is symptomatic of the Government's attitude to their own party and to Parliament. No Labour Member, other than the hon. Member for Bolsover (Mr. Skinner), has sought to speak in this debate. It is clear that the Government are interested in using their massive majority more to push through legislation than to scrutinise it. It is the same choreographed response as we see during Prime Minister's questions, when someone is selected—we know not how or why—to emerge from the chorus line and have a speaking part. It is a contempt of Parliament.
Despite all that, I am quite cheerful at the moment. Nothing can eradicate the past 18 years of good government and good measures. It appears that the new Government will leave the main framework of the Conservative improvements in place. It gives me pleasure to see the Government losing the plot at such an early stage.

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The Times published a letter today from Mr. Brian Lynch, who said:
"Sir, Picket lines again, inflation up, interest rates up, more troops in Ulster, Ken Livingstone back in the limelight. Didn't take long, did it?"
5.11 pm
Mr. Richard Page: This debate may go down in history as the one in which the hon. Member for Bolsover (Mr. Skinner)—I am sorry that he has left the Chamber—confessed that he was well on the way to becoming an establishment man. No doubt he will be a noisy establishment man. He weaseled his way out of his past objection on principle to guillotines by saying that guillotines were not what they used to be, that they did not matter today and that they are from the past.
In a way, I agree with the hon. Gentleman. I cannot work up a lather, either synthetic or genuine, over a timetable for a parliamentary Bill. It is a perfectly legitimate weapon of Government to impose a timetable for the effective discussion of a Bill. I think that all Bills should be timetabled. That means the sensible division of a Bill so that those parts can be discussed in great detail, but are not held up by filibustering.
The hon. Member for Bolsover was nostalgic when he recalled the filibusters on the Industrial Relations Bill. I, too, can recall a few filibusters. One or two hon. Members regard filibusters in the way that war veterans regard being asked by their children, "What did you do in the war, Daddy?" Members of Parliament say, "I remember the great fluoride debate. I remember being upstairs in the telecommunications Committee for over 100 hours on three separate Committee stages." I, too, remember those occasions. In the middle of those filibusters, my overwhelming ambition was to be at home, tucked up in bed while other people wasted their time.
I have searched my memory, but I cannot think of a single case of filibustering having changed the intended outcome. Therefore, I believe in the sensible timetabling of Bills. Of course, the key word is "sensible". The proposed timetable is not sensible—it is truncated and far too short. I am not saying that the time for debate should be four or five times longer, but there are one or two aspects that need attention. My hon. Friend the Member for Gosport (Mr. Viggers) referred to some of the points that would need to be drawn out.
Why is the procedure truncated? I am glad to note that the Chancellor has arrived in the Chamber. The Government have cocked it up—perhaps that is not a delicate thing to say. Before the Budget, the Prime Minister and the Chancellor were macho men, going around saying, "We have got to hit the ground running." What better way to make their mark than a Budget that shows that they have their hands on the reins of power?
As the Chancellor has probably discovered, he cannot simply wander into the Treasury with a piece of A4 exercise paper bearing the words, "Can you give me a Budget in a week or two?" His original date would have allowed plenty of time for the Bill to complete its Committee stage, but it takes considerably longer than he expected to put through a Budget, especially in view of the need to ensure that anti-avoidance measures are in place.
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I noted that the Chancellor muttered a few words about making anti-avoidance measures illegal. It is an interesting concept that he is trying to introduce into our law, and I welcome the opportunity to watch it develop over the years to come. The Treasury will have to spend month after month ensuring that they deliver and are not circumvented.
I would have liked a little more time to debate the Bill because I support certain of the Budget's proposals, some of which are quite sensible. I take an interest in the small business sector and I have spent most of my time in the House trying to promote it. That sector will grow and provide jobs for the future. It may even employ youngsters who are to go into some form of employment or training.
I agree with the proposal to increase the plant and equipment allowance from 25 per cent. to 50 per cent., but I would have liked a little more time to define what is meant by plant and equipment. We do not want any more splurges, with companies buying typists' chairs and desks at the end of the financial year.
The proposal should focus on machine tools. As a Conservative Back Bencher and as a private individual, I have always argued that there should be a focus on machine tools. We should take a leaf out of the Japanese book. The Chancellor may find it interesting that the Japanese give small firms a machinery and machine tool grant for three years. For example, they target the grant on NCR machines to help small firms acquire the means of production.
I had hoped that the Budget would include a proposal to allow small firms to accumulate a nest egg of capital. It is all very well to reduce corporation tax from 23 to 21 per cent.—every little bit helps—but that is not enough. The person running the business will say to himself, "Do I pay the tax or do I pay it to myself as income?" I would have supported a measure, perhaps in the form of a bond or non-redeemable shares, that would keep the money in the business and give it a chance to grow. We are allowed personal allowances, so why should not companies have allowances? It could be an adjustment to the corporation tax—
Mr. Deputy Speaker (Mr. Michael Lord): Order. I remind the hon. Gentleman that we are discussing the allocation of time, so it is not appropriate to go into the details of the Finance Bill.
Mr. Page: You are absolutely right, Mr. Deputy Speaker, but I am so enthusiastic about the small business sector that I get carried away. In fact, I had finished my sales pitch on behalf of small businesses.
My hon. and learned Friend the Member for Harborough (Mr. Garnier) asked what time would be available to discuss the impact of changes in advance corporation tax on charitable schemes. I declare an interest as I was the honorary treasurer of a large charity. I know what effect such measures can have on charities' incomes. Some charities have already been hit hard by the lottery, and I should have thought that some special allowance could be made in addition to the three years that has been allowed by the Chancellor—
The Chancellor of the Exchequer (Mr. Gordon Brown): It is seven years.
Mr. Page: Yes, seven years; such an allowance would enable charities to retain more of their income. The subject

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will be debated on the second day of the Committee of the whole House, but it should be allowed much more time. The United Kingdom has a tradition of giving and of generosity, and charities should have an opportunity to get their act together so that they can present a case and try to melt the Chancellor's stony heart.
I believe that Bills should be sensibly timetabled during a Parliament. Today's motion, however, is not sensible. It is far too rushed and we should be allowed more time for debate. The Budget's iniquities will not be properly debated under the timetable. My hon. Friend the Member for Gosport made the point that Budgets that are lauded to the heights on Budget day often turn out to be stinkers. The aroma of this Budget will linger in the nostrils of the British people—especially of those who will become pensioners—for years to come.
Mr. Viggers: On a point of order, Mr. Deputy Speaker. I wonder whether you would be prepared to take hon. Members into your confidence. Hon. Members know that those who wish to speak in debates may submit their name to the Speaker's Office and that, if they are lucky, they will be called by the Chair. Will you tell Opposition Members whether you have received any requests from Labour Members to speak? It seems extraordinary that Labour Members have not commented on such an important constitutional measure. Conservative Members have made some good speeches, and we have heard an excellent speech from a Liberal Democrat. I wonder whether something is distracting Labour Members.
Mr. Deputy Speaker: The hon. Gentleman has been here quite a long time; he is well aware that that is not a genuine point of order for the Chair.
5.21 pm
Mr. Edward Garnier: I should, if I may, correct a comment made by my hon. Friend the Member for Gosport (Mr. Viggers). There have been two speeches by Labour Members: one by the Financial Secretary to the Treasury, with which I shall deal shortly; and one by the hon. Member for Bolsover (Mr. Skinner). I agree that there were only two speeches by Labour Members, although it is doubtful whether any speech by the hon. Member for Bolsover can be counted as a speech from the Government Benches. None the less, he made one, and he is a Labour Member.
I learnt only a few things from the speech by the hon. Member for Bolsover, the first of which is that he is getting old. The second thing I learnt is that he has only three speeches in his parliamentary locker—today we heard either speech one, speech two or speech three—all of which we have heard before. The third thing that I learnt about him, which may be of some relief to the Paymaster General, is that—based on his discussion on August holiday arrangements with my right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke)—the hon. Member for Bolsover is deeply out of touch with the modern Conservative party, which, sadly, is no longer necessarily representative of the grouse-shooting classes. It is also quite clear that he will not be asked this summer to the Paymaster General's castle in Tuscany, but may spend a lonely summer holiday in this Palace.
The final thing that I learnt from the speech by the hon. Member for Bolsover is that he does not object to guillotines when he agrees with the underlying legislation.
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When he objects to the underlying legislation, however, there is no more principled advocate of the arguments against imposing a guillotine. I should like to compare his speech with the purity and elegance of the speeches made by my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) and my right hon. Friend the Member for Cities of London and Westminster—which, within a few moments, encapsulated the evil of the motion that we are debating.
The Financial Secretary to the Treasury moved the guillotine measure against the background of a Labour Government who have a huge majority that has allowed them to create a disgusting mixture of arrogance and lack of self-confidence. The lack of self-confidence has been evident in the dearth of speeches by Labour Members supporting the motion. They lack confidence and have not spoken because they do not understand that even bad arguments require support in the Chamber. If they are not prepared to support the Minister who moved the motion, what hope have we for the remainder of this Parliament?
The motion was moved also against a background in which one Labour Member, who is not in the Chamber, was overheard complaining that his sense of democracy was offended by the notion that any Opposition facing a Government majority of 177 should have the right to propose amendments to Government legislation. That is only an anecdote—I am sure that it is not a criticism that I could lay at the door of every Labour Member—but it does rather inform the way in which the new Labour Government exercise their authority over this legislature.
A point that has already been made by my hon. Friend the Member for Aldridge-Brownhills is that this guillotine is not the first one proposed by the Government, although we are only six or eight weeks into this Parliament. He and I spoke for some little while in the debate on the Government's first guillotine, which was on the Referendums (Scotland and Wales) Bill. On that occasion, we heard the same arguments—if they can be so described—from the Government. Both that Bill—which my hon. Friend rightly said was a major constitutional Bill—and the Finance Bill are major Bills. The Finance Bill has an equal if different significance.
The Finance Bill is already suffering from truncation, and the period between its Second Reading and Committee stage will be far shorter than that allowed for any previous Finance Bill. As Conservative Members have said, the time between a Finance Bill's Second Reading and its Committee stage is the very time when the financial services and pensions industry and those who will be affected by the Budget must lobby their Members of Parliament and the Treasury to explain the difficulties that they and the taxpaying public might suffer.
My right hon. Friend the Member for Cities of London and Westminster mentioned some of his constituents who are in the property business and who wrote to him about an aspect of a previous Budget that dealt with property taxation. That was an extremely germane example of the value of a long period of consideration. No one will be allowed such a period of reflection on the Finance Bill. In passing this type of legislation, Ministers owe it to us all to reflect on what they are doing.
I will not say what I think of the speech made by the Financial Secretary. Nevertheless, she said that it was not her or the Government's fault that the Finance Bill and the Budget have been introduced one third or halfway

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through the financial year. No one asked the Government to introduce a Budget at any stage of the year, and no one asked them to delay their Budget from 10 June to 2 July. It is also no good for them to complain to us when we complain that they are so drastically cutting time to debate the Bill.
Another point that has not yet been mentioned but that is worthy of mention is that, in the other place, the same scrutiny does not occur on Finance Bills as occurs on other types of Government legislation. As the hon. Member for Hazel Grove (Mr. Stunell) correctly said, in previous Parliaments, it has been a matter not only of Governments having to amend their own legislation but of the other place amending Government Bills, which it has done most effectively and in a rather more deliberative atmosphere. This Bill will not have such an advantage.
Ministers are fond of using the expression "the people's"—as in the people's money, the people's Government, the people's this and the people's that. The Government have proposed 17 tax rises to take more of the people's money, yet they are not prepared to allow the people's representatives adequately to discuss those proposals.
The few arguments offered by the Financial Secretary, who is temporarily absent, were as follows: first, she said that there was a need for certainty for the taxpayer; secondly, she said that the guillotine motion provided for better scrutiny of the Bill; and, finally, she said that there was adequate time. I think it was Humpty-Dumpty who said, "What I say it means is what it means," although I paraphrase inaccurately. The Financial Secretary was following his words closely when she sought to prove that adequate time had been allocated. The time available is wholly inadequate.
As for providing certainty for the taxpayer, if the Financial Secretary is concerned that old-age pensioners with heating bills to pay this winter need to know before the autumn what they will or will not be getting from the Government, surely it is open to her to sever that issue from the Finance Bill and legislate separately while we consider the other aspects of the Bill with greater care.
The Financial Secretary said that there was adequate time. One has only to read the table set out on page 852 of the Order Paper to see what that means in her view. On the first day, we have until 7 pm to deal with clause 1 which relates to the windfall tax. We all know that, even with the best will in the world, it is not often possible to start Committee stage deliberations on the Floor of the House at exactly 3.30 pm. It is therefore likely that there will be less than the requisite time to discuss the windfall tax. At 7 o'clock, we are to move on to discuss mortgage interest tax relief, dealt with in clause 15. That debate must be finished by 10 pm. There will no doubt be a Division at 7 pm, or shortly afterwards and, in view of the number of Members—659, of whom perhaps 640 will vote—we shall not start debating clause 15 until about 7.30 pm.
The following day, we debate clause 17 which deals with medical insurance, or the removal of tax relief on it, and we follow the same procedure. Also on the second day, we debate clause 19, which deals with pension funds and tax credits, for a little under two and a half hours.
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Those debates cover four big subjects which deserve rather more than two and a half hours each—
Sir Patrick Cormack: That includes Front Benchers' contributions.
Mr. Garnier: As my hon. Friend so kindly reminds us from the Front Bench, that time includes Front Benchers' contributions.
It beggars belief that the Financial Secretary dares go to the Dispatch Box and describe as adequate the timetable set out on page 852 of the Order Paper. It also beggars belief that she seeks to give cogent reasons for anything when she singularly failed to answer a direct question that I asked her, and did so with a boldness that I could only salute as it passed by.
My hon. Friend the Member for Aldridge-Brownhills made the important point that, according to paragraph 7, dilatory motions can be moved only by a Minister of the Crown. It states:
"No dilatory Motion with respect to, or in the course of proceedings on, the Bill shall he made in the Standing Committee or on an allotted day except by a Minister of the Crown".
This is the legislature of the British public, but only a Minister of the Crown can tell us how to conduct ourselves. It is not only in paragraph 7 that we find such powers given by the great silent ranks of the new Labour party. Paragraph 5(2) states:
"No Motion shall be made in the Standing Committee relating to the sitting of the Committee except by a Minister of the Crown, and the Chairman shall permit a brief explanatory statement from the Member"—
presumably, a Minister of the Crown—
"who moves, and from a Member who opposes, the Motion, and shall then put the Question thereon."
It is very kind of the Government to draft the motion in that way.
Paragraph 12(3) states:
"If on an allotted day on which any proceedings on the Bill are to be brought to a conclusion at a time appointed by this Order or a Resolution of the Business Committee the House is adjourned, or the sitting is suspended, before that time no notice shall be required of a Motion made at the next sitting by a Minister of the Crown for varying or supplementing the provisions of this Order."
First, only a Minister of the Crown can truncate the proceedings. Secondly, if he wishes to truncate proceedings further, he need not tell us that he is going to do so. I dare say that the statue of Cromwell outside this Palace is witnessing some changes—he must be smiling and enjoying the work of this Government as they become ever more as he used to be.
This will be a very bad period for Parliament. It started badly with the first guillotine—on the Referendums (Scotland and Wales) Bill—and is made worse by this shabby motion. Two huge Bills of great importance, one on the constitution and one on the way we raise our finances, are to be crushed into a timetable designed by a Government who do not have the confidence to allow us to debate the ideas that they did not have the confidence to put in their election manifesto. Before very long, the Government will learn that such conduct does not sit well with the British public.
5.35 pm
Mr. Damian Green: As a new Member, I have for several reasons found it educational to sit through all of this guillotine debate. First, it was a

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privilege to see a performance by the hon. Member for Bolsover (Mr. Skinner) live, as it were, having seen many previously through the media. It was educational not only for his performance which was, of course, inimitable but because of the interesting attitudes that lay behind what he said.
As I understand the hon. Gentleman's arguments, he felt passionately about the Industrial Relations Act 1971 and that it was therefore a constitutional monstrosity that it should have been guillotined. However, he does not care much one way or the other about the Budget, so, as he enters his declining years, he feels relaxed about voting for a guillotine motion on it. That is instructive for two reasons. First, the fact that he could not raise any enthusiasm for the Budget tells us a great deal about how it is going down with some Labour Back Benchers. Secondly, and perhaps more significantly, it shows a gap between rhetoric and reality. When a Member with such a distinguished and anti-establishment history as the hon. Member for Bolsover cannot bring himself to condemn a guillotine motion, one feels that the last fires of libertarianism within the Labour party are finally about to be extinguished. That is one of the lessons that was interesting to learn this afternoon.
The other lesson concerns the abject silence from every other nominal supporter of this shabby motion. On the day that Ministers are announcing the formation of a gimmicky people's panel of 5,000 people, which the Government are to use as an enlarged focus group on which to test all their legislation, it seems particularly ironic that this people's panel—the Parliament of Great Britain—should be so completely ignored and treated with contempt. If the Government are prepared, uniquely, to put a guillotine motion on the Finance Bill to the House in this way, the least tribute that they could pay to hon. Members and, indeed, to those who sent us here, is to put up a few people to defend the motion.
Mr. Oliver Heald: Or even attend.
Mr. Green: The fact that they have not bothered to do so is the most serious sign yet in eight weeks of arrogant government of just how arrogant the Government really are and how little regard they pay to the House.
It was also instructive to listen to the Financial Secretary moving the guillotine motion. One should perhaps deal directly with some of what one could charitably call the arguments that she offered in support of it. The first was that, faced with this unnecessary Budget, taxpayers want certainty. That is patently absurd. To say that people need to be certain that their pensions will be less valuable, that they will have to pay the 17 tax rises and that their mortgage and medical insurance will become more expensive is genuinely worrying, suggesting that during the past eight weeks the Treasury has lost the ability even to come up with a plausible line. The Minister was clearly talking tosh and she knew that at the time.
The Minister's only other argument in favour of the guillotine motion was that it had been done before by previous Conservative Governments. The House will be grateful to my right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke) for so comprehensively blowing up that argument, proving that no similar guillotine has been imposed so soon after a Budget.
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I urge the Government to learn the lessons of the past 18 years. They have spent 18 years criticising Conservative Governments. Perhaps one of their occasionally more justifiable criticisms was that rushed legislation is very likely to be bad legislation. Many of us have felt that. The most dangerous legislation to rush through—barely announced, certainly not analysed and not allowing for any consultation with outside bodies—is a Finance Bill. It is inevitably full of complex, technical issues that require detailed examination. It is certain that a Budget rushed through without proper consultation will prove to be a bad Budget for taxpayers and, in the end, for the Government.
The Government do not even have the excuse of the hysteria that has sometimes caused Governments to rush into ill-thought-out legislation. On occasion, the country has been seized by what feels like a moral panic, when there is a demand for action to which the Government have responded hastily and usually unwisely. That was not the case here. Nobody was demanding an early Budget from the Labour Government. Nobody would have objected if the Chancellor had arrived at No. 11 and the Treasury and said, "Well, we want to get on with it, but we think that it is sensible to think seriously about what we are going to do and carry on with the normal Budget timetable." There was no need for a July Budget and certainly no need for a Budget that is to be railroaded through the House with no proper examination.
We can dismiss the ostensible reasons that the Financial Secretary gave for the guillotine motion. What are the real reasons for the motion? The first is clearly that the Government are desperate to bring tax rises in as early as possible. They want to put taxes up now and put spending up later in the Parliament. They are determined to carry the tax rises through. Every month that they can bring them forward increases their revenue, taking yet more money out of the pockets of the British people. The increases in petrol duty and similar taxes will come into effect earlier than they would have done in a November Budget, allowing the Government to take more money from people, which will have a more damaging effect on the inflation rate and on all businesses that require motor transport.
The second reason is clearly that the Budget, like every other measure taken so far by the Government, is driven by the following day's headlines rather than by any long-term strategy. The most ridiculous claim so far made by the Government is that this is a Budget for the long term. Never has there been an Administration more driven by the short term. For the Government, the short term and the long term simply mean tomorrow morning's headlines. Nobody must be allowed to scrutinise the Budget properly, because that would reveal the ways in which it will unravel.
The Government are afraid not just of parliamentary scrutiny, as the guillotine motion shows, but, perhaps more seriously, of scrutiny by the many bodies outside Parliament that have expertise to bring to bear on the Budget process. It has already been observed during the debate that most of the amendments to Finance Bills in recent years have been introduced by the Government. Most of those changes are due to expert input from outside bodies that feel that they can contribute to good governance by responding to a Finance Bill and picking at its bones, telling the Government the unintended effects of certain clauses and how to write them in a different

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way. The guillotine motion will remove any possibility of those non-political expert outside bodies having a beneficial effect on the Budget.
Not only are the Government doing a disservice to the House and the electorate with the motion; they are doing a disservice to their Budget. They know that because of their approach and the speed with which they are putting the Budget through, they are making it even worse than it need be. The Government should do themselves a favour and not ram the Budget through in a way that is unnecessary and damaging to the British economy.
5.45 pm
Mr. Tim Collins: Like my hon. Friend the Member for Ashford (Mr. Green), I shall start by referring to the speech of the hon. Member for Bolsover (Mr. Skinner), who, sadly, is not in his place. He told us that the Conservatives should not be allowed to protest at this extraordinary guillotine. He said that those who had supported the Jopling reforms did not have a leg to stand on, and should support all guillotines in all circumstances.
There are a number of new Conservative Members who were not around when the Jopling reforms were being passed. Lord Jopling, as he now is, was my predecessor as the Member of Parliament for Westmorland and Lonsdale, so it is not surprising that I support the principle of the reforms that he introduced. However, they merely acknowledged—as we all do—that a Government, particularly one with a parliamentary majority as great as the current Government's, have the right to put their business through on a timetable if they so choose and if that is the prudent and sensible thing to do.
But why are the Government so desperate to bring forward a guillotine motion at such an early stage? I think that there are three reasons. The first is that, as we have already seen, the new Government do not think much of the House of Commons. Even though they have such a huge majority in this Chamber, they would rather that the House did not trouble the Executive much, if at all.
The Government are moving steadily and with ever-increasing speed to take power and influence away from this Chamber. They have halved the number of opportunities for hon. Members to question the Prime Minister. Almost their first step was to transfer from the Chamber one of the key economic levers—the ability to change interest rates. Not only did the Government not wait to bring legislation before the House; they did not even wait for the House to return so that a statement could be made to it. The Government's first act on the international stage transferred yet more power away from the House to our European partners and to the Commission in Brussels.
The guillotine motion is yet another example of an arrogant Government moving steadily to take power, influence and now even the right of debate away from the Chamber, because they want to take their decisions in their way. Those decisions will be made in Brussels or Whitehall—anywhere but here.
The second reason for the motion is that the Chancellor got his timing wrong. When the Government were preparing for the election, we were told that they were ready to take power—ready to hit the ground running.
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Almost as soon as the Prime Minister became leader of the Labour party, he started to issue calls for a general election. He said that the Labour party was ready to take office and to shape the destiny of the nation.
From 1994 to 1996, the then Opposition told us that the Government should make way for a new political party which knew exactly what it wanted to do and which would be able to implement all the required decisions instantly on taking office. Yet, when the Chancellor came into office, the initial press briefings which said that we could expect a Budget by the end of May slid into those that stated that we could expect one in June. We ended up with the Budget in early July. We are now having to accelerate the pace of debate on the Bill because the Chancellor could not meet his original deadline for the Budget.
Some of us may be a little understanding about that. We might be prepared to accept that a new Government coming into office would need time to prepare a radical Budget, but are such Budgets unprecedented?
There was a change of Government in 1979, and a Budget was introduced, but the circumstances were different from those that existed this year. The current Government knew exactly when the general election would be held, because, for more than a year, there had been speculation that 1 May would the likely date for general election. In 1979, the general election took place only because the previous Government lost a vote of confidence in the House. Suddenly, the nation was catapulted into a general election.
Yet Geoffrey Howe, now Lord Howe, was able to prepare and introduce a Budget within four weeks of that election result. It can hardly be said that that Budget was uncontroversial and simple—it included a dramatic change in the balance of taxation between income tax and value added tax. It also laid the framework for the medium-term financial strategy, as well as the ground work for 18 years of achievement.
That Budget was ready within four weeks of the election, but the present Government could not get their Budget ready within nine weeks of taking office. It has not been introduced simply to set the windfall tax, which the British people were invited to endorse in the ballot box on 1 May. If that had been the case, the Budget could have been introduced without delay; instead, it includes 17 separate tax increases, which breach every pledge made by the Prime Minister and the Chancellor when they were in opposition. They needed time to prepare for those increases, which is why the Budget was late and why we will have to telescope debate.
Every stage of the Bill, from the announcement of the Budget through to the passage of the Finance Act, will be completed within the space of one month. That is quite extraordinary. That action is necessary because the Government are breaking their pledges and have been proved incompetent now that they are in charge of Treasury. They underestimated the time it would take to prepare a Budget.
The Government's actions are dictated by one part arrogance and one part incompetence, but there is another ingredient, which has been evident in the Chamber today—cowardice. The Government are afraid of debate.
Some of us have seen press reports in the past few weeks that the Minister without Portfolio has issued instructions to every Labour Member of Parliament to

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seize every opportunity available in the House and outside it to blacken the reputation of 18 years of Conservative government. They are under instruction to spread a new mythology through the land that 18 years of Conservative government have damaged the fabric of our nation.
Even though the Labour party has now had to accept so many of our policies, from council house sales to trade union reform, privatisation and the nuclear deterrent, the Minister without Portfolio has said that Labour Members must take every opportunity to attack the record of Lady Thatcher and my right hon. Friend the Member for Huntingdon (Mr. Major).
Where are those Labour Members? Have they seized the opportunity of the debate to attack the record of the previous Government? No, they have not. Have they even seized the opportunity of the debate to speak in support of their Government, their Budget or the guillotine? No, they have not. Throughout the debate, there have been far more Conservative Members present than Labour ones.
Legend has it that 418 Labour Members were elected on 1 May, but 410 of them have been notable by their absence throughout the debate. Where are they? Have they been let off by the Minister without Portfolio to act on the wonderful phrase that he allowed his spin doctors to spin around the Chamber—that they would be sent home to acquaint themselves with their constituents? Is that where the 410 have gone? Why is that troupe of Labour Members not present for this important debate? Why will their Government do anything and everything to deny them free speech in a proper debate on the Finance Bill?
The reason for that silence was spelt out by the hon. Member for Bolsover, who said that there are just 100 Front-Bench jobs that the Prime Minister can offer, while 418 people are competing for them. He said that, in due course, the other 318 Members may find that the attractions of the Front Bench will simply never be available to them—mathematically, it is impossible for all of them to get a job. The hon. Gentleman advised that they should listen to what he had to say, and suggested that they should follow him in being a little creative, inspirational and flexible around the margins of Labour policy. That is what those on the Labour Front Bench fear. They fear not what we might say in a proper debate on the Finance Bill, but what their own Back Benchers would say in a proper debate.
Today, we have seen that arrogance and incompetence plus cowardice means rushed legislation and the introduction of a guillotine at a far earlier stage than in the proceedings of any previous Government. That has been done to attempt to stifle debate in the House. That will produce bad actions from a bad Government.
5.56 pm
Mr. Quentin Davies: The most extraordinary thing about the debate has been the absence throughout it, except during the speech of the Financial Secretary to the Treasury, of the Leader of the House. She presided over the introduction of the timetable motion, and decided to ride roughshod over the rights of the House by denying it the opportunity to scrutinise the legislation in whatever time we thought to be appropriate. She has adopted a procedure which "Erskine May" and all our traditions make it clear can be resorted to only in exceptional circumstances. Despite all that, the right hon. Lady left the Chamber after the introductory speech of her hon. Friend.
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The right hon. Lady cannot even be bothered, or is not even willing, to display the courtesy of waiting to hear what the House, which she supposedly leads, thinks about the decision. I do not know what you think about leadership of that kind, Mr. Deputy Speaker, but it certainly does not meet my notion of what leadership of the House of Commons should involve.
This is a sad day for the House of Commons. I know that there have been timetable motions in the past—far too many, in my view—introduced by Conservative and Labour Governments, but today we are going further down the road. We have heard today that previous Governments have had excuses for introducing timetable motions that do not exist today. There have been filibusters in the course of Bills, and the Government of the day have had to resort to a timetable motion. All of us agree that, if there is a genuine filibuster, it is necessary to have the sanction of a timetable motion.
It has been said that, on previous occasions, the Finance Bill has been guillotined because there was a general election in the middle of it—the earlier part of it went through without a guillotine. That may not be a good excuse, either. I regret that guillotines should have been used so frequently. I for one never voted for the Jopling proposals, because I never wanted to curtail our debates artificially except in exceptional circumstances. I always believed that the onus must fall on the Government to show that the circumstances are genuinely exceptional.
But none of the excuses that have apparently been attached to previous timetable motions can be attached to today's motion. We have not started debate on the Finance Bill in Committee; there has been no filibuster, and no amendments have been tabled that might be regarded as obstructive. There has not been a general election in the middle of proceedings, after the initial publication of the Finance Bill. This is one further major step towards treating debates in the House as a perfunctory ritual exercise. That is extremely sad for anyone who believes in the useful role that the House should play. It is sad for the cause of good legislation. It is a bad day.
One cannot help noticing that the subject of today's guillotine motion is the Finance Bill. There is something special about Finance Bills; through them, we levy taxes—we take away a citizen's property. This place has been in existence for 700 years; we have always recognised the Finance Bill as one of its most vital and sensitive roles. We should not abuse the power we have to take away other people's property. By definition, we need to have the maximum debate, careful consideration and open argument. The Government who propose the fiscal measures should be forced to defend themselves.
Another matter, which is not quite so serious, but serious nevertheless, is that a Finance Bill is complex. No human being can honestly say that he or she is capable of grasping the full meaning of a Finance Bill on first reading. Even experts who make their living explaining the exigencies of Finance Bills to their clients would not dream of coming to too rapid a conclusion about their meaning. A Finance Bill needs more time for consideration than most legislation. It is important that experts and potential taxpayers who may bear the impact of the Finance Bill should have the opportunity to give it thorough consideration.
The House also needs to decide whether the Budget's basic fiscal judgment is appropriate. I argued strongly on Second Reading that it was inappropriate for a

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Government who said clearly in the Red Book that the economy was overheating, that the output gap was close to zero, that there was more overheating in the service sector than in manufacturing, but that there were strong signs of excessive growth in consumption in both sectors—and all that before the windfall gains that have come to members of building societies as a result of the societies' demutualisation—not to introduce a Finance Bill to address those problems. Now is not the time to discuss whether the diagnosis was right. The Budget should provide an appropriate economic remedy.
We need time to debate such matters, and to make the essential calculations. The Red Book contains nothing about the incremental liability of companies to make additional provision to maintain the solvency of their occupational pension schemes. We know that many companies will have to make such additional provision; it is compulsory, under statute law passed through the House, that companies must maintain the solvency of their occupational pensions with guaranteed benefits.
However, we also know that, because of the abolition of the dividend tax credit—a provision contained in the Bill—the return on investments made by pension funds in British equities, which is far and away the biggest aspect of British pension funds' investment, will be substantially reduced. We know that there will be a burden on the corporate sector. The Government have not calculated that burden for us, but we need to know what it is before we can consider the Bill in the round. We cannot complete the calculation overnight; individual companies will have to use their computers and work out the figures so that we can see the aggregate position in the British economy as a whole.
It is an insult to give the House just 12 days to scrutinize—not merely nod through—complex legislation, to consider in detail the economic consequences of what is proposed, and to do an honest job for those who have sent us here. Frankly, it would be a joke were it not so serious. Such action is serious, not only in relation to the Bill's impact, but because the way in which the matter has been handled will have serious consequences for the respect in which Parliament and our procedures are held by the public.
The fact that, having introduced the shocking guillotine motion this afternoon, the Leader of the House cannot be bothered to listen to what we have to say about the measure that is about to be rammed through by an arrogant Government with an enormous majority, is perhaps the most disgraceful aspect of our proceedings.
6.5 pm
Sir Patrick Cormack: I almost feel that I should crave the House's indulgence for a maiden speech. To stand at the Dispatch Box and wind up a debate after 27 years is an unusual experience. It is also an unhappy one, not merely because of the subject matter, but because we have not really had a debate. There have been a series of admirable speeches from my right hon. and hon. Friends, but only two offerings from the Government.
The Financial Secretary tried hard, but did not succeed, to justify the application of the timetable motion. The hon. Member for Bolsover (Mr. Skinner), who is sadly not in
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his place now, gave an inimitable speech. He treated us to one of his three or four set-piece speeches and gave it with his customary panache. He made it quite plain that he was speaking for himself, standing alone. He also made it plain that he was hoping to become a recruiting sergeant for the 318 Labour Members of Parliament who are unlikely to get Government jobs. I hope that he succeeds: if he does, it might enliven our proceedings.
We must consider today's motion in the light of two factors. First, will the Budget and the Finance Bill receive adequate scrutiny and debate in Committee, both on the Floor of the House and in the Committee Room? Secondly, are the procedures of the House being sensibly and sensitively used by a Government who have proclaimed, through the Leader of the House—I am glad to see that she is at last returning to the Chamber—that they wish to see those procedures modernised and adapted?
If there are any problems over the timing of the Finance Bill, they are of the Government's own making. In an admirable and fluent speech, my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) said that in 1979, when we had a change of Government and an election on 3 May, we had a fairly complex Budget on 12 June, followed by a Finance Bill. That Finance Bill was not guillotined. If this Government had stuck to their original date and produced a Budget on 10 June—throughout and just after the election, they were telling us that they were aiming for a Budget at about that time—we would have had adequate debate on the Finance Bill.
We could forgive the Government their actions if what they had produced was a Budget that merely enacted the measures that they had talked about during the election campaign—if it had been a Budget to introduce the windfall tax and virtually nothing else. But that is not the case. As hon. Member after hon. Member—including the hon. Member for Hazel Grove (Mr. Stunell), in an excellent contribution—has made plain, we are dealing with a major Budget and a major Finance Bill. The Bill will affect people throughout the country. My hon. Friend the Member for Ashford (Mr. Green) called it a short-term Budget and, in the context in which he used those words, they were entirely right and accurate. However, although it may be a short-term Budget, it will inflict long-term pain.
That we shall have, in effect, only two and a half hours to debate each of the four clauses to be taken on the Floor of the House is not only an insult to the House of Commons, but an insult to the people who sent us here and to all those whose lives will be touched and affected by the Finance Bill. We have to consider the changes to advance corporation tax—even the Leader of the House did not seem to be entirely clear about the implications when answering business questions last week—foreign income dividends and a whole range of measures that deserve proper consideration in the House. More important, there should be time to consult the outside interests who have legitimate points to make to their Members of Parliament.
The Leader of the House, who chairs the Select Committee on Modernisation of the House of Commons and does so with great distinction and good humour, is always reminding us—I shall not breach confidences by talking about what we are discussing upstairs—that we

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need to have proper timetabling for Bills. I have never been a friend of the brutal guillotine and I have voted against guillotines introduced by Governments of both parties. I shall never forget five-in-a-day Michael Foot, when five guillotines were introduced in the House in one day under a previous Labour Government. I have always felt that the guillotine is a brutal weapon; at the same time, I have always favoured proper and adequate timetabling, but adequate timetabling means precisely that—there must be a proper opportunity to debate each issue in some detail. Nobody in this House can pretend for a moment that two and a half hours, which must encompass the Front-Bench speeches, is enough time to debate ACT or anything else of any importance. The Government are, indeed, behaving with Cromwellian disdain for this House—one wonders when someone will come in and tell us to "Take away these baubles." It is monstrous that such arrogance should be displayed so early in the life of a Government.
As my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) pointed out, this is the second guillotine on a major Bill in eight weeks. He made the excellent point, picked up by one or two other of my hon. Friends, that it is only just beginning to hit home with local authorities that they will be affected by the Budget and that there could be consequential increases in council tax throughout the country. Why is proper time not allowed for the Government to consult the leaders even of Labour-controlled local authorities? Sadly, at the moment the Conservatives do not control many local authorities, but the Paymaster General's party does and he is not allowing anything like enough time for proper consultation.
The Bill is being steamrollered through the House. In her admirable speech, my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) pointed out that, with all the Conservative Government's Finance Bills, there was an average of 77 days between publication of the Bill and the completion of its passage through the House; and that only two Finance Bills in 18 years were timetabled by the Conservative Government. Yet here we have a complex Bill, introduced on the eve of the recess, which is to be steamrollered through in this way.
There is no need for that to happen. The Leader of the House can keep us here in August if she wants to—we shall come; we shall debate the Bill; we have no objection. We would rather have the Finance Bill adequately and properly debated in August than rushed through in July. Such is the Government's majority that we know that they will get their way, so there is no particular reason why the Bill should not be completed when we come back, even if we do not come back until the traditional October. Sadly, I do not have the cottage in Sardinia that the hon. Member for Bolsover wished on me, but the Paymaster General has a villa in Tuscany and he is obviously longing to get there. It is not the shooting of grouse, but the basking in the Tuscan sun while drinking chianti that is propelling the Bill through the House. I should not say too much on that subject, because I live in the fond hope that I shall one day receive an
62
invitation to that palatial home, in which so many of the great issues of the nation have been discussed over the past few years.
Mr. Skinner: There will be a lot of people in the queue.
Sir Patrick Cormack: I am sure that there will. The guest list is doubtless one of the most illustrious compiled in recent times.
Mr. Collins: Publish it.
Sir Patrick Cormack: Publish it, indeed.
To return to the purpose of the debate, this is a serious issue. Good humour should always enliven our debates and it is a good thing when it does, but I would say to all Labour Members—especially those who have recently joined our number—that they are doing no service, either to themselves or to their constituents, if they allow themselves to be used as ciphers and rubber-stamp everything that the Government of the day place before them. As one of my hon. Friends said, they must not allow themselves to be, in effect, usurped by the people's panels, the setting up of which was announced today.
If there is a true people's panel, it should be here in this House, whose Members are elected by the people—that is what we are here for. We are here to discuss, to debate, to deliberate and to scrutinise. It is the duty of the legislature to hold the Executive to account, regardless of which party the Executive come from. I can say that because I frequently made speeches critical of my own party when it was in government—that is probably why it has taken me 27 years to get to the Dispatch Box. Labour Members—especially those who are newly elected—should give a thought to this: there is no greater honour than to be elected to this House, but one is elected to this House as a representative of one's constituency; one's political party membership takes a very low second place to that.
Every Member of Parliament has a duty to scrutinise, to examine and to speak, and hon. Members who have absented themselves this afternoon from the debate and abdicated their opportunity to contribute to it have not been setting a good example or serving their constituents as well as they might have done. If we are able to agree on proposals to modernise the procedures of this House—I am bound to say that the actions of the Leader of the House call into question her sincerity in that respect—it is extremely important that everybody tries to make the new system work. It is not sensible debate when half the House absents itself for a whole afternoon.
The President of the Council and Leader of the House of Commons (Mrs. Ann Taylor): It takes two sides.
Sir Patrick Cormack: The right hon. Lady says that it takes two sides, but this afternoon we have had only one

63
side—no Labour Back Bencher has been prepared to stand and speak in support of the motion. Perhaps I should draw a charitable conclusion from that and say that it is because the Government have no stomach for it. They certainly should not have the stomach for it, because it is despicable for the Government to place the motion before the House only eight weeks after the general election. Having bodged their timetabling, delayed the Budget unnecessarily and made it far more complex than it need have been—indeed, we need not have had a Budget until November—the Government are seeking to ride roughshod over the procedures and Members of the House.
I urge all hon. Members from minority parties, who I hope are here in force, to register their collective disapproval of a Government who have behaved with a disdainful arrogance that augurs ill for democracy.
6.20 pm
The Paymaster General (Mr. Geoffrey Robinson): I am sure that the whole House will join me in welcoming the hon. Member for South Staffordshire (Sir P. Cormack) to his new position as—I must get this right—deputy shadow Leader of the House. As he reminded us, he has been in this place for 27 years, and it is fitting that he should attain that rank and—as I am sure that the House will agree—much more during a distinguished career in this place.
Several times, the hon. Gentleman upbraided Labour Members for not being present in full force this afternoon. He and his hon. Friends have told us at great length and with great force that it is disgraceful that there is not enough time, in the timetable in the guillotine motion that we propose for the Finance Bill, for all aspects of the Bill to be studied thoroughly enough.
As Opposition Members will realise, we went to a great deal of trouble to provide time on Second Reading, and if the hon. Gentleman had been present, he would have seen that for hours on end there was barely a Conservative Member in the Chamber, let alone taking part in the debate. That is how phoney, hypocritical and irrelevant the tone of the Opposition speeches has been.
We are having the debate only because my hon. Friend the Member for Coventry, North-East (Mr. Ainsworth) could not get his opposite number, the Conservative Whip, the hon. Member for Maldon and Chelmsford, East (Mr. Whittingdale), even to talk about an end date for the Finance Bill. He was not allowed to. I have a handwritten but very detailed account from my hon. Friend about all his meetings—how hard he tried—
Mr. Garnier: Put him on oath.
Mr. Robinson: In case the hon. and learned Gentleman did not realise, we are all on oath in this Chamber. It is sad that he did not realise it, and many Opposition contributions would be much better if that fact were more widely realised.
My hon. Friend the Member for Coventry, North-East visited the Conservative Whip at 2.55 pm on 7
64
July. At 3.25 pm, my hon. Friend went to see him, and at 4 o'clock. He spoke with him at 4.27 pm. He agreed that they would meet—but the Whip had to rush off and see a Secretary of State; he could not meet my hon. Friend. Could he see my hon. Friend at 5 o'clock? He could not see him, and the one thing that he could not do was talk about the timetable. By the end of the day—the end of the titanic negotiation that had taken place between the two of them—the only items that could be discussed were the matters that should be taken on the Floor of the House and the size of the Committee. It went on similarly on 8 July and 9 July, and for that reason—because we could not reach a sensible understanding through the usual channels—we had to introduce a timetable motion.
Dr. Liam Fox: Will the hon. Gentleman give way?
Mr. Robinson: I want to make some progress.
Our objectives are twofold: to ensure time for adequate scrutiny of the Budget, and to ensure that we deliver on our commitment to the people of the United Kingdom before the autumn. The guillotine motion is the only way in which to achieve those objectives. The timetable is necessary because we will not let the Opposition stand in the way of legislation, to ensure that the priorities that people voted for on I May and which are contained in the Finance Bill come into force. We will not let delaying tactics by the Opposition stand in the way of the priorities of the British people.
The British people voted for a cut in VAT on fuel to 5 per cent.; the Finance Bill cuts VAT on fuel to 5 per cent. We want that legislation passed as soon as possible, so that the bills are cut by the winter. That is why we are introducing the change on 1 September, and we will not let the Opposition stand in the way.
The British people voted for a windfall levy on the excess profits of the privatised utilities, to help us move people from welfare to work. The Finance Bill legislates for the windfall levy. We want the programme of work for the young unemployed, the long-term unemployed and single parents to be up and running as soon as possible.
Mr. Peter Lilley: I thank the hon. Gentleman for giving way, unlike the Financial Secretary to the Treasury. He bases his argument, as she did, on promises made by the Labour party. Did the British people vote for 17 tax increases? Above all, did they vote for the imposition of £5 billion tax on their pension funds? The answer is no, so those measures should not be rammed through by a guillotine motion.
Mr. Robinson: People voted in record numbers for a Labour Government, who gained a massive majority, when a windfall tax and a cut in VAT on fuel had been clearly spelt out in the Labour manifesto, as had an economic policy based on the medium and long term, not on the short-term fixes that the country got sick of under the Tories.
Dr. Fox: The hon. Gentleman mentioned detailed contacts between the Whips Offices. I wonder whether he has the authority of the Chief Whip and the Leader of the House to make public contacts between the usual channels, and whether that is the way in which the Government will do business in future.
Mr. Robinson: I am merely explaining why it was impossible to reach an agreed timetable for the Bill and why, with great regret, we had to introduce a timetable motion.
Mrs. Gillian Shephard: We heard all that from the Financial Secretary to the Treasury. May we now hear, concisely, exactly how the timetable promotes sensible input, partnership and consultation with the business sector, so vaunted by the Government?
Mr. Robinson: We have an excellent set of relationships with the business sector. As the right hon. Lady knows, business people voted for us in droves and explained why they had done so, and we shall continue to develop those excellent relationships as the business sector looks forward to a Labour Government with not one period in office but, in all probability, two.
We have had all the usual hypocritical high dudgeon from Opposition Members. They seem to be upset that they are not introducing the motion themselves. After all, they have had plenty of practice, and we need no lectures from a Tory Government who introduced 82 guillotines on 61 Bills.
In February 1994, there were four guillotines in four weeks. The Tories guillotined the longest Finance Bill in history—244 clauses and 24 schedules—after only five hours in Committee; and the right hon. Member for South-West Norfolk (Mrs. Shephard) has the gall to lecture us, telling us that "Erskine May" says that only after a suitable and appropriate number of hours in Committee should a timetable motion be introduced. I am talking about facts; Conservative Members do not want to hear about them, but they will have to.
This time round, a new element has crept into the Tories' approach—an extension to opposition of their incompetence in government. I am so pleased that the deputy shadow Chancellor of the Exchequer, the hon. Member for Daventry (Mr. Boswell), is in the Chamber.
Mr. Stunell: Will the hon. Gentleman give way?
Mr. Robinson: I shall in a moment.
As the hon. and learned Member for Harborough (Mr. Garnier) pointed out, we start the Committee on the Floor of the House tomorrow, between 3.30 pm and 3.45 pm. We look forward to a great deal of technical debate, inspired by the depth of knowledge and other characteristics that Opposition Members will bring to the Committee.
I hate to tell the House that, of the eight amendments so far tabled by the Opposition, none has been accepted by the House authorities as being in order for debate and Division. We have a situation, unique in my
66
knowledge of Committee work, where tomorrow, even if starred amendments are introduced today, there will be no Opposition amendment that we can debate specifically and on which the Committee can divide—and the shadow Chancellor prides himself on his intellectual mastery of detail.
Since I entered the House, I have believed that a Government with a working majority—we certainly seem to have that—have a right to get their business through the House. In doing so, they should show regard for the Opposition, for minority parties and for Back Benchers on both sides of the House; we have certainly done that. While we are anxious to put our policies into action as soon as possible, we are also keen to allow hon. Members and people outside the House to scrutinise the measures in the Budget and to consider its details carefully. That is why we have allowed two days in Committee on the Floor of the House, which, incidentally, is the same as the previous Government allowed in 1996–97 for a Finance Bill that had twice the number of clauses as ours. It is also the same amount of time as they gave their Finance Bill in 1995–96, which had four times the number of clauses as the Bill before the House.
Mr. Stunell: The Minister seems to base a substantial part of his case on the fact that, because the Tories did the same, it is all right for Labour to do it. Can he expound that argument a little further in relation to financial and other matters on which the Opposition have criticised the Government?
Mr. Robinson: It would be more encouraging if the Liberal Democrat Opposition had done what they did on previous occasions and supported timetable motions put forward by the Conservative Government. The hon. Gentleman must consider that we wanted to avoid a guillotine motion but, because the Opposition would not consider an end date for the Bill, we resorted reluctantly to the guillotine.
Despite all that, we have ensured that the four big issues—the windfall tax, MIRAS, medical insurance and pension tax credits—which the Opposition wanted to debate on the Floor of the House, will be debated here. We have enabled the Standing Committee to meet for five days, which is more time per clause than the previous Government usually allowed.
The length of the Budget debate was agreed in the usual way, and we had four days' debate instead of the two days that the Opposition originally proposed. We now know why they proposed only two days—there is so little real interest on the Opposition Benches that they could not keep anything near an acceptable complement of their Members in the Chamber.
We tried time and again to agree a timetable with the Opposition. We agreed to their request for a Standing Committee of 35 members, which is 25 per cent. more than the Standing Committee that dealt with the

67
previous Finance Bill. Although we have increased the number and extended the time as far as we reasonably can, it is still beyond their wit and competence to introduce a single amendment for the first stage of the Committee tomorrow on the Floor of the House, which will deal with the windfall tax. We have agreed with the Opposition on what the issues should be. We even agreed to have a later Committee stage, to give them time to get their act together.
The Tories on the Standing Committee should therefore knuckle down, put in the work and stop whingeing. Above all, they should start to get a grip of the Bill that they want to scrutinise. We had no choice but to impose a guillotine motion, to ensure that the Bill is passed before the summer recess.
The Opposition say that they are worried that interested bodies will not have an adequate chance to comment on the Budget. We welcome their scrutiny, which is why we published the Bill in draft before its formal publication. We provided that amendments could be tabled from Monday evening, even before Second Reading, but still the Opposition have not tabled one that is in order.
The election on 1 May showed decisively that the British people wanted Britain to be set on a new course. The Finance Bill puts our manifesto commitments into practice. It starts to equip our country for the future and it meets the people's priorities. The Opposition should stop trying to re-fight the battles of the election, because the British people have made their choice. We shall not allow the Opposition to obstruct the will of the British people or the people's priorities. The Finance Bill keeps our promises to the British people and stands up for the people's priorities. I commend the timetable motion to the House.
Question put:—
The House divided: Ayes 342, Noes 175.

Division No. 53]

[6.33 pm

AYES

Abbott, Ms Diane

Blears, Ms Hazel

Adams, Mrs Irene (Paisley N)

Blizzard, Bob

Ainger, Nick

Blunkett, Rt Hon David

Ainsworth, Robert (Cov'try NE)

Borrow, David

Allen, Graham (Nottingham N)

Bradley, Keith (Withington)

Anderson, Donald (Swansea E)

Bradshaw, Ben

Anderson, Janet (Rossendale)

Brinton, Mrs Helen

Armstrong, Ms Hilary

Brown, Rt Hon Gordon (Dunfermline E)

Ashton, Joe

Atkins, Charlotte

Brown, Rt Hon Nick (Newcastle E)

Austin, John

Brown, Russell (Dumfries)

Banks, Tony

Browne, Desmond (Kilmamock)

Barnes, Harry

Buck, Ms Karen

Barron, Kevin

Burden, Richard

Battle, John

Burgon, Colin

Bayley, Hugh

Butler, Christine

Beard, Nigel

Byers, Stephen

Beckett, Rt Hon Mrs Margaret

Campbell, Alan (Tynemouth)

Bell, Stuart (Middlesbrough)

Campbell, Mrs Anne (C'bridge)

Benn, Rt Hon Tony

Campbell, Ronnie (Blyth V)

Bennett, Andrew F

Campbell-Savours, Dale

Benton, Joe

Canavan, Dennis

Best, Harold

Cann, Jamie

Betts, Clive

Caplin, Ivor

Blackman, Liz

Casale, Roger

68

Caton, Martin

Gilroy, Mrs Linda

Cawsey, Ian

Godman, Dr Norman A

Chapman, Ben (Wirral S)

Godsiff, Roger

Chaytor, David

Goggins, Paul

Chisholm, Malcolm

Golding, Mrs Llin

Clapham, Michael

Gordon, Mrs Eileen

Clark, Dr Lynda (Edinburgh Pentlands)

Graham, Thomas

Griffiths, Jane (Reading E)

Clarke, Charles (Norwich S)

Griffiths, Win (Bridgend)

Clarke, Eric (Midlothian)

Grocott, Bruce

Clarke, Rt Hon Tom (Coatbridge)

Grogan, John

Clelland, David

Gunnell, John

Clwyd, Ann

Hall, Mike (Weaver Vale)

Coaker, Vernon

Hall, Patrick (Bedford)

Coffey, Ms Ann

Hamilton, Fabian (Leeds NE)

Cohen, Harry

Hanson, David

Coleman, Iain (Hammersmith)

Heal, Mrs Sylvia

Colman, Tony (Putney)

Henderson, Doug (Newcastle N)

Connarty, Michael

Henderson, Ivan (Harwich)

Cook, Frank (Stockton N)

Heppell, John

Cooper, Yvette

Hesford, Stephen

Corbett, Robin

Hewitt, Ms Patricia

Corbyn, Jeremy

Hill, Keith

Corston, Ms Jean

Hinchliffe, David

Cousins, Jim

Hoey, Kate

Cox, Tom

Home Robertson, John

Cranston, Ross

Hood, Jimmy

Crausby, David

Hoon, Geoffrey

Cryer, Mrs Ann (Keighley)

Hope, Phil

Cryer, John (Hornchurch)

Hopkins, Kelvin

Cunningham, Jim (Cov'try S)

Howarth, George (Knowsley N)

Cunningham, Rt Hon Dr John (Copeland)

Hoyle, Lindsay

Hurst, Alan

Curtis-Thomas, Mrs Claire

Hutton, John

Dalyell, Tam

Iddon, Dr Brian

Darling, Rt Hon Alistair

Illsley, Eric

Darvill, Keith

Ingram, Adam

Davey, Valerie (Bristol W)

Jackson, Ms Glenda (Hampstead)

Davidson, Ian

Jackson, Helen (Hillsborough)

Davies, Rt Hon Denzil (Llanelli)

Jamieson, David

Davies, Geraint (Croydon C)

Jenkins, Brian (Tamworth)

Davis, Terry (B'ham Hodge H)

Jones, Barry (Alyn & Deeside)

Dawson, Hilton

Jones, Ms Fiona (Newark)

Dean, Mrs Janet

Jones, Helen (Warrington N)

Denham, John

Jones, Ms Jenny (Wolverh'ton SW)

Dismore, Andrew

Dobson, Rt Hon Frank

Jones, Jon Owen (Cardiff C)

Donohoe, Brian H

Jones, Dr Lynne (Selly Oak)

Doran, Frank

Jowell, Ms Tessa

Dowd, Jim

Keeble, Ms Sally

Drown, Ms Julia

Keen, Alan (Feltham & Heston)

Dunwoody, Mrs Gwyneth

Keen, Mrs Ann (Brentford)

Eagle, Angela (Wallasey)

Kemp, Fraser

Eagle, Maria (L'pool Garston)

Kennedy, Jane (Wavertree)

Edwards, Huw

Khabra, Piara S

Efford, Clive

Kidney, David

Ellman, Ms Louise

Kilfoyle, Peter

Ennis, Jeff

King, Andy (Rugby & Kenilworth)

Etherington, Bill

King, Ms Oona (Bethnal Green)

Fatchett, Derek

Kingham, Mrs Tess

Field, Rt Hon Frank

Ladyman, Dr Stephen

Fitzpatrick, Jim

Lawrence, Ms Jackie

Fitzsimons, Loma

Laxton, Bob

Flynn, Paul

Lepper, David

Follett, Barbara

Leslie, Christopher

Foster, Michael Jabez (Hastings)

Lewis, Ivan (Bury S)

Foster, Michael John (Worcester)

Liddell, Mrs Helen

Foulkes, George

Linton, Martin

Fyfe, Maria

Livingstone, Ken

Galbraith, Sam

Lloyd, Tony (Manchester C)

Galloway, George

Lock, David

Gapes, Mike

Love, Andrew

Gardiner, Barry

McAllion, John

George, Bruce (Walsall S)

McAvoy, Thomas

Gerrard, Neil

McCafferty, Ms Chris

Gibson, Dr Ian

McCartney, Ian (Makerfield)

69

McDonagh, Siobhain

Ruddock, Ms Joan

Macdonald, Calum

Russell, Ms Christine (Chester)

McDonnell, John

Ryan, Ms Joan

McIsaac, Shona

Sawford, Phil

Mackinlay, Andrew

Sedgemore, Brian

McLeish, Henry

Sheerman, Barry

McNulty, Tony

Sheldon, Rt Hon Robert

MacShane, Denis

Shipley, Ms Debra

Mactaggart, Fiona

Short, Rt Hon Clare

McWalter, Tony

Simpson, Alan (Nottingham S)

Mahon, Mrs Alice

Singh, Marsha

Mallaber, Judy

Skinner, Dennis

Mandelson, Peter

Smith, Rt Hon Andrew (Oxford E)

Marsden, Gordon (Blackpool S)

Smith, Miss Geraldine (Morecambe & Lunesdale)

Marshall, David (Shettleston)

Marshall-Andrews, Robert

Smith, Jacqui (Redditch)

Maxton, John

Smith, John (Glamorgan)

Meacher, Rt Hon Michael

Smitn, Llew (Blaenau Gwent)

Meale, Alan

Snape, Peter

Michael, Alun

Soley, Clive

Michie, Bill (Shef'ld Heeley)

Spellar, John

Milburn, Alan

Squire, Ms Rachel

Miller, Andrew

Starkey, Dr Phyllis

Mitchell, Austin

Steinberg, Gerry

Moffatt, Laura

Stevenson, George

Moonie, Dr Lewis

Stewart, David (Inverness E)

Morgan, Ms Julie (Cardiff N)

Stewart, Ian (Eccles)

Morgan, Rhodri (Cardiff W)

Stoate, Dr Howard

Morley, Elliot

Stott, Roger

Morris, Ms Estelle (B'ham Yardley)

Strang, Rt Hon Dr Gavin

Mountford, Kali

Straw, Rt Hon Jack

Mowlam, Rt Hon Marjorie

Mudie, George

Stringer, Graham

Mullin, Chris

Stuart, Ms Gisela (Edgbaston)

Murphy, Jim (Eastwood)

Sutcliffe, Gerry

Murphy, Paul (Torfaen)

Taylor, Rt Hon Mrs Ann (Dewsbury)

Naysmith, Dr Doug

Norris, Dan

Taylor, Ms Dari (Stockton S)

O'Brien, Bill (Normanton)

Thomss, Gareth (Clwyd W)

O'Brien, Mike (N Warks)

Thomas, Gareth R (Harrow W)

O'Hara, Edward

Timms, Stephen

Olner, Bill

Tipping, Paddy

O'Neill, Martin

Todd, Mark

Organ, Mrs Diana

Touhig, Don

Osborne, Mrs Sandra

Trickett, Jon

Pearson, Ian

Truswell, Paul

Pendry, Tom

Turner, Dennis (Wolverh'ton SE)

Perham, Ms Linda

Turner, Desmond (Kemptown)

Pickthall, Colin

Twigg, Derek (Halton)

Pike, Peter L

Twigg, Stephen (Enfield)

Plaskitt, James

Vaz, Keith

Pollard, Kerry

Vis, Dr Rudi

Pond, Chris

Walley, Ms Joan

Pope, Greg

Ward, Ms Claire

Pound, Stephen

Watts, David

Powell, Sir Raymond

White, Brian

Prentice, Ms Bridget (Lewisham E)

Whitehead, Dr Alan

Prentice, Gordon (Pendle)

Wicks, Malcolm

Primarolo, Dawn

Williams, Rt Hon Alan (Swansea W)

Purchase, Ken

Quin, Ms Joyce

Williams, Alan W (E Carmarthen)

Quinn, Lawrie (Scarborough)

Williams, Mrs Betty (Conwy)

Radice, Giles

Wills, Michael

Rapson, Syd

Winnick, David

Raynsford, Nick

Winterton, Ms Rosie (Doncaster C)

Reed, Andrew (Loughborough)

Wise, Audrey

Reid, Dr John (Hamilton N)

Woolas, Phil

Robinson, Geoffrey (Cov'try NW)

Worthington, Tony

Roche, Mrs Barbara

Wray, James

Rogers, Allan

Wright, Dr Tony (Cannock)

Rooker, Jeff

Wright, Tony D (Gt Yarmouth)

Rooney, Terry

Wyatt, Derek

Ross, Ernie (Dundee W)

Rowlands, Ted

Tellers for the Ayes:

Roy, Frank

Mr. Kevin Hughes and

Ruane, Chris

Mr. John McAllion.

70

NOES

Ainsworth, Peter (E Surrey)

Harvey, Nick

Allan, Richard (Shef'ld Hallam)

Hawkins, Nick

Amess, David

Heath, David (Somerton & Frome)

Arbuthnot, James

Heathcoat-Amory, Rt Hon David

Atkinson, Peter (Hexham)

Hogg, Rt Hon Douglas

Baker, Norman

Horam, John

Ballard, Mrs Jackie

Howard, Rt Hon Michael

Bercow, John

Howarth, Gerald (Aldershot)

Beresford, Sir Paul

Hughes, Simon (Southwark N)

Blunt, Crispin

Hunter, Andrew

Body, Sir Richard

Jack, Rt Hon Michael

Boswell, Tim

Jackson, Robert (Wantage)

Bottomley, Peter (Worthing W)

Jenkin, Bernard (N Essex)

Bottomley, Rt Hon Mrs Virginia

Johnson Smith, Rt Hon Sir Geoffrey

Brady, Graham

Brake, Thomas

Jones, Nigel (Cheltenham)

Brand, Dr Peter

Keetch, Paul

Brazier, Julian

Key, Robert

Brooke, Rt Hon Peter

King, Rt Hon Tom (Bridgwater)

Bruce, Ian (S Dorset)

Kirkbride, Miss Julie

Bruce, Malcolm (Gordon)

Laing, Mrs Eleanor

Burns, Simon

Leigh, Edward

Burstow, Paul

Letwin, Oliver

Butterfill, John

Lewis, Dr Julian (New Forest E)

Cable, Dr Vincent

Lidington, David

Cash, William

Lilley, Rt Hon Peter

Chapman, Sir Sydney (Chipping Barnet)

Lloyd, Rt Hon Sir Peter (Fareham)

Loughton, Tim

Chidgey, David

Luff, Peter

Chope, Christopher

Lyell, Rt Hon Sir Nicholas

Clappison, James

MacGregor, Rt Hon John

Clark, Rt Hon Alan (Kensington)

McIntosh, Miss Anne

Clark, Dr Michael (Rayleigh)

MacKay, Andrew

Clarke, Rt Hon Kenneth (Rushcliffe)

Maclean, Rt Hon David

McLoughlin, Patrick

Collins, Tim

Madel, Sir David

Colvin, Michael

Maginnis, Ken

Cormack, Sir Patrick

Malins, Humfrey

Cran, James

Maples, John

Curry, Rt Hon David

Mates, Michael

Davis, Rt Hon David (Haltemprice)

Maude, Rt Hon Francis

Davies, Quentin (Grantham)

Mawhinney, Rt Hon Dr Brian

Day, Stephen

May, Mrs Theresa

Dorrell, Rt Hon Stephen

Merchant, Piers

Duncan, Alan

Michie, Mrs Ray (Argyll & Bute)

Duncan Smith, Iain

Nicholls, Patrick

Emery, Rt Hon Sir Peter

Oaten, Mark

Evans, Nigel

Öpik, Lembit

Ewing, Mrs Margaret

Ottaway, Richard

Faber, David

Page, Richard

Fabricant, Michael

Paice, James

Fallon, Michael

Paterson, Owen

Feam, Ronnie

Prior, David

Forth, Rt Hon Eric

Redwood, Rt Hon John

Foster, Don (Bath)

Rendel, David

Fowler, Rt Hon Sir Norman

Robathan, Andrew

Fox, Dr Liam

Robertson, Laurence (Tewk'b'ry)

Fraser, Christopher

Rowe, Andrew (Faversham)

Gale, Roger

Russell, Bob (Colchester)

Garnier, Edward

St Aubyn, Nick

Gibb, Nick

Sanders, Adrian

Gill, Christopher

Sayeed, Jonathan

Gillan, Mrs Cheryl

Shephard, Rt Hon Mrs Gillian

Goodlad, Rt Hon Alastair

Shepherd, Richard (Aldridge)

Gorman, Mrs Teresa

Simpson, Keith (Mid-Norfolk)

Gray, James

Smyth, Rev Martin (Belfast S)

Green, Damian

Soames, Nicholas

Greenway, John

Spelman, Mrs Caroline

Grieve, Dominic

Spicer, Sir Michael

Gummer, Rt Hon John

Spring, Richard

Hague, Rt Hon William

Stanley, Rt Hon Sir John

Hamilton, Rt Hon Sir Archie

Steen, Anthony

Hammond, Philip

Streeter, Gary

Hancock, Mike

Stunell, Andrew

Harris, Dr Evan

Swayne, Desmond

71

Syms, Robert

Wells, Bowen

Tapsell, Sir Peter

Whitney, Sir Raymond

Taylor, Ian (Esher & Walton)

Whittingdale, John

Taylor, John M (Solihull)

Widdecombe, Rt Hon Miss Ann

Taylor, Matthew (Truro)

Willetts, David

Taylor, Sir Teddy

Willis, Phil

Temple-Morris, Peter

Wilshire, David

Tonge, Dr Jenny

Winterton, Mrs Ann (Congleton)

Tredinnick, David

Winterton, Nicholas (Macclesfield)

Trend, Michael

Woodward, Shaun

Tyler, Paul

Yeo, Tim

Tyrie, Andrew

Young, Rt Hon Sir George

Viggers, Peter

Walter, Robert

Tellers for the Noes:

Wardle, Charles

Mr. Oliver Heald and

Waterson, Nigel

Mr. Malcolm Moss.

TABLE

Allotted day

Proceedings

Time for conclusion of proceedings

First day

Clause 1

7:00 p.m.

Clause 15

10:00 p.m.

Second day

Clause 17

7:00 p.m.

Clause 19

10:00 p.m.

(3) When the Order of the day is read for the House to resolve itself into a Committee on the Bill, the Speaker shall leave the chair without putting any Question and the House shall resolve itself into a Committee forthwith whether or not notice of an instruction to the Committee has been given; and Standing Order No. 66 (Committee of the whole House on bill) shall not apply.
(4) No Motion shall be made as to the order in which proceedings are to be considered in Committee of the whole House.
(5) Standing Order No. 82 (Business Committee) shall not apply in relation to the proceedings to which this paragraph applies.
Standing Committee
2.—(1) The Standing Committee to which the remainder of the Bill is allocated shall report the Bill not later than 23rd July.
(2) The Standing Committee shall have leave to sit twice on the first day on which it shall meet.
(3) Proceedings in the Standing Committee on 23rd July may continue until Ten o'clock whether or not the House is adjourned before that time, and if the House is adjourned before those proceedings have been brought to a conclusion, the Standing Committee shall report the Bill to the House on 24th July.
Report and Third Reading
3.—(1) Proceedings on consideration and Third Reading shall be completed in two allotted days and shall be brought to a conclusion at Ten o'clock on the second of those days.
(2) The Third Reading may be proceeded with at the conclusion of the proceedings on consideration, notwithstanding the practice of the House as to the interval between stages of a Bill brought in on Ways and Means resolutions.
Business Committee
4.—(1) For the purposes of Standing Order No. 82 (Business Committee) paragraph 3 of this Order shall be taken to allot to the proceedings on consideration such part of the allotted days as the Resolution of the Business Committee may determine.
(2) The Business Committee shall report to the House its Resolution as to the proceedings on consideration of the Bill, and as to the allocation of time between those proceedings and proceedings on Third Reading, not later than 25th July.
(3) Any resolution of the Business Committee may be varied by a further Report of the Committee under Standing Order No. 82, whether before or after the date on which the Committee is to report under this paragraph and whether or not that Resolution has been agreed to by the House.
Question accordingly agreed to.
Resolved,
That the following provisions shall apply to the remaining proceedings on the Finance Bill:—
Committee of the whole House
1.—(1) The proceedings in Committee of the whole House shall be completed in two allotted days.
(2) The proceedings to be taken on each of those days shall be as shown in the second column, and shall be brought to a conclusion at the times specified in the third column, of the following Table:—
(4) No Motion shall be made as to the order in which proceedings are to be taken on consideration, but the Resolutions of the Business Committee may include alterations to that order.
Procedure in Standing Committee
5.—(1) At a sitting of the Standing Committee at which any proceedings on the Bill are to be brought to a conclusion under a Resolution of the Business Sub-Committee, the Chairman shall not adjourn the Committee under any Order relating to the sittings of the Committee until those proceedings have been brought to a conclusion.
(2) No Motion shall be made in the Standing Committee relating to the sitting of the Committee except by a Minister of the Crown, and the Chairman shall permit a brief explanatory statement from the Member who moves, and from a Member who opposes, the Motion, and shall then put the Question thereon.
(3) No Motion shall be made as to the order in which proceedings are to be considered in the Standing Committee, but the Resolutions of the Business Sub-Committee may include alterations in that order.
Report of proceedings in Committee
6. On the conclusion of the proceedings in any Committee on the Bill, the Chairman shall report such of the Bill's provisions as were committed (or re-committed) to that Committee to the House without putting any Question.
Dilatory Motions
7. No dilatory Motion with respect to, or in the course of proceedings on, the Bill shall be made in the Standing Committee or on an allotted day except by a Minister of the Crown; and the Question on any such Motion shall be put forthwith.
Exempted business
8. On an allotted day paragraph (1) of Standing Order No. 15 (Exempted business) shall not apply by virtue of paragraph (a) of that paragraph to any proceedings on the Bill after the conclusion of all the proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion on that day.
Private business
9.—(1) Any private business which has been set down for consideration at Seven o'clock on an allotted day shall, instead of being considered as provided by Standing Orders, be considered at the conclusion of the proceedings on the Bill on that day.
(2) Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the proceedings on the Bill or, if those proceedings are concluded before Ten o'clock, for a period equal to the time elapsing between Seven o'clock and the conclusion of those proceedings.
Conclusion of proceedings
10. For the purpose of bringing to a conclusion any proceedings which are to be brought to a conclusion at a time appointed by this Order or a Resolution of the Business Committee or the Business Sub-Committee and which have not previously been brought to a conclusion, the Chairman or the Speaker shall forthwith put the following Questions (but no others)—

(a) any Question already proposed from the Chair;

(b) any Question necessary to bring to a decision a Question so proposed (including, in the case of a new Clause or new Schedule which has been read a second time, whether before the time so appointed or in pursuance of paragraph (a), the Question that the Clause or Schedule, or the Clause or Schedule as amended, be added to the Bill);

(c) the Question on any amendment moved or Motion made by a Minister of the Crown;

(d) any other Question necessary for the disposal of the business to be concluded;

and on a Motion so made for a new Clause or new Schedule, the Chairman or the Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
11.—(1) Proceedings under paragraph 10 of this Order shall not be interrupted under any Standing Order relating to the sittings of the House.
(2) If an allotted day is one on which a Motion for the adjournment of the House under Standing Order No. 24 (Adjournment on specific and important matter that should have urgent consideration) would, apart from this Order, stand over to Seven o'clock and proceedings to which this Order applies have begun before that time—

(a) that Motion shall stand over until the conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion at or before that time;

(b) the bringing to a conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion after that time shall be postponed for a period equal to the duration of the proceedings on that Motion.

(3) If an allotted day is one to which a Motion for the adjournment of the House under Standing Order No. 24 stands over from an earlier day, the bringing to a conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion on that day shall be postponed for a period equal to the duration of the proceedings on that Motion.
Supplemental orders
12.—(1) The proceedings on any Motion made in the House by a Minister of the Crown for varying or supplementing the provisions of this Order (including anything which might have been the subject of a report of the Business Committee or the Business Sub-Committee) shall, if not previously concluded, be brought to a conclusion one hour after they have been commenced.
(2) Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to those proceedings.
(3) If on an allotted day on which any proceedings on the Bill are to be brought to a conclusion at a time appointed by this Order or a Resolution of the Business Committee the House is adjourned, or the sitting is suspended, before that time no notice shall be required of a Motion made at the next sitting by a Minister of the Crown for varying or supplementing the provisions of this Order.
Saving
13. Nothing in this Order or a Resolution of the Business Committee or the Business Sub-Committee shall—

(a) prevent any proceedings to which the Order or Resolution applies from being taken or completed earlier than is required by the Order or Resolution; or

(b) prevent any business (whether on the Bill or not) from being proceeded with on any day after the completion of all such proceedings on the Bill as are to be taken on that day.

Recommittal
14.—(1). References in this Order to proceedings on consideration or proceedings on Third Reading include references to proceedings at those stages respectively, for, on or in consequence of, recommittal.
(2) On an allotted day no debate shall be permitted on any Motion to recommit the Bill (whether as a whole or otherwise), and the Speaker shall put forthwith any Question necessary to dispose of the Motion, including the Question on any amendment moved to the Question.
Interpretation
15. In this Order—
"allotted day" means any day (other than a Friday) on which the Bill is put down as first Government Order of the Day, provided that a Motion for allotting time to the proceedings on the Bill to be taken on that day either has been agreed on a previous day, or is set down for consideration on that day;
"the Bill" means the Finance Bill;
"Resolution of the Business Committee" means a Resolution of the Business Committee as agreed to by the House; and
"Resolution of the Business Sub-Committee" means a Resolution of the Business Sub-Committee as agreed to by the Standing Committee.

Orders of the Day

  National Health Service (Private Finance) Bill [Lords]
  Order for Second Reading read.
  Mr. Deputy Speaker (Sir Alan Haselhurst): I have to announce that the amendment in the name of the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) has not been selected.
  6.48 pm
  The Minister of State, Department of Health (Mr. Alan Milburn): I beg to move, That the Bill be now read a Second time.
  Two weeks ago, I announced the outcome of a review of all the major private finance initiative acute schemes in the national health service. I gave the go-ahead to 14 hospital projects that the Government believe are likely to contribute most to the health care needs of their local communities and proceed most rapidly to an affordable, value-for-money financial close. Those not selected had the right to make representations about the decision and the list cannot be regarded as closed until they have all been considered.
  Prioritisation means that the chosen projects can be expected to reach financial close within the next 18 months. As I have stressed throughout, I shall not hesitate to cancel any contract that fails to deliver on time and on price. However, I am confident that work will be well under way on site by the turn of the decade on each of the pathfinder schemes, which will deliver much needed and long overdue hospitals to communities that have waited too long for them.
  Mr. Simon Hughes: Can the Minister say whether any of the trusts responded to the opportunity to make representations within 10 days and, if so, how many and which ones?
  Mr. Milburn: A number of trusts responded and have made representations. Today is the last day for representations to be received. From memory, I believe that eight or nine responded. Perhaps I can give the hon. Gentleman a list later. That was his first question; I hope that it may also be his last, but I am probably over-optimistic about that.
  The fact that both the national health service and the private sector—banks, contractors and builders—have given such a warm welcome to the Government's announcement speaks for itself. The House must recognise that four or five years of indecision and inaction had sapped confidence in the viability of the PFI. The prioritisation process has helped to secure confidence on all sides. I make no apology for taking decisive action to unlock the PFI gridlock in the national health service.
  Mrs. Gwyneth Dunwoody: I apologise for interrupting my hon. Friend. I will ask just one question. My hon. Friend will know from the disastrous privatisation of the railways that the taxpayer can come a pretty bad second in any of these
  76
  arrangements, particularly in relation to the health service. We want new hospitals to make up for the neglect, but we must ensure that taxpayers will not pay more in the long run than they would have done otherwise, and for an inferior service. Can my hon. Friend assure me that that aspect has been looked at carefully?
  Mr. Milburn: I am grateful for my hon. Friend's comments. I can give her that assurance. Indeed, no PFI scheme will get the go-ahead unless it can demonstrate improved value for money for the taxpayer as well as meeting real strategic health need in local communities. That is the essence of the private finance initiative. I am very pleased to be able to give my hon. Friend that undertaking.
  Mr. Dale Campbell-Savours: May I press my hon. Friend a little further on that? It is a very important issue, as my hon. Friend clearly recognises. Will there be a public sector comparator that we can examine for each project so that we can see what the real figures are?
  Mr. Milburn: As my hon. Friend possibly realises, to date much of the process of the PFI has been shrouded in secrecy, which has helped to devalue the currency of the private finance initiative in the national health service. I am happy to give an undertaking that in future the public sector comparator will be published at the appropriate time so that hon. Members and, indeed, local communities can better judge for themselves the content of PFI schemes and make sure that they mean improved value for money for the taxpayer.
  Mr. Campbell-Savours: May I press my hon. Friend once again on that matter? I am pleased to hear those responses, which I am sure will be very reassuring. Of the schemes that are proceeding, can we assume that at some stage—perhaps my hon. Friend can say at what stage—information will surface to show that they are more economic in terms of the public sector comparator?
  Mr. Milburn: That is indeed the case. When the final transactions are concluded on the 14 deals—if 14 there are, bearing in mind the representations—we shall make information publicly available to demonstrate the very point that I have just made: that they do indeed make more economic sense from the point of view of the national health service.
  Mr. Michael Jack: I am grateful to the Minister for giving way so early. He criticised the past four to five years as a period of inactivity due to problems with the private finance initiative. Before the end of the Second Reading debate, will he tell us how many district general hospitals valued at, say, £25 million or above were completed in each of the past five years?
  Mr. Milburn: I will endeavour to provide that information for the right hon. Gentleman.
  Mr. Simon Hughes: The logical question which follows that asked by the hon. Member for Workington (Mr. Campbell-Savours) is whether the Minister will also publish the criteria for what in shorthand was called the PFI ability. If we are to have comparators, we also have

  77
  to know whether, for example, value for money is measured over 25 or 50 years and whether to take into account the cost of borrowing and payback; we also need to take into account the certainty of the use of the building and the variability of the demand for a particular service.
  Mr. Milburn: All of those are extremely reasonable points. As I understand it, information has already been placed in the Library. Indeed, I wrote to all hon. Members on both sides of the House acquainting them with the prioritisation exercise, the criteria and the assessments that were undertaken. It has been a very open and very fair process. I shall, of course, endeavour to ensure that appropriate information is made available.
  Perhaps one point about which I can assure the hon. Gentleman and some of my hon. Friends is that the PFI represents a good deal on major acute hospital schemes precisely because it includes not just the building of the hospital but the maintenance over the life of the contract. We all know from experience in our own communities the horrendous maintenance backlog that has built up, particularly during the course of the past 18 years. The PFI offers an opportunity not just to have up-to-date hospitals now but to have up-to-date hospitals in five, 10, 15, 20 and 25 years' time. That will be a real boon for the national health service.
  I make no apology for taking that decisive action, but I realise that it has left some trusts and, indeed, some colleagues very disappointed. I can understand their concerns. Perhaps the most shocking thing that I found during my many meetings with colleagues on both sides of the House in the lead-up to the prioritisation announcement was the evidence that they brought with them of the appalling physical state of their local hospital buildings. Years of neglect have contributed to a considerable backlog of restoration and replacement work. Unless we act now, we shall face a real danger that the 21st-century NHS will be operating out of hospitals built in the 19th century.
  Mr. Simon Hughes: I shall try to limit myself after this to one more intervention.
  The Minister is right. Will he give his Department's estimate of the capital repairs and maintenance backlog? Will he also tell us whether the Government are continuing to sustain the Tory Government's 16 per cent. capital reduction in public funding this year, and what the capital reduction will be next year and the year after?
  Mr. Milburn: From memory, I think that the estimated backlog in repairs, from the Department's point of view, amounts to about £2 billion. We shall consider capital and revenue allocations in the light of my right hon. Friend the Chancellor's recent Budget announcement allocating a further £1.2 billion for the national health service. Before the hon. Gentleman gets too smug about this, I note that in the Liberal Democrat manifesto the Liberals were talking about putting an extra £500 million into the national health service. We have already trumped that figure. Indeed, we have doubled it.
  As I have said, unless we act now, we shall face the very real danger that the NHS of the 21st century will be operating out of hospitals built in the 19th century. That is why the Government have acted to get the hospital building programme moving. The announcement that
  78
  I made two weeks ago is just the first wave of new hospitals for the next century. I intend to make a further announcement about the second wave in spring next year. The second wave will be based on assessments made by NHS regional offices of the health service need for large capital development projects in their areas.
  In other words, in future it will no longer be the whims of the market that drive hospital building; it will be the needs of patients. No more, no less. As the party that created the national health service and, indeed, first advocated public-private partnerships to improve investment in public services, it is our duty to make the PFI deliver the goods for the benefit of all patients. Now that we have a sensible number of projects in play, we must ensure that they reach financial close without too much delay. That is the purpose of the Bill.
  The Bill makes it clear that NHS trusts have the power to enter into PFI contracts so that the financial community can have the confidence that it needs to provide funding for the most advanced hospital development projects. The Bill should also be seen as another important step in our programme to develop new forms of public-private partnership, of which the PFI is one model. The NHS needs high-quality facilities to deliver world-class services. The PFI undoubtedly has the potential to provide those facilities, but despite all the promises of jam tomorrow, not one major hospital has been built through the PFI since the initiative was first launched in 1992.
  In theory, under the PFI the public sector does not pay to build a hospital; it pays for the delivery of a specified service to agreed quality standards. No payment is made until the new facility is ready, and any diminution in service standards can lead to a reduction in payments. So far, so good. Unfortunately, however, the PFI in the NHS has never left the drawing board. Some small schemes have been brought to fruition—car parks, accommodation blocks and so on—but the urgently needed major hospital building programme has been stopped dead in its tracks.
  Mr. George Stevenson: I am concerned about the interface between smaller and larger schemes. I am sure that most of us welcome my hon. Friend's initiative, but can he give us some assurances about smaller schemes, which are as important to the community as larger schemes? A smaller scheme in my constituency of £1 million has been held up over the past four years. It is in the hands of the West Midlands regional executive committee. No progress has been made.
  Mr. Milburn: I shall be announcing in due course what progress we intend to make with smaller schemes. If the scheme to which my hon. Friend refers involves less than £1 million, it is within the powers of the individual trust to make progress with it. If it is not doing so, I suggest that he takes up the issue with the local trust management. If my hon. Friend wishes, I shall be happy to look into the issue that he has raised.
  Smaller schemes have not been the problem, but little initiative has been forthcoming to provide for urgently needed major hospitals. Time has been wasted in wrestling with apparently insurmountable problems, and £30 million that might have been better spent on direct patient care has been used by NHS trusts on legal, financial and other consultancy fees without one major

  79
  contract being secured. There is always a steep learning curve when initiatives are introduced and tested, and it costs money to obtain expert help. In reality, however, the record of the past few years has been appalling. To expend such a level of public money without one positive result is an unenviable record.
  Mr. Chris Pond: My constituents and my hon. Friend the Member for Dartford (Dr. Stoate) will be emphasising the fact that they have waited for years, notwithstanding promises, for a new district hospital. It is only now that the initiative is being put into place. One of the difficulties, as my hon. Friend will accept, is that in such lengthy processes, and despite all the expenditure on consultants, we may end up with hospitals that may not fully meet the needs of the districts that they are designed to serve.
  In the health district within my constituency there are about 500 beds. Every general practitioner in the district considers that provision to be inadequate. With the PFI project negotiated by my hon. Friend's predecessors, who tried to rush the contract through, the proposal amounts to only 400 beds. In the longer term, shall we see measures to ensure that contracts meet the health needs of the districts in which they are to operate? I ask that question while very much welcoming the PFI proposal for Dartford and Gravesham.
  Mr. Milburn: I know that my hon. Friend is an advocate of the proposed new hospital in his constituency. He has been lobbying consistently for progress to be made. I would expect that all health authorities would continue to ensure that PFI projects in their areas, once under way, met local health service requirements. I would expect especially that in the annual contracting round the issue of the number of NHS beds available in any hospital, whether publicly funded or funded through the PFI, would be properly taken into account when commissioners were reaching financial agreements with providers of services.
  Mr. Simon Hughes rose
  Mr. Milburn: The hon. Gentleman wishes to intervene again. I have given him a couple of cracks of the whip already and I know that he will make a long speech. He has also tabled a large number of amendments. I therefore ask him to hold his horses for a moment or two.
  The Government draw no pleasure from the fact that the previous Administration were unable to make the PFI work in the NHS. The real losers—those who suffered most—were the patients in need of treatment and the doctors, nurses and other health professionals who had to work in inadequate facilities. They are why we gave our manifesto commitment to overcome the problems that have plagued the PFI in health, and we are honouring that commitment.
  My hon. Friend the Paymaster General commissioned a rapid review of the PFI across Government, and he has accepted all the recommendations contained in Malcolm Bates's report. My hon. Friend has already announced the creation of a new Treasury private finance task force, which will focus on the quality of PFI transactions. Its
  80
  tasks will include helping central Government Departments and agencies to road-test significant projects for commercial viability before procurement begins. My Department looks forward to working with the task force to deliver real improvements to the NHS-PFI programme in future.
  To complement that work, we are undertaking an overall review of the workings of the PFI in health. We are committed to end delays, to sort out confusion and to develop new forms of public-private partnership that work better and protect the interests of the NHS. The review will help us to secure the market, improve the process and develop the project. We shall be listening to the views of both public and private sectors. The objective will be to identify how to make the best use of skills and expertise from both sectors for the benefit of patients.
  The proposed legislation before us will remove the most significant obstacle in the way of pathfinding schemes. There is no lack of support or interest in the financial community for the PFI in health. Banks are concerned, however, that there is some doubt about whether NHS trusts can enter into PFI contracts. Our legal advice is that the National Health Service and Community Care Act 1990, which sets out trust powers, provides the power for entry into PFI contracts. At the same time, the PFI is obviously not explicitly referred to in the 1990 Act. Banks remain concerned that they may not be able to recover their money if, at some stage in the future, PFI contracts are found to be ultra vires for the trust. The banks have been chastened by their problems in other sectors and are unwilling to take what they perceive to be an excessive and unnecessary risk without further legislative cover. The possibility of a statutory instrument has already been explored, but it is clear that that would not resolve their concerns.
  In those circumstances, primary legislation is necessary, and the Bill removes any doubt about the power of an NHS trust to enter into contracts under the PFI. The banks concerned with the leading projects, including the one in Dartford, have seen and agreed the wording of the Bill. They have made it clear that the wording satisfies all their outstanding concerns. As a result, they will be prepared to lend into the leading schemes once the Bill is enacted. We believe that the legislation will also provide security and confidence to enable successor schemes to reach financial close without hindrance.
  Clause 1 provides that the powers of an NHS trust include the ability to enter into agreements certified by the Secretary of State as externally financed development agreements, and specifies the circumstances in which the Secretary of State may give a certificate to that effect. In practice, we expect all but the very lowest value contracts to be certified. Individual trusts have thresholds below which they can approve schemes without reference to the Secretary of State. There are three different levels of threshold, which are set in relation to the turnover of the trust. Rather than state an absolute de minimis limit for certification, we propose that contracts whose value is below the trust's delegated limit will not be certified. We shall make that requirement clear in guidance.
  Clause 1(6) of the Bill makes it clear that the validity of such contracts—indeed, any contracts made by NHS trusts in the past, now or in the future—will in no way be affected by the lack of a certificate: they will stand or fall

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  on their merits. We know from experience that there has largely been no problem in funding smaller schemes; it is the major, acute schemes that have encountered problems.
  Clause 2 allows any corresponding provision made by Order in Council in respect of Northern Ireland to be subject to the negative resolution procedure.
  It will be apparent from the brevity of the Bill that this legislation is straightforward and uncomplicated.
  Mr. Simon Hughes rose
  Mr. Milburn: I know that the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) does not think so, but he must wait his turn.
  The Bill fulfils a manifesto commitment, and its purpose is transparent: to remove any doubt about the power of an NHS trust to enter into contracts under the PFI.
  When the Bill was considered in the other place, a number of amendments were tabled, but were subsequently withdrawn following clarification by my noble Friend Baroness Jay of Paddington. One amendment, however, was accepted, as we agreed that it improved the comprehensibility of the Bill without detracting from the achievement of its objective. The amendment substituted a new subsection (6) in clause 1, which broadens the scope of the original subsection. The provision is in much shorter and simpler terms than its predecessor. It was a victory for plain English, and those are few and far between in the House.
  It is fair to say that there was underlying support for the Bill from all quarters, but one issue of contention arose over the question of services in PFI deals. Concern was expressed that clinical services might be included in a PFI deal. That certainly was the case under the previous Administration, but not under this Government: indeed, it is our stated manifesto policy that clinical services are excluded from the PFI.
  However, we have acknowledged that there is a continuing debate about some of the grey areas, especially the definitions of so-called clinical support services, and we have said that that will be addressed as part of the wider review of the PFI in health that is under way. It is obviously essential to consult widely on such a sensitive issue before decisions are made. Any schemes proposed before the review is complete will be considered case by case. Projects will not be allowed to proceed if they transfer to the private sector categories of services that Ministers believe, in the interests of the health service, should be provided directly by NHS bodies.
  By the end of the year, once the review is complete, we shall have a categorical statement of what may or may not be included in the PFI. I do not propose to anticipate the detail of that review, but I am pleased to be able to repeat for the benefit of hon. Members an assurance given by my hon. Friend in the other place that pathology and radiology services will be excluded from the PFI. I know that there will be other services about which hon. Members will want similar assurances, but I believe strongly that the review should be conducted before conclusions are drawn. Our commitments on pathology and radiology are given in response to specific issues that have been raised during the passage of the Bill, and to act as a signpost for the future.
  82
  It is important that in the future the interests of employees are properly taken into account as they, too, are significant stakeholders in the national health service.
  Lest there be any confusion, I should like to take the opportunity to remove any other doubts about the Government's intentions on the NHS. We will renew the health service. We will tackle bureaucracy and we will replace the internal market. We will do that not behind closed doors, but in a constructive and open partnership with all those who care about the service: the patients who use it and the community health councils that represent them, the clinicians who provide the service, the managers and other staff who support it and the taxpayers who pay for it. Above all, the NHS under this Government will remain a truly national health service, available to all on the basis of clinical need.
  Two weeks ago my right hon. Friend the Chancellor of the Exchequer gave a massive boost to everyone who cares about the NHS by announcing an extra £1.2 billion for patient care. As a result of prioritising major acute schemes, we have also been able to secure the largest new hospital building programme in the history of the NHS. The programme is worth around £1.3 billion. Taken together, those undertakings represent an extra £2.5 billion to take forward the modernisation of the health service.
  It is clear that we are putting the people's priorities first. We are determined to get hospitals built, rather than just talk about them being built. Not one hospital planned under the PFI has yet got off the drawing board. I am determined to put that right. By enacting this legislation, we shall be able to start constructing the new facilities that the NHS so badly needs. We gave a manifesto commitment to sort out the mess in which the PFI had been left, and we are delivering on that commitment. This is a practical, essential and simple measure and I commend it to the House.
  7.15 pm
  Mr. John Maples: I must, first, deal with the Minister's imaginative arithmetic. Of the £1.2 billion, only £1 billion is for England. That represents a lower real increase in spending than the increase that the previous Government proposed for this year. During his speech, we discovered that it also includes next year's capital spending. When asked by the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) whether public capital would be available for some of those projects, the Minister said that he was considering how much of that £1 billion would be available.
  Mr. Milburn: Will the hon. Gentleman remind the House how much his Government had allocated for the national health service next year?
  Mr. Maples: We would have proposed a settlement similar to this year's. As the Minister knows, the figure for this year is £1.6 billion, and it does not include capital spending—almost all of it is for hospital spending. If the Government can match our spending record over the past 18 years, why do they not commit themselves to doing so?
  At Health questions three weeks ago, I invited the Secretary of State to say whether he would match the 3.1 per cent. a year real increase in spending over the past

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  18 years, but he declined to do so. He might like to take this opportunity to do so, but I doubt that he will because he knows how difficult that would be. The Government will certainly not match it next year.
  The Secretary of State for Health (Mr. Frank Dobson): Would the shadow Secretary of State care to give us the average real increase for the past three years?
  Mr. Maples: I am talking about a long-term average: the Secretary of State keeps referring to long-term plans. He picks three years because four years ago the figure was 5.9 per cent., and he conveniently wants to leave that year out. If he chose four years, the average would be extremely good. We can all play with numbers, and he deliberately picks three years because it leaves out an almost 6 per cent. real increase in spending in the previous year. He refuses to commit the Government, who have had 18 years to think about what they will do with the national health service. He has spent all that time criticising the previous Government, yet he refuses to commit himself to bettering our spending record.
  It is not our intention to oppose the Bill: it is our Bill, and had the election been called 10 days later, it would have been introduced by Conservative Ministers. We intend to try to amend it, and to use those amendments to explore the Government's thinking, because the PFI involves some complex issues. We and many people outside the House want to be clear about what is involved.
  The Minister is clearly an enthusiast of the private finance initiative, but his enthusiasm was not, until recently, shared by many in his party. One must be careful when using the word "hypocrisy" in the House. It certainly does not apply to the Minister, but this is a massive exercise in collective hypocrisy by the Labour party. It says one thing in opposition and does another in government.
  My right hon. Friend the Member for Fylde (Mr. Jack) and I plan to have a little section high on the menu of health debates entitled "words for eating" to remind Labour Members what they were saying until a few weeks ago.
  Ms Bridget Prentice: Oh no, this is the same speech as the hon. Gentleman made three weeks ago.
  Mr. Maples: No, these are different words for eating. We have a large residue of quotations; we shall mine this seam for some time to come.
  The Financial Times of 11 April referred to the private finance initiative, and we were told that
  "The move marks Labour's final conversion to using the PR in the NHS after years of warning that the government's plans to have the private sector design, build, finance and operate hospitals were merely a front for privatisation."
  When she was shadow Secretary of State for Health, the Secretary of State for Social Security, the right hon. Member for Camberwell and Peckham (Ms Harman), said—as recently as April last year—
  "The Tories have made NHS hospitals reliant on private finance … a policy strongly opposed by Labour."
  A few weeks earlier, the right hon. Lady had said:
  "The latest scheme for privatising the NHS is the Private Finance Initiative."
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  When asked a couple of weeks earlier by the BBC whether she objected to the use of the PFI for building hospitals, the right hon. Lady had replied:
  "Well we certainly do, because under this Government this is a new trick to privatise the health service … they're using the PR as a raft for, a sort of ramp for privatising the NHS."
  All that was said only a few months ago. The right hon. Lady's predecessor, the President of the Board of Trade and Secretary of State for Trade and Industry, the right hon. Member for Derby, South (Mrs. Beckett), said:
  "Market testing represents creeping privatisation; as does the PFI."
  Mr. Campbell-Savours: If there were reservations about the PFI—
  Mr. Maples: And there were.
  Mr. Campbell-Savours: Yes, there should be no doubt that some of us had reservations because of a PFI project that had been approved in 1988, under a Conservative Government. That was the Dartford River Crossing plc project, and the Opposition—as they now are—would do well to consider it. Under privately financed options, the cost was to be £234 million; under publicly financed options, it was to be £180 million. The additional cost arising from the PFI was £54 million. When Labour was elected, it had to find a way of ensuring that penal costs of that nature did not fall on the taxpayer. That is what the Labour Government have done, and that is why the PFI is now so much more acceptable.
  Mr. Maples: The quotations that I have given do not express reservations; they anathematise the whole process, describing it as privatisation of the national health service. The hon. Gentleman should have addressed himself to the point that I was making—but, of course, he is not the only person not to do so.
  As ever when we are mining these seams of words, the Secretary of State for Health features largely. He was on to the subject a long time ago. In 1986, when he was the Opposition's deputy health spokesman, he said—he has, very decently, changed his views since then; I suspect that he held his earlier views until he was given his present job and realised the magnitude of the task in front of him—that a similar proposal was
  "quite unacceptable to the forthcoming Labour Government and that any such arrangements entered into now will be terminated by that Government."
  Mr. Dobson: The hon. Gentleman is suggesting that my letter, from which he has quoted, referred to the PFI. The PFI was invented by the then Government in 1992; the letter was written in 1986. Will the hon. Gentleman tell the House what my letter was actually about?
  Mr. Maples: The right hon. Gentleman's letter was about a private-public partnership for the building of a psychiatric hospital on the site of the Queen Elizabeth hospital in Birmingham. He was anathematising such private-public partnerships. That is not entirely surprising, because we know what the right hon. Gentleman thinks of business men. Only four or five years ago, he described them as
  "stinking, lousy, thieving, incompetent scum".

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  Presumably, those are the people whom the right hon. Gentleman is now trying to charm into becoming involved in private-public partnerships.
  Mr. Dobson: May I put the record straight again? If the hon. Gentleman is always going to quote from The Sun, his quotations may not always be accurate. If he looks at other newspapers, he will find that most of that abuse was directed at the Tory Government. To the extent that it was directed at business people, it was directed at millionaires who paid poverty wages. What does the hon. Gentleman call such people?
  Mr. Maples: I think that what the right hon. Gentleman said applied more widely than that. I must say that it is interesting to note how slow he is to catch up with the Labour party's new orthodoxy. I thought that The Sun was now a reliable source of information on political issues. So it has suddenly become unreliable, has it?
  Mr. Charles Clarke: Will the hon. Gentleman tell us how much money was raised from privatisations and oil revenues during the 18 years of Conservative government? How much of that money was given away in tax handouts and social security benefits to deal with high unemployment, and how much was invested to deal with public needs? Does he not concede that the reason for the PFI is the need to invest in the public sector, because his Government threw away and squandered public resources?
  Mr. Maples: I agree that the PFI is needed for investment in the public sector. That is why the last Conservative Government invented the idea.
  A 1995 Labour party policy document on the NHS, interestingly entitled "Reviewing the NHS"—that seems to be what Labour seems to spend most of its time doing with the NHS—described the PFI as "creeping privatisation", and I must say that we saw a little of that hostility to it on the Government Benches this afternoon. The document does, however, show how far we have come, how soon reality breaks in on a Government, how quickly our policy has become Labour policy, how soon history is rewritten—
  Mr. John Gunnell: Will the hon. Gentleman give way?
  Mr. Maples: No, I would like to make a little progress. I have given way an awful lot.
  The document also shows how far Labour is willing to take the policy. It was described to us as commercialisation of the health service, but it appears that the Secretary of State plans the ultimate in commercialisation, although he may choose to deny it. According to the 9 July issue of BMA News Review, as part of the celebrations of the 50th anniversary of the NHS,
  "Supermarkets will be allowed to print the NHS logo on carrier bags under government plans".
  "Expressions of interest" have been invited
  "from Safeway, Kwik Save, Boots"—
  [Interruption.] It is from BMA News Review. I do not know whether it is true, but if it is, we will take no more lectures on commercialisation or privatisation from Labour Members.
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  Let me now turn to the policy that is under discussion. Let us look at the Conservative record on that policy. Notwithstanding what the Minister said, it is fair to remind the House that it was invented by a Conservative Government, who had two aims: first, to relieve pressure on public spending, which, as we all know and as the Labour Government are discovering, is infinite and difficult to meet, and to achieve better solutions. Our second purpose, which should not be ignored, was to find local, entrepreneurial, imaginative solutions to local problems, to encourage local trust managers to come up with those solutions, to—if I may use the jargon—let a thousand flowers bloom.
  Mr. Stevenson: Will the hon. Gentleman give way?
  Mr. Maples: No, I will not.
  That was based on the realisation that central planning from the top in Whitehall has not worked in the health service. The man in Richmond house does not know best. He cannot know the best way to run pathology services in Nottingham, and canteens and car parks in Chester; but there is a good chance that local managers in those areas do, and may have some original ideas. There is a possibility of better, more efficient solutions, not just financial but medical.
  Mr. Stevenson: Will the hon. Gentleman give way?
  Mr. Maples: I would like to get this section of my speech out of the way. I have given way an awful lot so far.
  There is a possibility of such novel, imaginative local solutions to problems large and small, from building car parks to building hospitals. The NHS executive guidance published in 1993—shortly after the PFI became an option for the NHS—stated:
  "The additional scope for using private capital in the NHS will mean additional resources for health care. We must aim to use the new arrangements to benefit patients to the greatest extent, either through provision of services to patients or by finding more efficient ways of providing support services."
  It was never a leasing arrangement; it was never just a piece of financial engineering. It was about efficiency and effectiveness in the provision of services.
  Mr. Gunnell: Will the hon. Gentleman give way?
  Mr. Maples: I want to finish this section of my speech.
  An answer to a parliamentary question reveals that, by January this year, 32 PFI schemes worth over £1 million each had been completed and put into operation. By June this year—according to a parliamentary answer given by the Minister himself, obviously referring to the years before he was responsible for policy—61 projects worth over £1 million had full business case approval, to a total value of £800 million, and 151 had outline business case approval, to a total value of nearly £3 billion. Twenty-five PFI schemes for new hospitals had reached preferred bidder stage, five had full business case approval and one had been signed in November 1996.
  When Labour rubbishes our record and talks about five years of indecision, let us remember the truth. This is our policy. It was, I remind the House, introduced in the teeth of Labour opposition. Many projects had already been

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  successfully completed, and many more were in the pipeline. The Minister was able to give the go-ahead to 14 projects two weeks ago because we got the projects to that stage. If it were not for us, there would be no private finance initiative and no new hospitals being built in Norwich or Dartford.
  Mr. Gunnell: Would the hon. Gentleman like to comment on the grand announcement made on 29 January last year by the then Minister, the hon. Member for Orpington (Mr. Horam), of a £50 million scheme at St. James's hospital in Leeds? Not surprisingly, the scheme has not been approved as one of the 14 that can go ahead. People at the hospital accept that the scheme cannot go ahead. Despite all the trumpeting, the scheme cannot go ahead. I was told that the hospital would present a better scheme than the one that was announced so grandly. The Conservative Administration's PFI mechanisms were ineffective and did not result in the major developments that they wanted. There was a residual liabilities measure to clear up the mess, but my right hon. Friend the Minister had to introduce another Bill to make it clear that companies should adhere to their agreements.
  Mr. Deputy Speaker: Order. Interventions should not be speeches.
  Mr. Maples: Hon. Members seem to want to make bits of their speeches in the middle of mine. Perhaps they would do me the courtesy of waiting.
  I have given the figures on our achievements under the PFI. It has been said that there is a steep learning curve for such new approaches. I gather that there were particular and specific problems with the Leeds project. No doubt the hon. Gentleman is making representations to the Minister about it and I am glad that he is able to do that.
  Mr. David Rendel: The hon. Gentleman seems to think that that is a specific case. Will he comment on the Royal Berkshire trust and the priority care trust in Newbury, both of which were ready to go ahead with new hospital buildings before the PFI scheme started? Both were delayed under the PFI scheme and neither has gone ahead. The Royal Berkshire has now decided that it cannot proceed under the private finance initiative.
  Mr. Maples: I do not know the details of that scheme and cannot comment on it. In case it has escaped the hon. Gentleman's notice, perhaps I should tell him that I am the Opposition spokesman on this subject and not the Minister who answers questions about it.
  I am delighted that Labour has converted to the PFI and that 14 schemes will proceed. Of course, two of those were signed by us and several of the others have full business case approval. The Minister spoke about a £1.3 billion scheme, but there is no guarantee that the 12 projects or the two that have been signed for will be built. He spoke about work being under way on them by the end of the decade. Therefore, there is still a period of uncertainty.
  The Minister heralded the hospital building programme as the biggest ever announced, but it is the biggest cancellation of such a programme that has ever been
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  announced because 23 schemes were cancelled. The Minister's stance has changed somewhat, because on 10 June he said that schemes that failed to make the list, for whatever reason, would be invited to stop any further work, decline any tenders they had and stand down preferred partners. The projects would then be considered nationally alongside schemes that were competing for limited public sector capital.
  In his announcement, the Minister hinted that successful schemes either would go forward in the second wave of new model PFI projects or would compete for public sector capital. Today, he went further and said that he had invited comments on the projects and was considering specifically whether they could be taken forward in a new wave of PFI projects next year. I shall be delighted if that proves possible. There is no need to stand all these projects down just because they have not made the cut on his first assessment and first decision. If they stand down their proposals and partners and stop work, it will be extremely difficult to get them going again. I am prepared to bet that they would be unlikely to start again and if they are stood down, even temporarily, those 23 places will not get new hospitals under Labour.
  The redevelopment of Walsgrave hospital in Coventry is one of the 23 schemes. It serves my constituency and is an important acute hospital and a regional tertiary referral centre. It is important to us that the project should be allowed to see whether it can reach the criteria.
  Labour's view of the PFI is rather like its view of the management of the health service, and that is where it differs so much from us. Labour sees the health service being run from the top down rather than from the bottom up. It is not interested in local solutions or local entrepreneurship. The advice to those who run trusts is, "Do not bother thinking up original ways to do things because if they do not fit Ministers' concepts of health service need, you can forget it." Matters are dictated by Ministers' views of health service need, which is an appalling way to attempt to motivate local trusts and health authorities. [Interruption.]
  The evidence lies in what the Minister said. He said that matters were prioritised solely on the basis of health service need and that that would be his criterion for the future. That is not the way to motivate local trusts and health authorities to come up with solutions to local problems. Apparently, health service need will be determined in Richmond house and not in Camden, Darlington or Warwick. That is a mistake, but it is symptomatic of the Government's approach.
  The Government plan to scrap the internal market, fundholding and internal competition, and propose to replace them with heavy central planning and some local consensus designed to involve people but which is unlikely to give them any power to go with their responsibility. That is a giant step backwards. It did not work before and it will not work this time. There will be a massive loss of efficiency and effectiveness and reduced cost control, and it will abolish local incentives to try to find different ways of doing things. I am worried that Labour views the initiative as a way of financing buildings and not as a way of seeking new ways to provide services. It sees it as a method of getting round public spending constraints.

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  On 10 June, the Minister spoke about concentrating resources on schemes that have high health service need. He intends to abandon the "thousand flowers" approach and adopt an approach in which health service need dictates new capital investment. That confirms my fear.
  Mr. Stevenson: What is wrong with that?
  Mr. Maples: Part of the purpose of the PFI, which we introduced, was to encourage local trusts and health authorities to come up with imaginative local solutions to their problems. If the programme is dictated by the Government's assessment of health service need, that will not happen.
  Mr. Campbell-Savours rose—
  Mr. Gunnell rose—
  Mr. Maples: I have already given way to both hon. Members, who made extremely long speeches in the middle of mine. Hon. Members have until 10 o'clock to make speeches.
  It is not necessary to concentrate PFI resources because they are not limited like public sector capital. As I have said, that will not work because it did not work before. That is why we introduced the PFI. There must be incentives for local trusts and managers, and the message to health authorities and trusts from the Government's decision is depressing. It is that the man in Whitehall, in Richmond house, knows best.
  A recent survey by the NHS confederation showed that, unsurprisingly, managers want more autonomy. Some 62 per cent. of them wanted more autonomy to manage local services and about 60 per cent. said that new alliances with the private and voluntary sector should be pursued. The people who manage the NHS are, apparently, to be ignored. Their views are to be of no significance when compared with the assessment of health service need by Ministers and civil servants.
  Over the next two or three years, this issue will be the battleground on the NHS. The Government plan to reimpose central planning and control in place of the local diversity and management that we began to introduce. Management will lose incentives to improve efficiency and control costs and to respond directly to patient need and choice. The health service will lose efficiency and effectiveness, medically and financially, and managers will lose the incentive to manage creatively and respond to local need, which is what they want to do.
  The evidence is on our side. GP fundholders have made improvements to their practices and to the quality of their services. There have been improvements in meeting the patients charter standards and there has been increased efficiency and cost savings. All those matters have improved the response to patient need and the quality and quantity of health care. The Government are adopting methods that did not work in the past and will not work in future. Unless they are prepared to spend much more, fewer patients will be treated, there will be lower capital investment, higher costs, lower responsiveness and longer waiting lists. We shall make those matters the test of their policy because they will not match our record on spending. Their planned reforms will not match our record on efficiency and the outcome will therefore be worse.
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  I invite the Minister to reply today or in Committee to two specific questions on the PFI, about which we have tabled amendments. The first is the criteria that will be used. He said that he had published those with his statement on, I think, 3 July, but they were outline and sketchy criteria. We need much more detail to understand and to evaluate how he plans to operate the policy.
  In a speech in early June, the Minister criticised us for not publishing enough information. He said that there would be
  "no attempt to conceal any information",
  and promised, if I may put it like that, to provide as much information as possible. I invite him to do that. It is not just us who want that. Those submitting the schemes and those who monitor and manage the health service would like that information too, so I hope that he will provide it.
  I hope that the Minister will deal with the issue of risk. What are the criteria on risk transfer? If there is no risk transfer, it is simply a leasing operation—just financial engineering. Risk transfer is vital, because without it the process will be the same as borrowing, but more expensive because the Treasury can probably borrow more cheaply than private sector schemes. Problems will be created for the future because the health service will be committed simply to a long stream of payments, rather than such expenditure counting as public sector capital spending.
  There must be some genuine transfer of risk. I am sure that the Minister accepts that. It was mentioned in all the PFI documents, both before and after the election, but we need to know what the criteria are. What are the quantitative hurdles that have to be met? Off-balance-sheet financing has caused much trouble in the private sector and we would not want that to happen in the public sector. Of course, if it did, it would cause problems for future NHS spending.
  The Department of the Environment, Transport and the Regions has issued a note calling for a 20 per cent. financial risk transfer. Some early Treasury documents called for a 30 per cent. transfer. At the moment, there does not seem to be any clear guideline on that, so I should be grateful if the Minister would deal with it.
  The second subject that I invite the Minister to address is clinical services. He said that he was considering the subject and that he would return to it in the House. The question of what services can be included is important. The greater the service element, the greater the potential for real risk transfer. Paragraph 14 of the Treasury's review, which it commissioned from Malcolm Bates and which was published a few weeks ago, states:
  "Departments should ensure there is a significant level of service content in their transactions, consistent with protection of the public interest.
  Service content is important. Departments should avoid de facto asset procurement. Government's ultimate interest is in the service delivered from an asset not the nature of the asset itself."
  I am sure that the Minister agrees.
  Our approach was a local one. We were prepared to consider a wide range of different arrangements. My right hon. Friend the Member for Charnwood (Mr. Dorrell), the previous Secretary of State for Health, made it clear that he was reluctant about clinical services in any way being subjected to privatisation, but he did say that he would consider non-NHS involvement if local clinicians favoured that. The Minister should be prepared to consider as wide a list as possible.

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  The Government would have a problem in drawing up a list because technology and medical practice are changing. Some criteria need to be established, although we will have to allow the Government some latitude and ask them to explain each decision. However, they would be making a mistake if they boxed themselves in. I am surprised and disappointed that they have already ruled out X-ray and pathology services.
  There is a danger for the Government—as they would no doubt say there was for us in this—in getting hung up on ideology. The NHS buys in an enormous number of things from the private sector and private sector employees. It buys in all its drugs, all its supplies and quite a lot of waiting-list surgery. An answer to a parliamentary question in January contained a figure that surprised me: expenditure on the purchase of health care from non-NHS providers in England for 1995–96 amounted to £800 million. We are talking about operations and procedures—[Interruption.] Does the hon. Member for Workington (Mr. Campbell-Savours) want to intervene? He keeps talking. If he wants to intervene, I will let him, as long as he will then be quiet.
  Mr. Campbell-Savours: I will intervene. I was saying to my hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson) that, before the election, we had tremendous difficulty getting Conservative Members to talk openly about clinical services being included. Indeed, I remember an interview between Jeremy Paxman and the then Secretary of State for Health, in which Mr. Paxman dragged the words out at the very end of the interview, and the then Secretary of State looked extremely embarrassed. Opposition spokesmen now liberally talk about these matters. It was obvious that they were trying to avoid telling the truth to the electorate before the election.
  Mr. Maples: My right hon. Friend the previous Secretary of State said in a 1995 Department of Health press notice that
  "there is no question of clinical staff or clinical support staff being employed by non-NHS employers unless such a change has the agreement of local clinicians."
  The hon. Gentleman is making a phoney point, and he knows it.
  We should not get hung up on ideology, and I mean that in a genuine and constructive spirit of trying to ensure that the PFI achieves its potential. We already buy in an enormous amount from the private sector. I gave the figure of £800 million-worth of health care, not drugs and supplies, being bought in from the non-NHS sector. That was 4 per cent. of hospital and community health service spending in that year, which is not an insignificant amount.
  We should be careful about saying that there is some ideological barrier about clinical support services. There is a possibility of gaining valuable advances in quality and quantity of service by subjecting such services to PFI treatment. Even by that test, the average GP's practice would fail because most of them are small private businesses that have independent contracts with the NHS. GPs' properties are not owned by the NHS and GPs are not employed by it, so do not let us get hung up on definitions because ultimately the only criterion should be what is best for patients.
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  Perhaps the best way to run a pathology service in a big city is through one concentrated facility, used by all hospitals, both public and private. If so, why not allow someone to build, finance and run it privately? Some capital spending projects may not qualify for the PFI without some service inclusion. A study by Meara Management Consultancy for the Institute of Health Services Management states:
  "Small schemes, particularly those in the elderly and mental health care fields, may only succeed if clinical services are included in the FM"—
  financial management—
  "package."
  What exactly is Labour's policy? Is there an ideological dimension? Are there some no-go areas, even if local clinicians agree to such a package, or are the Government open to a range of proposals and possibilities? Our amendments are designed to explore that.
  The PFI offers great scope for improving health services without increasing public spending, but if the PFI projects merely replicate what the public sector would have done anyway, a large part of the objective of the policy will have been missed. I urge the Government to reconsider their attitude to local solutions, which they should encourage. They will not gain much advantage if they simply tailor a project that they wanted to do anyway to fit the PFI criteria that they have established. I urge the Minister to meet his high standards of disclosure and in particular to be completely open about risk transfer. Simply rechristening finance leases as PFI projects will lay up huge financial problems for the future.
  The Government are in danger of getting the worst of both worlds: projects that they wanted to do anyway, with no local creative input or incentives, moved off the balance sheet in a temporary trick to reduce public spending and to avoid its controls. If one of our European partners did that in an attempt to meet the Maastricht criteria, we would rightly call it a fudge and that is exactly what it would be. I hope, therefore, that the Government will not allow their ideology to get in the way of optimum solutions, but, given their record so far, I fear the worst.
  7.47 pm
  Dr. Howard Stoate: I am pleased to be called to speak on the Bill as it is important to my constituents. One of the first schemes that will be built, I hope, after the Bill has been passed is that for the Dartford and Gravesham NHS trust. As my hon. Friend the Member for Gravesham (Mr. Pond) has already said, the people of north-west Kent have waited far too long for the hospital. They have waited more than 18 years for it—since the time I became a doctor in the region and almost exactly the period that the Opposition were in Government.
  I am glad that the Secretary of State for Health and his colleagues have been able to find time in the first three months of the Labour Government to enact the Bill because it is so important, particularly for the people of Dartford and Gravesham and all the people throughout the country who are also waiting for their facility to be built. We pledged to make the PFI work and we will.
  The Bill is short and to the point. It does its job of allaying the fears of the people financing PFI projects in the NHS about protection against the failure of NHS trusts. It is the Bill that has been needed to do that.

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  The National Health Service (Residual Liabilities) Act 1996 served a similar purpose. Under the Conservatives, I suspect that the bankers thought that they needed that legislation because, like many people, they did not wholly believe what the Conservatives were saying about their commitment to the NHS. I am sure that there is much less need under Labour, because everyone knows that we are committed to the national health service, which we founded almost 50 years ago.
  In being short and to the point, the Bill does not address some of the concerns that are being expressed by the medical profession and others about the scope of the private finance initiative in the health service. I know that attempts were made in another place to amend the Bill, but I do not believe that this closely focused piece of legislation is the right means. I want the Bill to complete its passage through Parliament, so that work on new and improved facilities for the people of Dartford and other areas can start on time. I hope that my hon. Friend the Minister can join me in September to break the ground on this project.
  The concerns cannot be ignored as they go to the heart of our understanding of what our national health service represents. One of the concerns is the nature of the services that will be run by the private partners in a PFI hospital. Of course, it is not a new concern, as services are already passing out of the hands of trusts to be run by private contractors. An attempt was made in another place to exclude clinical services from the scope of those that could be transferred to a private partner. The difficulty is in defining clinical services, as I believe my right hon. and hon. Friends on the Front Bench have already found, and which is the subject of tonight's debate.
  The British Medical Association, of which I am a member, has already made a start and included in its definition of clinical services dietetics, physiotherapy, pathology and radiology—which my hon. Friend the Minister has already assured us will not be privatised. We must build on that and I am pleased that the Department is working on producing a definition of clinical services. I trust and hope that there will be wide consultation with the medical profession and with those working in the NHS, as well as with those representing patients.
  Mr. Jack: As a doctor, perhaps the hon. Gentleman could help me—[Laughter.] I always look to the right people for advice. That is why I am asking a question. Does the hon. Gentleman consider haemodialysis a clinical service?
  Dr. Stoate: Yes, I do, and I hope that that will be included in the definition of clinical services as eventually set out by the Government. As I said, it is the subject of discussion and negotiation. No doubt, a full statement will be made at some time in the future. I would certainly include it within clinical services.
  In protecting clinical services, we must not lose sight of the importance of other services to the care of patients in the NHS. Old jokes about leaving hospital in a worse condition than on admission are not funny if the cause is poor cleaning or catering services that have been allowed to decline as a result of cost cutting. Further contracting out of those and other services, if they are not defined as clinical, must involve unions and community health councils to ensure that the interests of staff and patients are recognised.
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  Another concern is the involvement of private health care providers in PH consortiums. Initially, the major hospital projects are mainly in the hands of construction companies. That is no bad thing as the construction industry has taken a severe drubbing over the past 18 years and so is now welcoming this boost to their fortunes. Once hospitals are built, will construction companies continue to be interested in the facilities of a hospital for the long term? In the private sector, such expertise lies mainly with private health contractors and providers. There are signs that companies in the United Kingdom and the United States are well aware of that and are looking for opportunities within PH projects.
  I want the best for the NHS, for the best price, and I am not afraid of private sector involvement where that is appropriate—but I do not want a takeover of health care by stealth. I would like the Minister's assurance that interest in PFI projects will not end with approval. I want to know that the Government will take a close look at any changes in PFI consortiums and the ownership of private partners, to ensure that they are for the benefit of the NHS. Trusts must not become secondary purchasers of health care with all the providers in the private sector.
  In the five years since the PFI was introduced by the Conservative Government in 1992, no major hospital building was started. The Labour party made a manifesto commitment to make the PFI work in the NHS, and within our first five months building will start on the new hospital for Dartford and Gravesham. The 50th anniversary next year of the start of the NHS will be a true celebration of a health service available to all, on the basis of need, not ability to pay. I am pleased to support the Bill.
  7.53 pm
  Mr. Simon Hughes: At 5.28 am today, with the hon. Member for Vauxhall (Kate Hoey), I drove the first Bakerloo line train through the tunnel from south bank to north bank, after nine months' closure.
  Mr. Milburn: The hon. Gentleman will need an early night then.
  Mr. Hughes: That is a good try, but the Minister ain't seen nothing yet.
  This evening, the Government are trying to drive through, in one sitting, the first health service Bill of this Parliament. On behalf of my colleagues, I want to register our severe disapproval of yet another abuse of the powers of government. I believed that the Labour Government would try to conduct their business properly, but they are not. So far, six Bills have had a Second Reading. The Referendums (Scotland and Wales) Bill was the subject of a guillotine motion, and it was then pushed through on the Floor of the House. The latter action was, arguably, valid because it was a constitutional Bill. We have just debated a guillotine motion on the Finance Bill—not unheard of, but not always necessary. The Plant Varieties Bill went through all its stages in one day. It may not have been a Bill to shake the foundations of the globe, but it raised many important scientific questions. The Firearms (Amendment) Bill was rushed through on the Floor of the House instead of going into Standing Committee. Part of the Education (Schools) Bill has also

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  been dealt with on the Floor. That is not the fault of the Minister—I simply say to the Government that it is arrogance and they should not behave that way. The evidence to support why the Government should not behave with such arrogance has come in this debate from the hon. Member for Dartford (Dr. Stoate) and his neighbour the hon. Member for Gravesham (Mr. Pond), who have raised major concerns about the Bill.
  I am surrounded by a significantly larger number of Liberal Democrat colleagues than I was before the election. One reason why they are here is that the public were extremely sceptical of both the Conservative Government's and the Labour Opposition's positions on the health service, and rightly so. Many of my hon. Friends were, in large measure, elected because we did not believe that a Labour Government would put enough public finance into the NHS, and the proof of the pudding is in what the Chancellor has been telling us ever since election day.
  We take a fundamentally different position from that of the old Government and that of the new, both on the general structure of the NHS and on the Bill. I respect the Minister. We do not believe—and I hope that the Government do not believe—in a top-down health service. However, when he told the House recently that the Government do not intend to recreate regional health authorities, it sounded as though the obvious tier for strategic planning in England, elected and democratically accountable, had been abolished at a stroke.
  We do not support the view of the hon. Member for Stratford-on-Avon (Mr. Maples) on the health service—that we simply let a thousand flowers bloom and allow anybody who thinks he wants a PFI project to dream one up and pop it up to the Government for approval, without any intention of seeing it as part of a strategic planning process. The approach has been proven to be far from right, not least because so few projects have been approved and because a system non-strategically planned—as my hon. Friends the Members for Newbury (Mr. Rendel) and for Hereford (Mr. Keetch) can show—has resulted in many projects in the pipeline never getting through, however strategically important they might have been. There was no prioritisation.
  The Minister has said, and I accept that it is an improvement, that there will be central scrutiny and prioritisation. I hope that over the relatively long summer holiday, when the hon. Gentleman is lying on the beach, he will reflect on his words and realise that it would be far better for him—I hope that he keeps his job for as long as the Government are in office—to have regional strategic planning as that would make his job better and it would be better for the health service. Matters should not be decided only in Richmond house or Whitehall; they should be decided around the country.
  We should not tonight rush through Second Reading, Committee stage, Report and Third Reading. The hon. Member for Stratford-on-Avon said that we have until 10 o'clock. I hate to tell him, but we have until 9 o'clock tomorrow morning. The Minister might wear a bit by then. My hon. Friends are in good spirits and good form and may well keep the Government up for some considerable time yet.
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  We want to ask hard questions partly because—as the hon. Member for Gravesham, my hon. Friend the Member for Hereford or I could tell the House—many schemes proposed under the PFI end up as scaled-down versions of what the commissioning authority wanted. The commissioning authority might say that it wants, for example, 500 beds, but it is told that it can have only 300 or 400 beds. In my own local hospital trust—Guy's and St. Thomas' Hospital NHS trust—the PFI scheme failed because the trust was presented with ever smaller proposals, and the trust finally said, "Thank you very much, but we can do it much better ourselves." Projects have therefore returned to the public sector, and the PFI has disappeared from the agenda.
  We have to consider some very serious issues. Regardless of how undemocratic health authorities may still be—even after replacement of Tory nominees by other nominees, and however much they may consult and reach a view that they must provide 500 beds, for example—it will not be much of a planned health service if the private sector ultimately does not deliver what authorities have asked for. There are, therefore, severe doubts not only about the Bill's points of substance but even about some of its practicalities.
  The Order Paper summarises the Liberal Democrats' principal objections to the Bill. The first is that the PFI is clearly one of those financing systems—which can be improved and tempered—that is driven by someone saying, "We think that we can make a profit out of this scheme, but not out of that one." The scheme is driven by commercial profitability—private sector partners do not join it to make a loss—rather than by strategic and locally calculated health need.
  Like me, many hon. Members represent areas that have high levels of health deprivation, morbidity and mortality. The areas that most need the health service, however, are not those that, for self-evident reasons, will provide the biggest returns.
  Mr. Stevenson: I am particularly interested in the local point made by the hon. Gentleman. What does he say about the situation in my area in which a PFI scheme that has had the support of the district health authority, the community health council, the trusts and the local community has been held up for four years? How can that be top-down consultation—surely it must be bottom up? The project has been held up because of the system that the Bill is designed to expedite.
  Mr. Hughes: The hon. Gentleman makes a good point. We have tabled an amendment to the Bill to provide consultation with and approval by both the public and the authorities. I do not know the details of the scheme that he mentioned, but he said that such consultation has occurred. Once it has crossed that threshold, the scheme should get off the starting blocks.
  If the hon. Member for Stoke-on-Trent, South (Mr. Stevenson) will bear with me, I will also tell the House how we can better fund schemes in the constituencies of all hon. Members, because the Liberal Democrats have an answer. I am not speaking in the debate only to be critical without providing a constructive option. My right hon. Friend the Member for Yeovil (Mr. Ashdown) has said that the Liberal Democrats are "the constructive Opposition", and today we will oppose constructively.

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  We must, however, ensure that schemes—regardless of which hon. Member's constituency they are in—are priorities in the larger scheme of things. Perhaps the scheme in the constituency of the hon. Member for Stoke-on-Trent, South is a very good one, but—in a time of limited health resources, even with private finance—it may not be the most important one in his county, district, borough or region. We must consider that factor. My colleagues and I believe that schemes must pass also the test of being regionally and strategically important before being considered a priority.
  The Minister said that the PH process is the best method of getting money into the health service. My hon. Friends and I disagree with him on that point and think that, if he conducts his review openly and honestly, he, too, will reach a different conclusion. We do not believe that there is evidence to support his conclusion. Until very recently, even those at the Treasury said that they did not believe that the PFI was the best way to accomplish that goal.
  Mr. Milburn: On a point of information for the hon. Gentleman, I said that our PFI review would examine a variety of means of establishing public-private partnerships, of which the PFI is certainly one possibility. We will look beyond the PFI, and we are certainly not wedded to the Tories' version of the PFI. I should make that clear to him now.
  Mr. Hughes: The Minister knows that I welcome that statement. One of the burdens of our case is that there should have been such consideration before the general election. The Labour party should have reached a view on establishing a better scheme. The Liberal Democrats think that a better scheme—I will be honest about it, and it is not a secret, a perfect answer or even terribly original, although I hope that the Government will consider it in their review—would be a capital-funding bank for health service projects, which can be organised both regionally and nationally. Parallel organisations, although in a different context, are regional development agencies.
  The Minister and other hon. Members will know that such a move has been advocated most recently by the King's Fund as a way in which to ensure that one agency provides both public capital funding and private capital funding. Such an agency would be better because everyone would apply at the same time and with the same criteria. We could do away with variable interest rates, and people would not have to operate by different timetables. We would also be able to pool resources by using that method of obtaining private finance. There would be many benefits.
  I will not pretend—as I did not pretend in debates on charging or on rationing in the health service, which will come regardless of what we pretend—that we will be able to manage the health service without private money. We never have and we never will operate the NHS without private money, and the question is only one of how we will do so. Liberal Democrats believe that rather than arranging such finance on a local and ad hoc basis, we should arrange it more strategically, both regionally and nationally.
  Mr. Maples: If the hon. Gentleman is suggesting that there should be some type of bank that contains private and public money, is he aware that all the money spent
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  as loans by that bank would be public spending and count as part of the public sector borrowing requirement? How would he get round that?
  Mr. Hughes: No, that consequence would not follow; it is a separate matter. The hon. Gentleman knows enough about the health sector to know that a separate debate is occurring in which the Treasury is very defensive—we all know the score—about what constitutes public sector borrowing. He knows also—because it was his predecessors' idea—that the PFI scheme was his predecessors' method of getting round that problem and that accounting criterion.
  A very odd accountancy fiction—it is no secret; it is the argument—is that spending money on lease payments for health services, like hire-purchase payments on a car, does not constitute public expenditure, whereas buying services or a car outright does constitute public expenditure. No one in the real world believes that there is a difference in the types of payment, because it is all money going from the public purse into a private pocket.
  The former Financial Secretary might believe that there is a difference in leasing. The issue, however, is how we define what is public expenditure and what is not. As he knows, the Treasury's position in that debate is under attack and is no longer generally accepted.
  Mr. Jack: Perhaps the hon. Gentleman will first tell the House how accounting financial reporting standard 5 relates to his comments. Secondly, will he tell us, in the mechanism of repaying that private capital as some type of lease payment, where the money will come from? Thirdly, is it not the case that that private money would attract a greater rate of return or interest than the public money that goes with it? Therefore, by definition, that money would be more costly in terms of public expenditure. Perhaps he will deal with those three points.
  Mr. Hughes: I cannot deal with the first point, because I have not a clue about it. I can, however, deal with the second and third points. The first issue—it is not only a health service issue—is how one defines public expenditure. It has to do with the public-private financing of, for example, the railways and public transport. It has to do with whether or not we take capital receipts for housing purposes as public expenditure. The same debate on spending crosses Government Departments. The Treasury has always defended its position that certain things count as public expenditure and others do not.
  When the previous Government were in power, and when the right hon. Member for Fylde (Mr. Jack) was a member of it, they pursued private sector finance because they believed it would not count towards public expenditure totals. I understand why they did it, but I support the current Minister's view that we need to consider afresh whether there are better ways of producing, at low cost to the public purse, the same gearing or ratio of public to private sector investment.
  I cite another obvious example. When the previous Government set about establishing city technology colleges around the country, the theory was that 80 per cent. of the money would come from the private sector and 20 per cent. from the public sector. In broad-brush terms, the reverse happened—20 per cent. came from the private sector and 80 per cent. from the public sector

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  because, in the end, it was not seen as a saleable proposition. We have to examine not only what maximises public investment in the health service, at the lowest cost to the taxpayer, but what maximises private investment.
  There are two other substantive reasons why my colleagues and I believe that the Bill is inadequately drafted. It is a bit rich for the Government to proceed as they are, given that in opposition they went hammer and tongs at the Tory Government about the threat of privatising the NHS and, in particular, clinical services. I remember the right hon. Member for Islington, South and Finsbury (Mr. Smith), who was then the shadow Secretary of State for Health, going on about the privatisation of clinical services during Question Time after Question Time, and seeking assurances that they would not be included.
  If clinical services are not to come under the PFI, they should not be included in the Bill. It is no good the new Government saying they are terribly sorry, they will not include clinical services but they will be left in the Bill. I understand the semantic argument that there is a grey area in respect of back-up services, but whose Bill is it? The answer is that it is a Tory Bill, not a Labour Bill at all. It was taken off the shelf at Richmond house—I saw it there before the election.
  Mr. Milburn: If the hon. Gentleman thinks that he has a solution to this thorny problem, perhaps he will give us a list now of clinical and non-clinical services. Let him give us a list if he thinks it is as easy as that.
  Mr. Hughes: When we deal with the amendments that we have tabled, we shall deal with exactly that matter. It is not an easy issue, but we have provided a definition and included it in an amendment. Our proposal is much better than the Bill as drafted. If the hon. Gentleman thinks that there should be a list, the way to proceed is to draft a Bill that contains a general definition and includes a schedule which we can amend by orders under secondary legislation. He knows that as well as I do. Two categories have already been defined—his colleague in another place mentioned radiology and pathology, which are straightforward. [HON. MEMBERS: "They are not."] My hon. Friends who have dealt with this matter professionally will tell the Minister that they are not that much less straightforward than many other categories.
  The point is that the Government should not introduce their first primary legislation without having thought through its implications. I know that the Minister has not been in opposition for 18 years, although his party has, but the issue has been around for several years; the PFI has been around since 1992. It is no good saying in February, March or April that clinical services must not be privatised, but then coming to the House in July with proposals to include them in the PFI.
  Finally, consultation must be built into the Bill. It may be that there was widespread, local consultation in Dartford, Gravesham or anywhere else. That is very helpful, but there is nothing in the Bill to require it; there is no guarantee. Health authorities are not the most democratic of institutions, and health trust boards certainly are not—[Interruption.] The Secretary of State
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  for Health says that they will be. With the greatest respect, as long as their members are appointed by him, they will not be democratic bodies, and with a week's notice to get in the nominations, they certainly will not be. I welcome the idea that we review their membership.
  The Bill should self-evidently not be going through all its stages in one sitting. If we are to have a proper debate on which services are clinical services, the Bill should go into Standing Committee where we can debate it and try to get it right. We are here to get legislation right, not to rush it through to meet a self-imposed Government deadline. When this Parliament began, no date was fixed for the end of term. The Government have control of the agenda, and, as far as anyone can see, they have their own Back Benchers entirely under control, apart from one or two. They therefore have to deliver the answers.
  We are going to probe as hard as we can and remain consistent with the position we have adopted for the past five years, unlike the Government who have done a somersault. The reality, as my hon. Friend the Member for Gordon (Mr. Bruce) made abundantly clear and as my right hon. Friend the Member for Yeovil has often made clear to the Prime Minister, is that we are facing not a future in which there will be a great bonanza of funding for the health service, but a future in which capital funding from the public purse will be significantly pared down. If we are to rely on the private sector under a Labour Government, which many Labour supporters think is a bit funny anyway, we want to know what the rules are and that it is done with the public's consent and in the public's best interest.
  On this issue, the Conservative Opposition are not really an Opposition at all. We are the people who are going to tell the Government, as we told their predecessors, that the PFI is not the right way forward. The Government have not thought it through, and it is a pity that they are trying to bulldoze the Bill through the House on a summer's evening, hoping that no one notices. We hope that people will notice and realise that it is a bad way to legislate.
  8.16 pm
  Mr. David Hinchliffe: I have some reservations about the general principles of the Bill, but I must commend the Minister of State, Department of Health, on dealing with a difficult situation carefully and cleverly. The problems that the Bill is designed to tackle present him with a number of difficulties.
  It has not come over loud and clear from the Opposition, but we have a deteriorating national health service infrastructure, which is very much a result of neglect over the past 18 years. Hon. Members present will know what problems that has caused to their constituents. The previous Government's private finance initiative has very apparently been a failure in that, as my hon. Friend the Minister made clear, few schemes have come to fruition.
  One of the difficulties of dealing with the capital infrastructure in the NHS is the way in which the market-based organisational structure of the previous Government—the internal market—has driven wedges between various elements of the NHS. I am also aware that the Minister speaks against a background, which we understand, of extremely limited options for public expenditure and of a radically changing NHS. I shall deal with those points as they manifest themselves in Wakefield.

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  The Secretary of State and the Minister are aware that my constituents are in the main served by Pinderfields district general hospital. They may also be aware that a substantial part of that hospital provides care in huts constructed to care for soldiers injured in the second world war, before I was born and, I imagine, before most, if not all, hon. Members here were born. [HON. MEMBERS: "Not all."] Most, I said, not all.
  That situation has a knock-on effect on the operation of the hospital. A hospital with those facilities has difficulties in attracting top-quality staff, who consider the capital arrangements, the buildings and the working conditions before applying for a post. Pinderfields has sometimes been concerned about its inability to attract high-quality consultants.
  The hon. Member for Orpington (Mr. Horam), who was an Under-Secretary of State for Health under the previous Government, is in his seat. He knows that I have often spoken about how my constituents have been deceived by commitments given by the previous regional health authority under the former Government about the arrangements for the closure of facilities.
  I was particularly angry about the closure of Manygates hospital, in which I and my two children were born. A clear commitment was given to my constituents as part of the public consultation process that that facility would be replaced by a purpose-built maternity facility at Pinderfields hospital. That has never happened. My constituents are rightly aggrieved about having been misled when the community health council and others accepted the closure in the formal process, only to find that the previous Government, through the health authority at district and regional level, did not follow through on the commitment that had been given.
  Pinderfields hospital developed a private finance initiative project that included a new maternity facility, but, for reasons that were no surprise to my hon. Friend the Member for Normanton (Mr. O'Brien) or me, the proposal was not approved in the list recently published by the Department of Health. It was no surprise, because the project was developed against a background of an organisational shambles in the running of the health service in Wakefield over the past few years under the previous Government. That situation is a direct consequence of the internal market.
  Since the introduction of the internal market, we have had two competing acute trusts serving the east and west of the Wakefield metropolitan district. We have a higher than average level of GP fundholding. The former Under-Secretary will remember the evidence I produced of a clear two-tier system, with patients of fundholders in Wakefield being given priority over those of non-fundholders at one hospital.
  It was proved and accepted by the health authority that that was a logical consequence of the system introduced by the previous Government. The only way in which the health authority could deal with the situation was by moving to total GP fundholding on a locality commissioning basis, which we now have in Wakefield. Since April, we have also had a merged acute trust—the Pinderfields and Pontefract trust.
  I suspect that one reason why my right hon. Friend the Secretary of State and my hon. Friend the Minister did not bring forward the Pinderfields PFI project was the uncertainty over the arrangements for future acute hospital
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  provision in the Wakefield area. The two trusts were previously based on district general hospitals at either end of the area. PFI schemes were being brought forward for both hospitals. A decision has to be made on what provision will be made and what the new PFI project will be.
  The current review of acute provision, which began after the public consultation process that resulted in the creation of a single trust, is being carried out by Newchurch and Co. I am concerned about the fact that that is the same company that was invited by the previous Government in January 1993 to advise authorities and trusts on the private finance initiative. I hope that my right hon. Friend will look into that.
  Questions could be asked about the objectivity of the company in looking at acute provision, when it has also been given a similar role by the previous Government on the PFI. That may be perfectly honourable, but questions are being asked about whether it is appropriate for the company to be involved in those two areas, which may come into conflict.
  In my area and elsewhere, there is a lack of clarity about the future balance between primary care and hospital care. Probably as a consequence of the move towards fundholding, some huge GP complexes, the size of small cottage hospitals, are being constructed in Wakefield. I know of no strategic debate having taken place about the implications of that for the future construction under the private finance initiative of acute hospital provision.
  One huge complex close to completion on Barnsley road in Wakefield, near where I live, will offer minor surgery, clinical investigations and low-dependency beds. I do not object to a move towards such provision, but when considering a Bill about the PFI, we must think about what capital developments will be needed in years to come. My slight worry about the PFI arrangements is that we may lock ourselves into models that will not be appropriate in even five years.
  The private finance initiative has added to the obvious lack of clear direction resulting from the internal market mess that the previous Government made of the good-quality provision that we have traditionally had in my area. I accept the amendments to the scheme made by my hon. Friend the Minister. I have listened carefully to the differences from the model offered by the previous Government. My perception of the PFI has been as a political never never land.
  My hon. Friend the Member for Workington (Mr. Campbell-Savours) pointed out earlier that the revenue implications of the scheme as operated under the previous Government have been unclear. We are not sure what expenditure problems we are building up for future years. I am particularly concerned about that.
  That may be a never never area for national politicians, but it is not for the NHS work force. I listened carefully to what my hon. Friend the Minister said about the grey area in clinical and non-clinical services. I am concerned that PFI schemes may result in some people being placed in the employment of a private sector employer and finding their conditions of employment far worse.
  I accept that the Minister is reviewing the issue. I should like to put in a plea for those who are regarded as at the bottom end of the clinical team. Hospital cleaners and porters are key people, whom I regard as an integral

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  part of the clinical team. My impression is that my hon. Friend understands the need to consider the future employment of people in such positions.
  I vividly recall my first operation in hospital. I will not go into detail, as it was a somewhat delicate operation, the particulars of which could embarrass one or two people here, including me.
  I was all set for the operating theatre, having been given a pre-med, and I was in some distress because I was not looking forward to the operation. The person who gave me most comfort was the lady sweeping the floor. She was prepared to talk to me and to reassure me that the operation would not be as bad as I thought. She turned out to be right. I have not forgotten that that woman took time out to talk to me, despite being under pressure because she was working for a privatised company in an NHS hospital. She made a difference to my experience of hospital.
  We should understand that the cleaners and porters of this world, who are already low-paid, deserve not to be driven further down the scale. I draw great comfort from the fact that I know that is not on my right hon. Friend's agenda. I look forward to the review to which the Minister of State has committed the Government.
  Audrey Wise: Perhaps my hon. Friend will remember that, when he and I were involved in an inquiry into maternity services, great stress was laid by user organisations on the need for absolute cleanliness in maternity wards. In latter years, those organisations, such as the National Childbirth Trust, have had to advise mothers-to-be to take their own cleaning materials into hospital to do their own cleaning immediately after giving birth. That reinforces my hon. Friend's argument about the importance of the function of cleaners, which is valuable in preventing infection.
  Mr. Hinchliffe: My hon. Friend has made an important point. She deserves great credit for what came out of that report on maternity services. I vividly remember how members of the Select Committee on Health were told about the consequences of a deterioration in cleanliness, which were judged to be a direct result of compulsory competitive tendering.
  Mr. Dobson: I share my hon. Friend's concern about the terms and conditions of ancillary staff. I am glad to report that, on a visit to Halifax, where the Calderdale PFI is a welcome development, I discovered that the terms and conditions of the ancillary staff are an improvement on those that they had when services were contracted out at the Halifax hospitals.
  Mr. Hinchliffe: I am grateful to my right hon. Friend for that reassurance. I know that he has taken on board the concerns that I have expressed, as well as those expressed by other hon. Members on both sides of the House.
  I will not detain the House for much longer, although the Liberal Democrats have said that we might be in for a late night, but I have one worry. We have been handed the PFI model by the previous Government. In my constituency, the models governing future delivery are not
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  clear because of the increased role of GPs. I do not argue against that, because I do not believe that we have ever properly developed primary care along the lines envisaged by the NHS in 1946. If we are not careful, however, the PFI will lock us into what will soon become old-fashioned models of care. We need to watch carefully for that.
  The delivery of community care had been moving away from the institutional model of care homes and nursing homes. As a result of 18 years of Conservative government, however, it is sad to note that the institutional model, which was outdated when the Conservatives came to power, has been re-established.
  If one considers the huge building programme for care homes and nursing homes it is clear that we are moving in the opposite direction to that taken by the majority of other European countries. That backward step is a direct consequence of handing the provision of that care to private companies. They have invested in the easiest form of provision—bricks and mortar—rather than in real care within the community.
  Dr. Peter Brand: Does the hon. Gentleman agree that what has happened in community care is a direct consequence of the private sector dictating how things should be provided rather than the community deciding?
  Mr. Hinchliffe: The hon. Gentleman has understood my point. I am not necessarily saying that there are no good models in the private sector. I accept that there are some excellent models, with regard to community care, for example, in telecommunications and the ability to contact people in their homes.
  I am concerned, however, that, by handing over community care to the private sector, we have taken a significant step backwards, particularly in relation to the care of the elderly. We could do better. I hope that the Secretary of State will understand my concern that the PFI could lock us into old-fashioned models that could be overtaken by far better alternatives, which are on the horizon.
  The Minister of State, who knows Wakefield well, and my right hon. Friend the Secretary of State have listened to my concerns, and I am grateful for the reassurance that my right hon. Friend has given me. I hope that the Minister will respond to one or two of the other points that I have raised.
  8.35 pm
  Mr. John MacGregor: I support the Bill, and welcome the late conversion of the Labour party to the PFI concept in the NHS. I never cease to be fascinated when I hear members of the Labour Front Bench extolling the virtues of privatisation and the PFI, because I recollect from the past 18 years how often they were opposed to both. I am pleased to see their late conversion, because it shows that we won the argument.
  I support the Bill principally because of its effect on the Norfolk and Norwich hospital in my constituency. As the Minister of State knows, it will be one of the first large acute hospital PFI projects, and I hope that it will start shortly. It will undoubtedly be one of the most expensive, and will provide 21st-century, state-of-the-art hospital facilities for my constituents and for people throughout Norfolk.

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  I support two points made by my hon. Friend the Member for Stratford-on-Avon (Mr. Maples), which were doubted by the Minister. First, he referred to the expenditure allocated in the Budget to the NHS next year. It simply is no good to argue that my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), the previous Chancellor, allocated less for next year according to his three-year expenditure programme. My hon. Friend is entirely right to say that my right hon. and learned Friend allocated for this year, 1997–98, a bigger increase for the health service than the current Chancellor has allocated for next year.
  The reason for that is quite simple, as the Minister of State knows perfectly well, because the allocation for the year ahead is frequently increased in the current expenditure round as one moves into the final year and takes something from the reserves. All that the current Chancellor has done is bring forward to now rather than November the announcement of next year's public expenditure increases, and taken those increases out of the reserves. It is therefore absolutely comparable with what my right hon. and learned Friend did in November. The facts are clear. The previous Government provided for a bigger increase for this year than the current Government have provided for next year. My hon. Friend is absolutely right.
  Secondly, my hon. Friend was also right to say that this is a Tory Bill, which, of course, is one reason for my support. It would undoubtedly have been brought before the House if it had been possible to hold the election a little later. I am sure the Minister knows that to be exactly the case, because, as he almost said in his opening speech, the Bill is intended to remove any doubts.
  I agree. The 1996 legislation gave the banking consortiums that intended to help finance the PFI the assurances they sought. I am informed that the Norfolk and Norwich project would have gone ahead, and the Octagon partnership was quite content with assurances of that legislation, until one of the banks involved in the Dartford hospital project raised certain doubts. The Minister of State's legal advice was probably perfectly correct, but in order to provide the belt and braces that one of the banks involved in the Dartford hospital project appears to want, the Bill has had to be introduced. When it was seen that one of the banks involved in the hospital project had raised doubts, those involved in other projects also wanted the safety of belt and braces.
  That is why I support the project. I know that there were discussions, because I was heavily involved in them before the election. The Norfolk and Norwich project was the up-and-coming project. I know that there was cross-party agreement on it.
  Mr. Simon Hughes: Clearly, the Bill and the project need bankers to support them. The right hon. Gentleman may be about to deal with the issue, but can he tell us whether he believes that the community should also support PFI projects? If so, how does he reconcile his position with the overwhelming view of the elected authority in Norwich, which does not support the project?
  Mr. MacGregor: I do not know which authority the hon. Gentleman means. Does he mean the Norwich Labour-controlled city council? If so, I am coming to that subject later. I do not agree with the council. I have
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  consistently said that I support the project in my constituency. I certainly support the PH approach. We had almost achieved our ends—in fact, I think that we would have done so, were it not for the doubt raised by one of the banks in relation to the Dartford project.
  This is a simple Bill that deals with a straightforward point in the correct way, as it would have done before the election. That is why I hope that it will be passed quickly.
  I have, for a long time—since the mid-1980s—been heavily involved in trying to get the Norfolk and Norwich hospital to its present state. There are a number of reasons for the delay. The issue that we are addressing tonight—the clarification of the legal powers in the Bill—was not one of the causes of the delay. There are three main reasons. The first involved the inevitable complexities and legal problems of putting land together and of reaching agreement among all the parties to bring the project to reality.
  The second reason involved the framing of the PFI template. As the Minister correctly said, it was one of the biggest projects, and putting it together was a complex business. The Minister spoke of a steep learning curve, and I agree. As a result of that work, we shall have a template that will make it much easier for other PFI projects to go ahead more quickly—many of the details and problems have been thrashed out. I pay tribute to the chairman of the Norfolk and Norwich health trust, Michael Falcon, and its chief executive, Malcolm Stamp, for all the work they have done in getting the project to this point.
  The third reason—this answers the question posed by the hon. Member for Southwark, North and Bermondsey (Mr. Hughes)—is the one which, above all others, caused the delay, and it has nothing to do with the PH. There have been endless arguments over the siting of the hospital. I originally opposed the idea of the hospital coming to Colney in my constituency. I believed that Hellesdon—the site being proposed in the early 1980s—was the right one.
  The main reason why I was anxious for the hospital to be located in Hellesdon was that the project was in an advanced state of development, and I could foresee a delay of 10 years if, at a very late stage, a decision was taken to change the site of the hospital; but that is what happened. The decision was taken, not least because of pressure from the consultants, to change the site of the hospital, which has led to a 10-year delay.
  The arguments about the siting of the hospital have continued. Ever since the decision was taken to move from Hellesdon to Colney, I have been wholly in support of the Colney project. There have been some issues to sort out, but they have nearly all been resolved. The only remaining issues involve access and whether the road structure is adequate to deal with what will undoubtedly be an expanding hospital.
  Curiously, the delay has brought two benefits. First, we have able to get a more modern hospital than we would have had 10 years ago; we have been able to take advantage of the advances in medical science and organisation. Secondly, the site has been located to the Norwich research park, which will enable the hospital and the research institutions to do a great deal of work on medical research and development that might not otherwise have taken place so easily. Therefore, the delay has brought some benefits.
  The argument seems to be continuing, not least in Norwich city council and among certain people in Norwich. They argue for returning to the site in the

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  centre of Norwich where the present hospital is located. I am convinced that that would lead to another delay of at least 10 years before the people of Norwich and Norfolk got their new hospital. That is why I have been so strongly opposed to having the hospital in the centre of Norwich. There are other arguments: the majority of people using the hospital would find it much more difficult to gain access to the hospital there than if it were located at the new site at Colney.
  Some groups are still exerting pressure. I am glad to see that the two Norwich Labour Members of Parliament seem to have come round to the view that the hospital should be at Colney. But, even today, some groups in Norwich are arguing against the Colney site. In a letter in today's Eastern Daily Press, the secretary of the Keep Our Hospital in Norwich Group mentioned a meeting that the group had just had with officials in the Department of Health. The letter concludes:
  "The officials appeared genuinely interested in the Keep Our Hospital in Norwich alternative and have gone away to evaluate its financial cost compared with that of Colney."
  I know that the Minister has been extremely helpful in considering the matter of the site. He has been extremely fair, and has quickly brought himself up to speed on the matter. He has been supportive of the idea that the hospital must be at Colney. I am certain that we would not see the hospital in many people's lifetime were it to be moved back to the centre of Norwich. The Minister has been robust on the issue and I ask him to continue to be so.
  Once the Bill has been passed—which I hope will happen tonight, and which will clear up any doubts about the financing—work can finally commence on the site within a matter of months, if not weeks. That can happen provided that the Minister sticks to his position. That is why, above all, I support the Bill tonight.
  8.46 pm
  Mr. Charles Clarke: Thank you, Mr. Deputy Speaker, for calling me to speak in the debate. I am glad to follow the right hon. Member for South Norfolk (Mr. MacGregor). I shall later comment on the aspects of Norwich to which he referred.
  I support the Bill as a whole, principally because it is the most effective and practical way of getting hospitals built. I congratulate my hon. Friend the Minister of State on his determination to ensure that the problems of inadequate hospital buildings that exist up and down the country are solved by the Government as rapidly as possible.
  I think that the hon. Member for Stratford-on-Avon (Mr. Maples) was being a little disingenuous; he omitted to mention the massive sell-offs and the massive squandering of the oil revenues during the Conservative years. In contrast to what happened in other European countries, that money was not spent on health or education, but was simply frittered away. It was those Conservative actions that led to the need for us to look at propositions such as the PFI in order to raise funds.
  I also support the Bill because it encourages public-private partnerships. Many areas of management of the public sector gain from such a partnership, and the Bill will encourage that approach.
  Mr. Simon Hughes: Given what the hon. Gentleman has said about spending on health during the Tory years,
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  I take it that he will expect his Government to spend at least as much per year in real terms as the Tories did, over each year of this Government. I am talking about public expenditure, not about extra private finance.
  Mr. Clarke: That is what I hope. That is the answer as given by my right hon. Friend the Secretary of State and my hon. Friend the Minister of State. I, too, share that hope. I think that hon. Members on both sides of the House hope that we shall achieve the growth and success that will allow far higher investment in the public sector, not just in health, but in education.
  I wish to address two specific issues. The first involves the process of the PFI itself. It is critical that the process is open and democratically accountable and that people can feel that they are part of, and understand, it. Although there are issues of commercial confidentiality in any private finance deal and although there is some confusion about whether the problem has to do with openness in NHS decision-taking structures—which my right hon. Friend the Secretary of State is trying to address—or with openness in the PFI process itself, it is absolutely essential that we support what my hon. Friend the Minister of State said in an earlier debate, that
  "It is the people's national health service".—[Official Report, 15 May 1997; Vol. 294, c. 272.]
  The people have the right to know what is being done in their name and with their money. I hope that the review to which the Minister of State referred will set up new processes that fully reflect that aim and require genuine openness and public consultation, so that people will feel that the new developments are for them. Those are not simply internal NHS processes, although the issues raised by my hon. Friend the Member for Wakefield (Mr. Hinchliffe) relating to working conditions are critically important; community commitment to the developments is also a factor. Although not a major theme in the debate, there are questions to be asked about how effectively some community health councils are representing the communities that they serve.
  I want to draw attention to the need to take into account environmental considerations. That is important in the context of the PFI, because some developers have told me that they would greatly prefer to develop on green-field sites rather than in city centres. There are serious environmental issues that must be considered. The current NHS process looks at the environment for patients, staff and visitors, but not for the wider community; nor is it simply a matter of formal planning approval. The new PFI processes should ensure that a full-scale environmental impact assessment of a new hospital or health development is carried out.
  Environmental impact must be a major factor in making choices, and to illustrate that point, I refer to two parliamentary questions that I asked recently. When I asked my hon. Friend the Under-Secretary of State for Defence
  "what guidance his Department currently applies in ensuring that full account is taken of the environmental impact of its new building programmes",
  he answered:
  "My Department carries out an environmental assessment on all new buildings likely to generate environmental effects. The environmental assessment is included in the formal consultations with the local planning authority as part of the planning process."—[Official Report, 19 June 1997; Vol. 296, c. 264.]

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  However, my hon. Friend the Minister of State, Department of Health, accurately reflecting the policies that he inherited, had to answer:
  "Policy on environmental issues is the responsibility of the Department of the Environment, Transport and the Regions, which produces guidance for local authorities to use when considering planning applications by NHS Trusts for new building projects."
  He went on to say:
  "NHS Estates, an Executive Agency of the Department of Health has issued 'A strategic guide to environmental policy for General Managers and Chief Executives'—[Official Report, 26 June 1997: Vol. 296, c. 621.]
  What the Ministry of Defence can do, the Department of Health should be able to do. It must be recognised that all these developments have major local environmental implications, and full weight should be given to such factors when making a decision. I hope that my hon. Friend the Minister of State can give full consideration to both those aspects—openness and accountability and environmental impact—and offer the House the necessary assurances on both matters.
  My second theme is the issue of the Norwich hospital. For the reasons stated by the right hon. Member for South Norfolk, the Norfolk and Norwich hospital is the most expensive of all the projects either agreed or approved by the Department. The new site was located in the right hon. Gentleman's constituency until boundary changes placed it in my constituency of Norwich, South, along with the Norwich research park and the John Innes centre—a net gain to me and a net loss to him over which we can wrangle in future.
  Like the right hon. Gentleman, I emphasise that most people in Norwich believe that the new hospital should be in Norwich. However, because of the problems that I have just outlined, many in my constituency—obviously, I cannot speak more widely than that—did not believe that the chosen site was the right one, because the PFI process that the previous Government went through was flawed: it was not properly open and did not take account of environmental factors. I do not say that the procedures were not followed—I am sure that they were—but it was not a correct process, which is why my constituents welcome the decision of my hon. Friend the Minister of State to review the whole process.
  The right hon. Member for South Norfolk says that the delays to the PFI project were entirely due to petty political squabbling between the local councils, both Labour and Liberal Democrat, but that is not a sustainable position. The fact is that the process lacked clarity—the question whether the new hospital was to be the second or the first Norwich hospital and a whole series of other issues led to disputes within and between political parties. There is little to be gained from going into the history of the dispute and, with respect to the right hon. Gentleman, it diminishes the force of the rest of his argument to suggest that party political arguments were the most serious problem.
  In the light of those failures under the Tories, I want to take the opportunity of this debate to ask my hon. Friend the Minister to do everything in his power to ensure, first, that the new Norwich hospital has proper transport and good access. The right hon. Member for South Norfolk referred to that issue, which is of great concern to local people, especially elderly people, and it must be sorted out. Secondly, I ask my hon. Friend to ensure that bed
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  numbers are kept under constant review, as there are serious doubts in Norwich as to whether the bed numbers planned for the new hospital will be adequate. Thirdly, constructive uses must be found for the sites of the hospitals that are to be closed—the Department owns the sites, so its attitude is extremely important. Fourthly, there must be proper primary care—including accident and emergency care—available in the city of Norwich.
  I hope that my hon. Friend can offer assurances on those matters, so that the benefits of the new health care PFI process, which I strongly support and for which the Bill provides a legal foundation, can be felt by the people of Norwich in their entirety.
  8.56 pm
  Mr. John Horam: It is a rare pleasure, in a House with such a large Labour majority, to speak in support of a Tory Bill.
  Mr. Simon Hughes: There may be more.
  Mr. Horam: The hon. Gentleman is right; there may be more conversions along the road, as reality seeps in on this new Labour Government.
  It is also a pleasure to speak in favour of a Bill with which I was personally associated. It is almost word for word what the previous Government would have passed, perhaps with Labour help, if the general election had been called even a week later than it was.
  I am delighted that the Government have adopted our Bill so fully. I note what the Minister of State said about one small change for the sake of clearer English, and I wholly support that; if more Bills were written in clearer English, the House would be delighted.
  I must even disagree profoundly with the contention of the hon. Member for Southwark, North and Bermondsey (Mr. Hughes)—who is looking at me with fond affection from the second row—that the Government are not right to push the Bill through in an evening. I think that they are absolutely right to do so.
  Mr. Hughes: The hon. Gentleman would think that.
  Mr. Horam: Although it prevents me watching on television the last night of the Royal Opera house, Covent Garden, which I very much regret, it is sensible for the Bill to complete all its stages in one evening, because it is the type of simple Bill, with all-party support, broadly speaking, which should be pushed through quickly. It is totally different from the Finance Bill, which my right hon. and hon. Friends on the Opposition Front Bench rightly made a lot of fuss about earlier. The Bill is needed—[Interruption.] I have provoked an intervention. I knew that I should never have departed from the path. The Bill is simple, clear and has broad all-party support, so it should pass quickly.
  Mr. Hughes: If, as the former Minister rightly says, the Bill was on the shelf when he left the Department of Health, why did not the Government introduce it weeks ago, instead of waiting for the last few days before the summer recess and then being obliged to rush it through the House? He must agree that there would have been a better way.
  Mr. Horam: There it is; harmony has been restored. I have no doubt that the Government could have passed the Bill more quickly and with greater scrutiny if they had so wished, but they did not do so.

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  This support may be unwelcome to the Government. Let me point out that the reason for the Bill is Labour's habitual financial incontinence. The banks have gradually become extremely suspicious about lending to organisations that are not wholly part of central Government—local authorities, trusts or whatever. They have become suspicious, because there is a long history of the usual improvident loony Labour councils getting into financial difficulties and trying to borrow money at great length from City bankers and so on.
  One thinks especially of the swap arrangements entered into by the London borough of Hammersmith and Fulham—an incident that is embedded in the memory of all City bankers because, in the end, the court decided that it was ultra vires for the borough to engage in such practices. That was another example of an improvident loony Labour council doing things that were crackers, causing the City to become very leery of lending to bona fide organisations such as health trusts and local authorities, because it could no longer trust Labour. I believe that it is now discovering that it can no longer trust Labour in national Government, never mind local government, as a result of the events of the past few weeks, but that is a party political point.
  There is another reason why I am glad that the Bill has been introduced. As my hon. Friend the Member for Stratford-on-Avon (Mr. Maples) said, it is, we hope, the final full conversion of the Labour party to the private finance initiative process. As has been said, for many years Labour opposed the PFI, and those of us who were Health Ministers in the previous Government remember a constant stream of shadow Health Ministers—I hope that Labour has a better record in government than in opposition—inveighing against the PFI process as creeping privatisation, totally unacceptable, ideologically unsound and so on.
  I hope that the Minister of State, who has persuaded the Government that the PFI is sensible, can bring the trade unions with him. The House will remember the Unison advertisement—in the Manchester Evening News, I believe—which said that the PFI was so unacceptable that it was the worst thing to happen to the national health service since 1947. The advertisement appeared in connection with the South Manchester University Hospitals NHS trust scheme—one of the 14 schemes that the Minister of State has prioritised. I hope, therefore, that the Government will bring the trade unions with them.
  When we were in government and the Opposition were opposing our proposals, we had to put up with the criticism that the implementation of the PFI was a mess and that it was going too slowly. Astonishingly and amusingly, within weeks of a Labour Government being elected, two huge schemes are given the go-ahead. How could that have happened if all the underlying work had not been thoroughly done? Within a few weeks of that, another dozen schemes are out into the open, which can proceed within the next 18 months. That could not have happened if all the groundwork had not been done.
  The Minister of State has walked into a rich inheritance. When he opened the doors of Richmond house, he could not have conceived that such a cornucopia of schemes was waiting for him to pick up and advance. Indeed, as Lord Jenkin of Roding said in another place, Labour took
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  over at an extremely fortunate moment in the history of the private finance initiative, and I am interested to see that the Government are advancing it.
  I shall risk another intervention from the hon. Member for Southwark, North and Bermondsey by saying that we are used to the Liberal Democrats taking credit for things that other people do. Hon. Members will know those little leaflets that come through letter-boxes when a Labour council has done something and the Liberal Democrats claim credit for it, or when a Conservative council does something and the Liberal Democrats are very sharp to claim credit for it immediately. They may have voted against it in some cases—
  Dr. Brand: We deliver leaflets.
  Mr. Horam: Yes, the Liberal Democrats do deliver leaflets. They endlessly deliver leaflets. They do not canvass, but they deliver leaflets.
  Even by comparison with the Liberal Democrats, who have a tendency to take credit for things that they have not done, the Minister's announcement the other day was astonishing. However, as has been said, it was not an announcement of progress on schemes, but a cancellation announcement. Apart from the 14 schemes that were going ahead anyway, 23 had been cancelled or delayed, or whatever phrase one may choose. I feel sorry for the new Labour Members—
  Mr. Milburn: As the hon. Gentleman is so confident about all those schemes, on what time scale does he think that they would have gone ahead? Will he remind us how many successes there were under the "let a thousand flowers bloom" philosophy? How many hospitals were built?
  Mr. Horam: The schemes would have gone ahead more quickly than under a Labour Government, because we would not have stopped for innumerable reviews. Thirty-eight reviews are now being conducted—indeed, they overlap. The hon. Gentleman had to exclude some hospitals from the PH scheme, because the London review does not report until later in the year. He is therefore not on to a good point.
  New Labour Members representing Gloucester, Peterborough, Leeds, Rochdale and elsewhere can simply thank the Government for the fact that the schemes that were going ahead under the Conservatives have now been delayed, cancelled or are otherwise a problem. As my hon. Friend the Member for Stratford-on-Avon said in his opening remarks, the hon. Gentleman is imposing central planning. We are now moving back to the cosy Stalinism that the health service knew for so long, but from which, under the regime that we put in place, it was gradually escaping. We deliberately motivated people and gave them the power to make decisions.
  An important issue over the years to come will be the difference between the two sides of the House: the Conservative party believes in local decision making, whereas the Labour party believes in central planning. The Labour party believes that Richmond house and Quarry house know best; we believe that local managers have their ears to the ground and know how to do the job.
  We believe that that is the way forward on the vexed issue of clinical support services, which the Liberal Democrats also raised. Why do we need to define clinical

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  support services? Why must we constantly invent things that are out and things that are in? Why not simply let local clinicians decide whether radiology or pathology are now out? Why debate the matter here? Local people can decide in the light of their experience what works in their area. That is wholly consistent with the Conservative and Liberal Democrat view. I am sorry that the Government have gone to so much trouble to come up with a definition of what is right for clinical support services. It is totally unnecessary. When one hears the British Medical Association say that there must be a clear definition of a clinical support service, one's suspicions that that is the wrong track to go down prove to be well founded. It is an unnecessary ideological battle that need not be fought.
  I welcome the Bill but stress that, although the centre has a role, it is not the heavy-handed central planning role that the Government envisage. I make two recommendations. First, the Government should take more care about the outline business case. In my experience, too many unsatisfactory schemes surmounted that hurdle too quickly. If the Government were much tougher at the outline business case stage of a scheme, it would benefit the whole process. I am sure that that will be taken into account in the years to come.
  Secondly, a point that has not been raised during the debate is the quality of buildings, particularly design quality. Evidence now shows that people's health improves more quickly in the right surroundings, and hospital staff are better motivated if their surroundings are pleasant and they have an input on them. The great danger with the PFI is that it becomes a design-and-build process, in which the architect is employed by the consortium building the hospital and the input from consultants and others involved in the hospital is too little. The danger is that financial and planning considerations simply outweigh concerns of quality, functionality and ability to produce a satisfactory health solution.
  The Minister of State may be aware that, as Minister, I established a committee to examine design quality. The Minister for Arts is also concerned about that issue, and we have addressed a joint conference about the quality of hospital buildings. The Minister of State will know from his own experience that the NHS has a poor record when it comes to quality buildings. For example, St. Thomas's hospital, which was bombed during the war, retains its original Florence Nightingale-influenced design. There is an interesting building next to the hospital, but a very unsatisfactory office block behind it. Those three totally different buildings create an architectural mess that Members of Parliament must look at every day when we stand on the Terrace.
  We must not forget about the quality of new hospital buildings. I am sure that the hon. Gentleman does not wish to be remembered as the man who built unsightly hospitals all over the country. We want new hospitals to contribute to health care provision and to be good neighbours in their areas.
  I welcome the Bill as a recognition and a continuation of the previous Government's policies. I wish it satisfactory and speedy progress through the House this evening.
  9.10 pm
  Dr. Peter Brand: This is a fascinating debate about a very small Bill. I am amazed by the amount of support that it enjoys on both sides of
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  the House, because hon. Members have very different ideas about what the PFI achieves and what the Bill encompasses. I was brought up to believe that words mean what they say and, as a new Member of Parliament, I thought that legislation should say what it means.
  I have received many assurances from the Minister today and in another place about what may form part of the PFI definition and what powers the Bill confers. However, it is difficult to see how the Government, in their new role, are clarifying their approach to the private sector. Today's debate has been confused: the PFI is not equivalent to private sector involvement. The PFI is a form of private sector involvement, but it is not the only form.
  The private sector has been involved in the NHS for many years. I suppose that I should declare an interest in the debate: I am an NHS general practitioner and I have two surgeries that are part of a mini-PFI scheme. We buy in several clinical services from the private sector, such as pathology, radiology and diagnostic imaging. The private sector provides many magnetic resonance intensifier services in this country. The great test of private sector involvement is that the private sector can make a profit only if it can attract patients or work from those who purchase its services.
  I am confused about Conservative Members' attitudes to the PFI. Accountability must be written in by contract. Those who are involved in PFI delivery will confirm that such contracts are long term. There is nothing wrong with involving the private sector, but it must be accountable. I have problems with the Bill as it stands because the Government have not yet defined how they will operate the purchasing-providing split in the NHS.
  Under the previous Government, private sector involvement depended on competition to deliver quality and value for money. If we are to have not purchasing-providing, but a form of cosy commissioning and delivery by favoured friends, we must become very good at guessing what the national health service will need not just in two years or five years, but in 10 years.
  Hon. Members may remember a wonderful television programme in which Jim Hacker gave out an efficiency award to a hospital that was fully staffed and fully equipped but without any patients. It is bad enough to have a white elephant building in the district, but if that building has services attached, it is so embarrassing that people will fill it and use the service even though, clinically, the need for that service may well have been superseded.
  A valuable point was made about the community care element developing much greater units to look after older people than we would like to see, because that is the only condition under which the private sector is prepared to deliver that service at the cost that we are prepared to provide. That is a big lesson for us about the PFI.
  I am very disappointed that an amendment to restrict the PFI element for trusts to their NHS services was not accepted. With the way in which the regulations are set out at the moment, there is an enormous risk that a trust encouraged by a private sector partner may develop yet another private wing. We have one in my local hospital and it has lost an enormous amount each year. That loss has to be found from the money that goes in, which should be spent on the NHS and acute services.

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  The Bill is, I am afraid, too short. It is nice to have a short Bill, but it needs to define slightly more what it is trying to do. The Labour party has not spent the past 18 years working out an alternative to the PFI to get more capital funding into the NHS, which many other public services get.
  When the Deputy Prime Minister was in opposition, he used to appear frequently on the "Today" programme, telling us that the public sector borrowing requirement was an artificial straitjacket and that he had all sorts of schemes to get round it. There are indeed schemes to get round it, and I hope that some will be found. The idea of having a bank for the health service estate makes tremendous sense. Assets could be held against the borrowing by the organisation very much along the lines of housing associations, which receive both private and public money. It would be a very good way to expand our building programme.
  I urge the Minister to look at the amendments that we tabled. He clearly needs the Bill to pass through the House. It is essential that a number of projects start, but I would not want the Bill to be an indication of the Government's intent towards public and private partnership for the NHS, as it gives the wrong message to patients in the NHS and certainly to all of us who work there.
  9.17 pm
  Mr. Peter Atkinson: I do not share the Liberal Democrats' concern about the Bill. It is a relatively simple matter. The concern of most of us is where the Government will go with the private finance initiative.
  I listened very carefully to the Minister, particularly to the end of his speech and the "soundbitey" section where he said that the Government would fulfil the people's priorities for the health service. The question that I ask him is the question that the people of Hexham ask me: will they will get a new general hospital?
  Hexham general hospital was proceeding towards a successful conclusion in the PFI when the Minister put it on to the "do not proceed" list. There was widespread anger in the area when that happened, because the people of Hexham had campaigned for years for a new district general hospital. When it was within our grasp that we would get one, it was then put on the "do not proceed" list. The campaign had run for six years. There are cars throughout the constituency that still have stickers on the back saying, "Save our general hospital service in Hexham". It is a huge concern to the people locally because Hexham district hospital serves one of the largest rural catchment areas of any hospital, ranging from some of the most isolated parts of the country right up to the boundaries of the city of Newcastle. It is the only hospital that lies between Newcastle and Carlisle. Therefore, if patients have to go for treatment in Newcastle, in many cases it will mean a 60-mile round trip. The Minister will appreciate that the hospital is of enormous importance.
  There was a feeling in Hexham that the hospital was doomed. It is a small district general hospital and there are real problems in maintaining adequate levels of service in such a small hospital. The feeling was that the national health bureaucracy did not like small hospitals and that it thought that big was always beautiful.
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  It was an exciting idea when the previous Government agreed that the district general hospital at Hexham should be linked with a large teaching hospital in Newcastle—the Royal Victoria infirmary—in a joint trust. All the support services of a big, expert and nationally recognised hospital could help the small district general hospital fulfil its important health care role. The consultants would travel from Newcastle to Hexham rather than patients having to travel from Hexham to Newcastle to see consultants. It was an imaginative idea. Only better physical surroundings were needed.
  The hospital—I hope that the House will forgive me for perhaps being parochial, but I am raising an important local issue—was a wartime emergency provision. It was built to treat soldiers who had been wounded during the second world war, who returned for long periods of treatment. The majority of the buildings date from that period. Providing an adequate level of health service in such physical surroundings is extremely difficult. The maintenance staff have perpetual nightmares over provisions such as heating to keep the building warm during the winter for the benefit of patients.
  Within the core fabric that I have described, however, is an excellent hospital. The nursing and medical care is renowned. The people of Hexham and of surrounding areas value the hospital as a facility of enormous importance.
  There was great concern about the way in which the hospital was scored under the new prioritising system that the Government have produced. It scored three out of five on the health services scale. That is what the people of the hospital cannot understand. The service provided by the hospital is of supreme importance and those concerned feel that such a low score cannot possibly be right. It may be that because the area scored well for those hospitals that were approved there was concern about putting too many schemes forward at one time, thinking that the area would have too large a share of the cake, and accordingly Hexham was scored down.
  The hospital has appealed, if that is the right word, against the rating of three out of five. I wish the Minister to give an assurance that he will revisit that scale. If the hospital does not feature in the next wave, to be announced in the spring, we shall have real problems in providing an adequate health service in a rural area.
  The building has not had maintenance money spent on it because a new hospital was within sight. It is clearly not sensible to pour a large amount of money into the fabric of a time-expired building, but if there is now a huge delay in reconstruction there will be difficult times in maintaining patient care in Hexham.
  This is not merely a parochial matter. The hospital treats 10,000 or more patients a year. When the reorganisation of health services in Newcastle was planned, the near closure of the Newcastle general hospital was based on the ground that many patients would continue to be treated in a hospital on the site at Hexham. If Hexham were to fail to operate, that would have a severe implication for medical services throughout Newcastle.
  I ask the Minister to accept that it is essential for the people of Hexham that they have a new hospital. They hope earnestly that he will ensure that provision for such a hospital goes forward in the next phase that he has announced today.
  9.24 pm
  Mr. Michael Jack: This has been a useful and informative debate on the next stage of the private finance initiative in the national health service.
  It is important to reflect on and respond to some of the points that the Minister made when he dealt with my intervention. Delay in achieving major hospital projects is nothing new. Despite having the biggest ever capital expenditure programme for NHS hospitals, the previous Government still had one major hospital project worth £25 million every year.
  The problem that the Minister did not mention was that it used to take on average 10 years from the inception of an idea to the fruition of a project for a major district general hospital. The idea that delay has suddenly become the order of the day because of the private financial initiative is unnecessarily and unfairly misleading.
  Mr. Milburn: The right hon. Gentleman asked about projects worth more than £25 million that have been given the go-ahead. The better comparison is with projects that are worth more than £38 million, because that is the value of the lowest capital development in the schemes for which I have just given the go-ahead. He may be interested to know that only two hospitals with such a value were built in the past five years. He should be a little cautious about trumpeting the previous Government's success.
  Mr. Jack: We can all trade numbers, but the Minister reminded us that all he has done is to give the go-ahead to continue to negotiate. There is no guarantee that on any particular date in the next 18 months that he cares to give us, any or all of those projects will have been completed to a financial close. The Minister's intervention does not lessen my point that delay in bringing complicated projects, such as hospitals, to fruition is not a new phenomenon.
  The Minister was a little unfair to the private finance initiative. He gave a somewhat one-sided view, and forgot to remind the House that the initiative is already doing excellent business outside the health service in the provision of prisons, roads, underground trains, information technology systems, Government accommodation and universities. It provides millions, if not billions, of pounds of public investment and gives better value for money.
  That brings me to the central point of the private finance initiative. I doubt whether some Liberal Democrat Members have understood and focused on the purpose of the process. Its purpose is to buy services for the public using a method that gives better value for money than the old, conventional method of public procurement. If one starts from that point, it makes a great deal of sense. In no way does that simple formulation corrupt our fundamental belief that the national health service should provide treatment to patients free at the point of consumption. There is no conflict. I shall have more to say about the formulation of the hon. Member for Southwark, North and Bermondsey (Mr. Hughes).
  Mr. Simon Hughes: I accept that the PFI does not necessarily determine the quality of service and the fact that it is free to patients. Does the right hon. Gentleman accept that one of the questions that must be answered is whether deferred payment under the system of private
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  finance—payments over time—will be much more expensive in the long term than the alternative, which is to pay now? It may be difficult to find the money immediately, but at least the payment would be less.
  Mr. Jack: Deferred payment over time—a sort of hire-purchase arrangement—would not be private finance; no accounting officer would agree with that. We are talking about payments over time for services rendered, against a given specification of output. It is no longer my task to explain that to the House; it is the Minister's task—but I am glad to see him nodding in agreement.
  My hon. Friend the Member for Orpington (Mr. Horam) put his finger on why we are here this evening. He rightly reminded us of Hammersmith and Fulham, a Labour local authority that walked away from its obligations. Hammersmith and Fulham sowed the seeds of doubt in the financial community. [Interruption.] If the hon. Member for Lewisham, East (Ms Prentice)—who is trying to attract my attention from a sedentary position—wants another example, let me remind her of the real reason why we are having this debate. Deutsche Morgan Grenfell observed what Allerdale council had done—as late as January this year: it took as long as that for it to wake up to the situation. Labour was the largest party at the time, and subsequently ran the authority. In more recent times, it was Allerdale that walked away from a timeshare arrangement, bringing the issue of vires and public bodies into question. That is why we are debating the Bill, which my party thoroughly supports. My hon. Friend the Member for Orpington did the House a great service in reminding us of such action by local authorities.
  My right hon. Friend the Member for South Norfolk (Mr. MacGregor) also did us a service by reminding us how hard he had campaigned for his local Norfolk and Norwich hospital. When I was at the Treasury, my right hon. Friend was a stalwart campaigner on all aspects of that issue. I am sorry that the hon. Member for Dartford (Dr. Stoate) is not in his place. Our former hon. Friends Jacques Arnold and Bob Dunn did heroic work to ensure that the Dartford project reached the stage that it has now reached.
  Perhaps the Minister will learn a lesson if he recalls what his right hon. Friend the Member for Camberwell and Peckham (Ms Harman) said some time ago when we—who were then in government—had the temerity to put Dartford and Gravesham hospital on what we called a B list. In those days, two and a half years ago, we had a ranking system. We were chastised and accused of watering down the project in some way, but—because we let the thousand flowers grow—Dartford and Gravesham bloomed a darn sight faster than many other projects. It matured rapidly, proving to be an excellent PFI project, and is now one of the "flagship" and "pathfinder" projects that the Minister seeks to make his own, as though he had done all the hard work. In fact, all the hard work was done by those in the NHS trust, by my former hon. Friends and by others who helped to advance the project.
  I do not blame the Minister for trying to capture one or two early points of success. He is a good Minister, but he has his own ambitions: he wants to get things done. We also wanted to get things done. As the Minister will know from his officials, a process of rationalisation was undertaken to ensure that the best projects had the best chance of making it to the end. We will probe the Minister a little about his attitude to, for example, the so-called

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  affordability gap. Addressing that problem was germane to ensuring that some projects stood a real chance of making it to the finishing line.
  We also want to probe the Government on another issue. Instead of allowing local people to generate local projects, meet local needs and make their own progress, the Bill and the mechanism outlined by the Minister will bring back, centrally, the strategic NHS hospital programme. We want to know more about how that will work.
  In a telling speech, my hon. Friend the Member for Stratford-on-Avon (Mr. Maples) told us, when dealing with the important subject of clinical services, that he had advised the Government not to become "boxed in". I asked the hon. Member for Dartford—who is a doctor—about one aspect of clinical services: I asked him whether haemodialysis was a clinical service. I think that he said yes. The publication, "Private Opportunity and Public Benefit" describes the provision of haemodialysis treatment by South Tees acute hospital trust on the Darlington Memorial hospital site. The Minister chose not to mention that, which is sad. He will know the detail of that excellent PFI project. It is on his doorstep and it provides his constituents with clinical services. I have never heard it said that it is not a clinical service or that in some way it is not a PFI project. The Minister might usefully draw on the example of a service that is plainly benefiting his constituents.
  Dr. Brand: Will the right hon. Gentleman give way?
  Mr. Jack: No. I should like to bring my speech to a close.
  That shows that under the private finance initiative clinical services are already making a contribution. I do not blame the Minister for thinking carefully about this important issue and I look forward to hearing his future definition.
  At the centre of the Bill is the issue of giving legal certainty to those who wish to provide finance for hospital projects under the PFI. We are taking an important step to remove doubt, and it is a pity that the banks did not express their reservations earlier. If they had, we would have been able to bring more projects to fruition quicker. I am glad to be able to welcome the Bill.
  The Minister chastised us when he said that the nasty Tories had made a complete mess. He said that all the delays were due to us. [HON. MEMBERS: "Hear, hear."] Before the Minister joins in the "Hear, hears", perhaps I should say that I shall not break the confidences that were shared with me when I was a Treasury Minister. Before the debate, I looked at old papers on this matter. I remind the Minister that on one of the projects mentioned in the debate the developers decided to change the contractual arrangements so that they could obtain tax benefit. The trust became involved and decided that it wanted to look at the specification with a view to increasing the number of beds by about 100. The contractors suddenly decided that they wanted to put in a large claim for extra operational costs over the life of the contract.
  The Minister should look at why there have been delays, because some of them were not the fault of the Conservative Government: they were due to a combination
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  of factors involving local hospital trusts and the construction industry and its bankers. He will learn to understand the difficulties in PFI contractual negotiations. These are complex matters, but in giving the Bill a Second Reading we are taking an important step to removing the last legal impediment to an important process whose foundations we put in place.
  9.37 pm
  Mr. Milburn: I am grateful to the right hon. Member for Fylde (Mr. Jack) for his support for the Bill and to hon. Members in all parts of the House who have taken part in this wide-ranging debate. I remind the House that the Bill is a simple, short and effective measure with a single purpose—to get new hospitals built. It is intended to unlock the PFI gridlock that has built up in recent years in the NHS.
  The Bill's secondary purpose is to re-establish the confidence that has been so badly dented in the NHS and in the private sector in the ability of public-private partnerships to work for the benefit of patients. The Bill is not the final word on the PFI or on the future of public-private partnerships in the NHS. The aim of the review is to get such issues right in future. I assure the hon. Member for Isle of Wight (Dr. Brand) that we shall return to this issue. I am happy to receive views from hon. Members on both sides of the House about how we can take such partnerships forward.
  The hon. Member for Southwark, North and Bermondsey (Mr. Hughes) complained that the Bill was progressing too quickly and accused the Government of arrogance in trying to get the Bill through this evening. Where has he been for the past 18 years? Has he visited some of the communities that have been waiting for these hospitals, which are long overdue, much needed and now have the chance of going ahead? We need to get on with it. Without the Bill, there is a simple alternative: those hospitals in Norwich, Dartford and elsewhere would not be built. It is as simple as that.
  Mr. Simon Hughes rose—
  Mr. Milburn: I know that the hon. Gentleman wants to speak later, so, if he can just contain himself, I will continue.
  Some hon. Members referred to specific projects in their constituencies. The right hon. Member for South Norfolk (Mr. MacGregor) talked about the important Norfolk and Norwich hospital. He said that the endless arguments in the local community are the reason for the delay. The reason for the delay has nothing to do with endless arguments in the community. It is about the need to tie up the technical, legal and financial niceties and the Bill is an important step in that direction.
  My hon. Friend the Member for Norwich, South (Mr. Clarke) made some important points about the process leading up to where we are now in relation to Norfolk and Norwich hospital. I understand some of the concerns in the community, particularly in the city of Norwich, about the location of Colney hospital and about the process surrounding the PFI. We are seeking to address those concerns, but there is a simple alternative for the people of Norwich and of Norfolk: either to go ahead with the Colney PFI or not to have a new hospital.

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  Whatever reservations and concerns they may have about the process, above all, people in Norfolk and in Norwich want their new hospital. Of course we will try to co-operate with the city council and with others in trying to address the concerns to which my hon. Friend the Member for Norwich, South alluded about the future of primary care and about proper access to the site, but it is time to look to the future rather than harking back to the past.
  Dr. Ian Gibson: Does my hon. Friend agree that, besides giving first-class care to the people of Norfolk and Norwich, the localisation of the hospital on the research park will attract world-class research institutes and perhaps even a postgraduate medical school, which will provide badly needed jobs for the people of Norfolk and Norwich?
  Mr. Milburn: My hon. Friend is right. The Norfolk and Norwich PH deal will not just improve the quality of patient care in Norfolk and Norwich, but provide economic regeneration opportunities. I look forward to that added value developing in the next few months and years.
  Mr. MacGregor: I agree with that. When I was talking about delays, I was looking back over many years and it was the siting that caused those delays. We must above all avoid that happening again, so will the Minister confirm that the meeting that I referred to, which gave the impression that the siting was being reconsidered, is wrong and that there is no question but that the site should be at Colney?
  Mr. Milburn: I confirm two things. First, there is a simple choice: Colney or bust. The people of Norfolk and Norwich want Colney—they want a new hospital. Secondly, frankly, it is extremely important that any Government address community concerns. I am intent on doing that. I want to open up the PFI process, and we will come to that when we discuss some of the amendments. It is important that we re-establish the confidence not just of the private sector and the NHS in the PFI, but of the community—the public—because we are talking about their hospitals and their health service. I hope that I can be helpful in dealing with some of the concerns expressed by my hon. Friends and others in Norwich.
  My hon. Friend the Member for Norwich, South raised some general concerns about the need to be open and accountable in relation to the PFI. Our review of the PH and future partnerships between the public and private sectors will include that point. Environmental considerations are important and they will be properly taken into account.
  My hon. Friend the Member for Wakefield (Mr. Hinchliffe) referred to the danger of becoming locked into outdated forms of care if we go down the PFI route. That is a real concern on both sides of the House. However, whether a hospital is provided through the PFI or through the public sector, there is a danger of getting locked into inappropriate forms of care. That is why it is important, as the hon. Member for Orpington (Mr. Horam) said, that we design buildings, especially hospitals, in a more flexible way so that they can have a variety of purposes and be geared accordingly.
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  We need only look back over the past 30 or 40 years to see the changes in the nature of health care in this country. If we look forward 30 or 40 years, the possibilities are endless—but so are the dangers. That is why flexibility in building design will be extremely important.
  My hon. Friend the Member for Dartford (Dr. Stoate) invited me to a sod-cutting ceremony—if that is the right phrase—and I would be delighted to cut a sod with him in Dartford. He expressed concern about the future of staff interests, as did my hon. Friend the Member for Wakefield. He referred to some of the services that, potentially, could be transferred to the private sector under PH deals.
  As I have already made clear, we have ruled out any clinical services being part of a PH deal. We have ruled out radiology and pathology being any part of a PFI deal. We have also said this evening that there will be a proper review of other services in order to produce a definitive dividing line between clinical and non-clinical services. That is extremely important and it will help to deal with a number of concerns.
  The hon. Member for Orpington railed against prioritisation and accused us of cancelling a whole host of hospital projects for which he had responsibility when he was a Health Minister. He told the House, and me in particular, that we needed to be more rigorous about rooting out poor PFI projects. He is right—we do need to be more rigorous. We need to ensure that if public money is going into the health service through any sort of capital development, it goes to the projects that are most needed. That is why we will prioritise projects on the basis of NHS need, not on the whim of the market and not on the basis of a consortium and trust cobbling together a deal that manages to pass a number of Treasury hurdles. We will prioritise on the basis of clinical, patient and strategic need. I hope that the hon. Gentleman will welcome that and stop carping about the prioritisation exercise.
  The hon. Member for Stratford-on-Avon (Mr. Maples) produced a long litany of quotations from former Labour spokesmen about the PFI. The one thing that he did not quote was Labour's manifesto at the general election. It is important, so I will remind him of what it said about the PFI:
  "The Tory attempt to use private money to build hospitals has failed to deliver. Labour will overcome the problems that have plagued the Private Finance Initiative, end the delays, sort out the confusion and develop new forms of public private partnership that work better and protect the interests of the NHS."
  The hon. Member for Stratford-on-Avon may have difficulty with the concept, but we believe in keeping our promises. We are keeping our promises: we are unlocking the PFI gridlock, we will end the uncertainty, we will build hospitals and we will develop new forms of public-private partnership.
  The hon. Member for Stratford-on-Avon and the right hon. Member for Fylde talked about the success story of the previous Administration's hospital building programme. If they will take a bit of advice from me, I suggest that a bit of humility would not come amiss. In the past five or six years, using the public sector route, the previous Administration managed to build only two major hospitals. Moreover, under the previous Government, not a single new hospital was built using the PH route—although an endless raft of self-congratulatory

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  press releases was issued by Richmond house. I am interested not in issuing press releases or in making promises or talking about building hospitals but in building hospitals and in delivering the goods, for the good of patients.
  The hon. Member for Stratford-on-Avon made a point—to which several hon. Members returned—on cancellation. I can tell them that projects that have not been prioritised in the first wave will still have an opportunity to progress and that no project—whether it is in Hexham or anywhere else—has reached the end of the road. In future, however, NHS regional offices will examine projects proposed for their area and determine which meet the greatest health service need. Patients' needs and genuine health service needs—not the ability of private sector consortiums and trusts to cobble together a deal—will drive the hospital building programme.
  I know that there are pressing needs in Hexham and elsewhere across the country, and the Government want to re-examine some of those projects.
  Mr. Maples: The Minister had a go at the previous Government's hospital building programme. Will he give the House a cast-iron, 100 per cent. assurance that any one of the 14 hospitals that he has listed will be built?
  Mr. Milburn: I give a cast-iron guarantee that not a single hospital would have been built if we had not prioritised. For four or five years, the previous Administration tried with the PFI to build hospitals, but they did not succeed. I am confident that the pathfinder schemes will result in new hospitals being built in the communities that need them.
  I have been clear from the outset, however, that the Government—as guardians of the public purse—will not accept a deal at any price. I will not hesitate to cancel projects that fail to deliver on time or at the right price. I do not think that the hon. Member for Stratford-on-Avon would expect me to do anything other than that.
  The Bill is a very important measure and is urgently needed. The NHS and local communities are tired of empty promises and of hospitals that are planned but never built. The Bill will help to forge a constructive partnership between the public and the private sectors, harnessing the strengths of both. I think that it provides an excellent foundation for the future. Above all else, it will achieve something that has not been achieved in the past five years: building new, much needed hospitals in the communities that need and deserve them.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 63 (Committal of Bills),
  That the Bill be committed to a Committee of the whole House.—[Ms Bridget Prentice.]
  Question agreed to.
  Bill immediately considered in Committee.
  [SIR ALAN HASELHURST in the Chair]

Clause 1

  POWERS OF NHS TRUSTS TO ENTER INTO AGREEMENTS
  9.54 pm
  Mr. Simon Hughes: I beg to move amendment No. 11, in page 1, line 13, at end insert—
  '(aa) he is satisfied that the agreement has been the subject of full public consultation in the area which it is to effect; and'.
  The Chairman of Ways and Means (Sir Alan Haselhurst): With this, it will be convenient to discuss amendment No. 5, in page 1, line 15, at end insert
  'and
  (c) the agreement has been approved by the health authority for the relevant area'.
  Mr. Hughes: Both amendments are about consultation. They stress the importance of ensuring that PFI projects are the subject of full public consultation in the area affected, which is the import of amendment No. 11, and that they have been approved by the health authority for the relevant area, which is the import of amendment No. 5.
  There are two substantive points to make. The first is that there is at present no adequate provision in law for consultation. Lord Ezra moved a similar but not identical amendment in another place. The Minister's reply was that there had to be consultation with the community health council. That is a statutory form of consultation, but it does not of itself guarantee that the public are involved in any significant way. Community health councils have an appropriate watchdog function, but there is often a much wider interest engendered than that in the community health councils. Some are very good; some are not.
  We have to go further, and not just because it is right to do so as a matter of principle. What Baroness Jay said in another place was insufficient. She said that she would consider extending the consultation further, and I hope that the Secretary of State will say that he has thought about what that means, and that, if he cannot accept the amendment, he will read into the record a guarantee of proper consultation in the community.
  The first substantive point is that there is absolutely no point in consulting people and then blatantly ignoring what they say, which is a regular experience in the health service.
  I cite a constituency example. A couple of years ago, there was a consultation exercise on proposals put forward by the Guy's and St. Thomas' hospital NHS trust about what to do with the services at Guy's hospital. More than 1,000 responses opposed the proposals and 20 supported them, 17 of which had a vested interest in their going ahead. The public were effectively ignored. It is like the Duke of York leading people to the top of the hill and then down again. It is not good enough. Consultation means that there is a duty to take into account what people say; if one does not, one should explain why not.
  Secondly—I cite the same example—we all know that private finance initiative schemes often start off as one thing and end up as something else. It is no good

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  consulting on scheme 1 if what comes out the other end is scheme 2. Between scheme 1 being consulted on and scheme 2 being agreed, the project often goes to the board of the trust. It then becomes commercially confidential, and we are told that we cannot know what is going on because it would prejudice either the tenderers, when there are several, or the final negotiation.
  The final product becomes something entirely different, which goes against the principle of consultation. It is no good any hon. Member or any Minister, new or old, pretending that that does not happen, because it does. I seek an assurance that any scheme that reaches the stage of final consideration will have been the subject of consultation in the form in which it was originally proposed.
  The hon. Member for Lewisham, East (Ms Prentice), who is on the Government Front Bench, represents a constituency in the same part of the world as mine. She knows that, in the constituency example that I R gave earlier, the proposal that emerged after discussions with the local contractor provided for fewer beds and facilities than that originally consulted on. Thomas Guy house at Guy's hospital has just begun to be opened in the past few weeks. What is going into it is not what was originally planned. The ground rules have changed.
  I have accepted that what the Minister has said is progress. Outline business cases were all meant to be secret. Once they were agreed and discussed, they went between the local trust, the regional outpost, the Treasury and the Department of Health—all in secret and without the chance for questions. That is not good enough. We must arrive at a system in which we consult widely at the beginning.
  It being Ten o'clock, THE CHAIRMAN left the Chair to report progress and ask leave to sit again.
  Committee report progress.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),
  That, at this day's sitting, the National Health Service (Private Finance) Bill may be proceeded with, though opposed, until any hour.—[Ms Bridget Prentice.]
  Question agreed to.
  Again considered in Committee.
  Question again proposed, That the amendment be made.
  Mr. Hughes: After that traditional interruption, we can go on a bit. I think that the hon. Member for Lewisham, East realised that we had not made much progress. We were being generous by not forcing a Division on that motion.
  I want to press the Government on what the Minister of State said in his press notice of 10 June, which he probably does not remember offhand. I shall remind him. In that press notice, and in a parliamentary answer, he said that information about outstanding PFI projects should be made available by trusts unless that would affect on-going negotiations. I welcome that. He also said that trusts should include information about their proposals and actions in their annual reports.
  Will the Minister elaborate on that? He will realise that the definition of an on-going negotiation can cover almost everything. Most trusts would say that they could not say anything if negotiations were going on. Indeed, most
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  trusts have said that. What the Minister has offered is therefore not much of an advance on the present position. I say that not in hostility, but from experience. We are often given the answer, "I am sorry, we cannot tell you. This is about on-going negotiations."
  We want better and wider consultation. On that basis, the Government could easily accept the amendment. I hope that they will do so, and will not regard it as problematical. The Minister should be brave, regardless of what his brief says, and decide that the amendment is straightforward and can be included. I look forward to that as a helpful sign of things to come.
  The second issue that I should like to raise is also important. My hon. Friend the Member for Richmond Park (Dr. Tonge) may also want to talk about it. There is growing concern about the provision in clause 1(3):
  "The Secretary of State may give a certificate under this section if—
  (a) in his opinion the purpose or main purpose of the agreement is the provision of facilities in connection with the discharge by the trust of any of its functions".
  I think that the Minister will know what I am about to say. Under the National Health Service and Community Care Act 1990, there are two ways in which trust functions can be defined. Having looked at the legislation, I am surprised that we can define them in such a way as to exclude any reference to providing NHS services. I am concerned about that. I have not misread the provision, because that concern has been expressed by others, specifically by consultants and consultant associations. It means that one could have a PFI scheme that had nothing to do with NHS functions.
  We need to be alert to that, because we have been down that road before. When the water companies were privatised, we found that, before too long, a lot of the new water authorities were doing all sorts of things that had absolutely zero to do with the provision of water. I accept that they used to be involved with fishing and things like that, but suddenly they were running hotels, tourist facilities and boating lakes.
  It is an important matter, and I specifically ask the Minister to consider it. If he cannot address that problem now, the substantive 1990 Act will have to be amended to ensure that we do not run the risk of PFI proposals that have nothing to do with NHS core services being approved because the law allows that.
  That is the specific reason why we need consultation. Later tonight, we will have a debate about clinical services, which is controversial. There may, for example, be a proposal by a trust to run a residential home with no nursing care. The community health council might say that that is not the job of a local NHS trust, and that council certainly should be consulted about such proposals.
  In relation to a trust's plans, we should know who is consulted, at what stage in the proceedings, and about what. We should also be clear about the extent of the trust's activities and how far they deviate from the NHS provision. I hope that the Minister will give a positive response.
  Dr. Jenny Tonge: I should like to expand on the remarks of my hon. Friend the Member for Southwark, North and Bermondsey (Mr. Hughes).

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  The National Health Service and Community Care Act 1990 contains two options. Most trusts were set up under the first, under which they were given the functions of owning and managing what had previously been NHS hospitals. Under the second option, or the alternative, they were given the function of providing and managing hospitals and other facilities.
  It is my understanding, and that of many of my colleagues in the health service, that the second alternative function was given in 1996 by the previous Secretary of State to those trusts that were engaging in PFI schemes. It is of great concern to us that, because that provision persists, a loophole may exist to allow private companies to provide more and more private facilities in conjunction with NHS trusts. That would mean that NHS facilities would have to piggy-back on huge private provision.
  I have every sympathy with what the Government are trying to do to get the new hospitals built, but my colleagues and I urge them to consider the great danger that exists. We could choose that second option as a means of delivering health care. It has been taken by many European countries and used to excess in the United States.
  I know, however, that the Liberal Democrats want properly planned health provision, and I have always assumed that everyone on the Government Benches wants the same. We do not wish to slide unwittingly into private health care. I am not clear, therefore, whether the Government really understand what they are doing. I say that cautiously, because I know that they have a great deal of experience. I hope that they have thought about it a lot.
  I beg the Minister to reconsider. The Bill is not strong enough without, or even with, the amendments. We must ensure that the health service functions are defined clearly before it passes into law. We must ensure that the trusts know exactly what they should be providing. We do not want to allow the PFI to be the gateway towards a slide to privatisation.
  Dr. Vincent Cable: I support my hon. Friend the Member for Southwark, North and Bermondsey (Mr. Hughes). I recognise that many Liberal Democrat and Labour Members face a dilemma over the legislation. There are crumbling hospitals, and the only option on offer is an unacceptable system of financing.
  The dilemma in my case is particularly acute, as I share a district hospital, the West Middlesex, with the hon. Member for Brentford and Isleworth (Mrs. Keen). The problem is painfully apparent. The hospital has been in physical decline almost since it was first erected as a workhouse in the 19th century. In many parts of the third world, it would already have been closed as unfit for human habitation. People feel so passionately about it that, a few years ago, our local health service campaigners staged a hunger strike to demand that the hospital be rebuilt.
  But there is only one proposal on offer. The public consultation that has been offered, although probably more extensive than in many other cases, has been perfunctory. The perfunctory public consultation consisted largely of a public meeting, attended by about 50 people. We were essentially asked to take on trust the judgment of the hospital managers, and to accept that there was no alternative to the mechanism.
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  I have resolved the dilemma by today writing to the Minister of State to support the hospital trusts and to support the appeal of my neighbour, the hon. Member for Brentford and Isleworth, for the PFI to be reconsidered. It narrowly missed the cut by one place. Given the options available, that seems to be the sensible way forward.
  Many of our anxieties about the proposal could be eased if proper mechanisms for public consultation were built into the legislation. There are two main arguments about public consultation. The first is that, even in areas such as mine, which is desperate for a new hospital, the public need to be reassured about many things. We are talking about the permanent disposal of public assets, and about economic mechanisms that are questionable even on a common-sense level.
  Many of the contractors involved in the PFI, including the ones involved in my case, are used to operating on an international level. They have the option of PFI projects in Malaysia, Thailand or China, where they can get a 20 per cent. return. They are looking for the same sort of returns here, and those returns will have to be paid for. Although the PFI enables them to get round the limits on capital expenditure, five or 10 years down the track there will be an enormous recurrent burden on the trusts, and it is not at all clear that they will be able to sustain it. A process of explanation to the public is badly needed to ensure that the mechanism is properly understood and sustainable.
  Amendment No. 11 is geared to building in a statutory strengthening of the public consultation process. Amendment No. 5 aims to build in the role of the health authority. The health authority is necessary, for two reasons. First, the authority carries with it an obligation to consult the community health councils. The CHCs are often not particularly dynamic institutions, but they are repositories of understanding, experience and commitment to the NHS.
  Building in a mechanism for obligatory consultation with the CHC creates an important safeguard. By making it necessary to clear such matters with the health authorities, we create an embryonic planning surveillance. As we understand it, many of the PFIs are not satisfying the test of strategic need.
  The Minister of State may be familiar with the valuable research that appeared in the British Medical Journal in April. It gave a dispassionate review of the progress of many of the PFIs. In each case, the assessment showed that the bed reduction was roughly 20 to 25 per cent. removed from the status quo—often way below the health authority's planning assumption. We therefore believe that public consultation and health authority provision is a necessary safeguard that should be built into the legislation. Were that available, many anxieties about the legislation would be eased.
  Two years ago, a rudimentary system of public consultation was built into the NHS code of practice. We are essentially asking that the spirit of that code of practice should be honoured and entrenched in this legislation.
  10.15 pm
  Mr. Donald Gorrie: The duty of this place, as I see it, is to try to ensure that our public services are run in a democratically accountable fashion. The best way to do that in the health service would be to

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  make democracy penetrate, which it does not at present. There is no democracy in the health service at all, and until we change that, which is the Liberal Democrats' goal, we will have to make do with consultation. I therefore strongly support the notion of having better consultation written into the Bill.
  That is especially necessary because my experience in Edinburgh is that there is often a dispute between the public perception and the wishes of the important consultants who drive projects through in the health board. All professions have their own politics, and in medical politics there is a great deal of aggrandisement of people's professional opportunities. Doctors are human, too, and some of them have strong Napoleonic tendencies.
  In Edinburgh, there is a private finance initiative proposal to renew the Royal infirmary on a new site and there is strong thrust behind having it as big and as all-purpose as possible, at the expense of other hospitals. Public opinion is in favour of greater diffusion and of having more services, for example, at the Western General hospital. That hospital is to have directly funded—not PFI—facilities, which is a welcome step on the part of the Government.
  It is necessary to have really good public consultation to determine the public's views on, for example, the siting of maternity services—whether to have one huge facility, or two facilities, which is what most people want. In order to counter specialists' legitimate professional drive, it is important to have good consultation—but the only real answer is to have some democracy.
  Mr. Milburn: I am grateful to Opposition Members for reminding us of the principle that important decisions taken about private finance schemes—or, indeed, any major change in the national health service—should not be taken by politicians or bureaucrats locked away in ivory towers, without any consideration for the public who will use, or at least have to live with, the new hospital planned for their community. Nor should decisions be taken without the full involvement and support of the health authorities responsible for planning local health care strategies. I agree with those principles, but I cannot support the amendment.
  Arrangements already exist to ensure public consultation on significant changes in the health service, which may well be the result of a major private finance initiative scheme, and to ensure full health authority involvement in taking PFI schemes forward. In addition—this is an extremely important point, which I hope Opposition Members will heed—our review of the PFI will specifically address how better to engage both health authorities and the public from the outset of proposed PFI schemes.
  For any PFI scheme to receive a green light, it must demonstrate strategic health need, and the public have to be properly consulted about the make-up of their local health service. There is a simple maxim: the public have a right to know what is being planned for their local health service, because it belongs to them. It does not belong to trust management, and certainly not to private consortiums; nor does it belong to Minister sitting in Richmond house.
  We have taken an important first step. As the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) was good enough to acknowledge, a
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  circular was recently issued to the NHS which had annexed to it the text of two parliamentary questions that I had answered about public information being provided by the NHS about PFI schemes. The circular also asks the NHS to be as open as possible and to give as much information as possible, as long as it is compatible with commercial confidentiality.
  Amendment No. 5 is unnecessary, because all health authorities must already provide formal support for PFI schemes, and must do so well before the Secretary of State comes to certify an agreement. When a scheme is submitted to the Department of Health for approval of its full business case, the health authorities which are the main purchasers from the trust must provide the Department with a formal statement of their support for the scheme.
  The amendment would add nothing to existing arrangements, therefore, and I give Liberal Democrat Members a clear assurance that the Government will not allow a PFI scheme that lacks formal health authority support to proceed.
  Amendment No. 11, requiring the Secretary of State to satisfy himself that full public consultation had taken place before he issued a certificate, is unnecessary for similar reasons. When I recently announced the wider review of the PFI and health—the hon. Member for Southwark, North and Bermondsey mentioned the speech I made and the press notice that was issued—I said that, in future, we would have to be satisfied that schemes had taken due account of the needs and wishes of local communities.
  I am more than happy to reiterate that promise tonight. No PFI scheme that involves a significant change in services will be allowed to proceed unless a proper consultation exercise has been carried out.
  Mr. Simon Hughes: I am grateful to the Minister. We hope to respond to what he says, and obviously we shall not push things if he is able to assure us. Can he tell us, first, whether that promise applies from now on and immediately, and not only at the end of the review? Secondly, can he confirm that a proper consultation exercise has not been carried out if only the health authority and community health council have been consulted?
  Mr. Milburn: Of course I want full and meaningful consultation to take place, and when there is a significant change in the make-up of local health services being planned for the local community, of course it is right and proper—indeed, a statutory obligation—for health authorities to consult the local community health council.
  Whatever Liberal Democrat Members think, I believe that, by and large, CHCs do an extremely good job as the patient's watchdog, and have a duty to represent the interests of the patient when it comes to the major changes in service provision that a PFI scheme, especially a new hospital, represents. Although it is impossible to consult every member of the public about every major change to the provision of local health services, I would expect key stakeholders to be consulted in future, and I say to the hon. Member for Southwark, North and Bermondsey that in future, when significant changes in services are proposed, we shall expect that proper consultation exercise to be carried out.
  Mr. Hughes: I am just trying to ensure that I am clear in my mind that this will apply from now on, and not only

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  from the end of the review. The Minister may be about to come on to this point, but if the scheme changes, as schemes often do, must there also be consultation on the changed scheme, if anything has happened that counts as a significant change?
  Mr. Milburn: There is already a vehicle for local stakeholders—the CHC, local trusts, local commissions, local authorities and others—to make representations. That is the annual contracting process between the purchaser and the provider, in which the health authority must assess whether developments that are taking place in providers are appropriate to meet local health care needs.
  The hon. Member for Twickenham (Dr. Cable) referred to the recent British Medical Journal article about bed numbers. When it comes to annual contracting between the health authority and the trust, I would expect issues about bed numbers to be properly considered. Other stakeholders should have an opportunity to be involved in that process and make appropriate representations.
  The other important issue raised by the hon. Members for Southwark, North and Bermondsey and for Richmond Park (Dr. Tonge) was trust establishment orders. I am well aware of the concerns. Indeed, I have met ACHCEW—the Association of Community Health Councils for England and Wales—on a number of occasions to try to deal with its concerns directly.
  We propose to issue directions to NHS trusts to make it clear that their income generation activities should not be to the detriment of their NHS patients. The 1990 Act is extremely clear: the interests of NHS patients come first, and the primary duty of NHS trusts is to look after the interests of NHS patients. Income generation activities, including private patient facilities, are secondary. I hope that the directions we propose to issue in the near future will help to address some of the concerns that have been expressed tonight.
  The Bill's purpose is to provide reassurance to the banks that propose to lend into the PH that NHS trusts have the power to enter those contracts, and it has the support of those banks.
  I wish to make a general point at the outset of our Committee stage. To introduce amendments for which there is no substantive need achieves precisely nothing, and serves only one purpose: to create uncertainty on the face of a Bill intended to eliminate doubt. I hope that Opposition Members will bear that in mind.
  Mr. Simon Hughes: I am keen that we should act in good faith. On amendment No. 5, I accept what the Minister said about consultation with health authorities. He may have worked out already that the original intention was that we should have proper consultation at regional level, but, because the Government inherited no regional health authorities and have not yet put them back, they cannot consult something which does not exist and which I have not yet persuaded them to re-create. I therefore accept that the lower health authorities are not there to be consulted.
  On the consultation issue, we accept that the Minister's response is a sign of his good faith. I simply ask that, before the guidance is finalised, we can discuss those issues with him and offer our practical experience of how
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  changes in the process mean that we must be very careful. Sometimes, the annual contracting process, or the annual report, does not occur sufficiently quickly, and the ball game changes between the time when the proposal is made and when the decision is taken. On that basis, and given the Minister's willingness to have the widest possible consultation with the appropriate people, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Mr. Jack: I beg to move amendment No. 1, in page 1, line 15, at end insert
  'and
  '(c) he is satisfied that all the terms of the agreement have been finalised and that the necessary finance has been committed:
  and no certificate given under this section may subsequently be withdrawn or amended.'.
  I hope that the Minister will take this amendment in the spirit in which it was tabled—as a constructive contribution to make his new arrangement work better.
  The terms under which a certificate can be granted are not defined in the Bill. If the circumstances under which the Secretary of State can grant a certificate were more tightly defined, that would benefit the Minister and the Secretary of State, and help them achieve their objective of using this useful piece of legislation to ensure that they not only gave comfort to the banks, but enabled all the ducks of the agreement to be put well and truly in a proverbial row.
  Granting the certificate is important and it confers the ultimate seal of approval on any deal. It says to those who wish to become involved financially in an externally financed development agreement that, legally, it is all right to do so. In my earlier remarks, I hinted at the problems that private finance deals have faced in the past. At the last minute, bankers have entered the negotiations and sought additional gain by reopening the discussions.
  10.30 pm
  Our amendment seeks to ensure that the Secretary of State does not grant a certificate until he is satisfied that all the terms of the agreement have been met and, importantly, that the necessary finance has been committed. In the past, the finance appeared to be in place, but sudden disagreement between the construction side of the consortium and the bankers led to the bankers' withdrawing and the project falling to pieces. The Secretary of State should make it clear that, although he has the power to grant the certificate, he will not do so until all the necessary elements are in place. That would be the ultimate carrot, and would ensure that deals were concluded properly.
  The remaining part of the amendment states:
  "no certificate given under this section may subsequently be withdrawn or amended."
  It addresses a perceived deficiency in the Bill. Although it may never be the Secretary of State's intention to deny granting the seal of approval, the Bill does not say that. In theory, we believe that an assurance that no certificate given under this section may subsequently be withdrawn or amended provides added security for the financial contracting parties to the arrangement and underpins further the benefits of the legislation.

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  I hope that the Minister will confirm the circumstances under which the Secretary of State will use those powers. We believe that our amendment is constructive. It would add value to granting powers by way of certificate and ensure that deals, once arranged and negotiated fully, proceeded to financial closure. The fact that there could be no alteration or amendment thereafter would add greater certainty to the legislation.
  Mr. Richard Allan: I hope to persuade the Committee of the importance of the finality issue, which is introduced by the amendment, in terms of local health planning. Most of my criticisms will be directed at the previous Government's handling of capital investment in the national health service. However, if this Government are to improve matters, they must learn from those failures and respond to them in the legislation.
  I shall illustrate my point by referring to the example of Sheffield's proposed new hospital for women, to be situated on the Stone Grove site. Despite achieving a top mark in terms of NHS need, it was not chosen for fast-track development. The Minister kindly received the delegation comprising me and the hon. Members for Sheffield, Attercliffe (Mr. Betts) and for Sheffield, Hillsborough (Helen Jackson), and explained the decision to us. I shall not rehearse the issues tonight, but I hope that the proposal will qualify for the substantial public funding that the Minister said that his Department would generously provide.
  The history of the project to replace Jessop hospital, where I was born, demonstrates the need for Government to make any future decisions final and binding. The new hospital was proposed more than 10 years ago, when the PFI was only a twinkle in the Prime Minister's eye. Four or five years ago, the parties were on the verge of signing a Treasury-funded deal but, in response to NHS guidelines, they decided to wait a few months for the outcome of a local strategic review. By the time that review backed the project and found that it would meet desperate local need, the rules had changed again. The parties were sent down the "thousand flowers" route, pursuing the elusive quarry of a new publicly funded hospital—which was rather like joining the previous Government in a hunt for a unicorn.
  At the time, the trust was given a written guarantee that Treasury funds would be made available if its PFI bid failed. The Minister in question is no longer able to deliver that funding and the new Government do not seem willing simply to pick up those responsibilities. Once again, we have another change in the rules governing funding for capital projects.
  I accept that the Minister has a genuine desire to improve funding arrangements and make them better in future, so I urge him to accept the amendment as a sign of his genuine commitment to local health planners, as it would give them complete confidence that once a certificate was signed, it would be honoured. Let us avoid a repeat of the disappointment that is felt by people in Sheffield as they suffer delays in much needed facilities as a result of the rules changing every time they get a project together.
  Mr. Milburn: I assure the hon. Member for Sheffield, Hallam (Mr. Allan) that I understand the very real concerns in his city that the project did not get the
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  go-ahead in the first wave. I can also tell him that it is recognised that the project has a high strategic health need. It will be considered with other schemes for possible prioritisation in the future. The whole idea behind the prioritisation process is to do just what the hon. Gentleman wants—to bring clarity where it has been lacking, to sort out the confusion and to bring certainty to the national health service and the private sector.
  In future, schemes across the country that are regarded as having the highest strategic health service need will be chosen and prioritised and then driven through the PFI. In future, the PFI process will really deliver the goods. The problem, as we heard earlier, was that too many projects were in the pipeline. The previous Government simply were not able to deliver them all. One of the most telling speeches in our earlier debate was made by the hon. Member for Orpington (Mr. Horam), who urged me to be more robust and to prioritise. That is precisely what we have done. I am convinced that, in future, there will be much greater clarity, and as a consequence we shall get more hospitals built.
  Mr. Simon Hughes: Does the Minister accept, then, that there must be a regional element in strategic planning? If he is holding to his view of a fortnight ago, that there will not be any re-creation of democratic regional authorities, how is there regional strategic assessment involving the public and not just the bureaucrats in the regional outposts?
  Mr. Milburn: Just on a small point of detail, there were never democratic regional health authorities. It is certainly not our intention to re-create the regional health authority structure, but we shall ask the regional offices of the national health service to undertake a full, impartial, fair and objective assessment of capital development schemes in their areas. When they have assessed where the highest strategic need is in their regions, those schemes will be submitted for prioritisation nationally. Once they have been prioritised nationally, we shall seek to make progress on them.
  To overcome the problems that the hon. Gentleman addressed earlier, on public consultation, I reiterate that we shall expect any major NHS changes to be subject to full, public consultation at the appropriate point. It is pointless doing that before prioritisation, because if a scheme is not to be prioritised, there is no point in consulting on it. If it is to be prioritised, there is, of course, a need to ensure that the scheme has backing not only from the national health service and the private sector, but, most important, from the local community. I can give the hon. Gentleman the assurance that I think he seeks.
  Mr. Hughes indicated dissent.
  Mr. Milburn: Obviously, not quite.
  Mr. Hughes: That was a fair and straight answer, but does it mean that, at regional level, at the appropriate stage—I use the example of my hon. Friend the Member for Sheffield, Hallam (Mr. Allan)—my hon. Friend would be able to know what the region was thinking and have some input into the regional process, and that it would not happen in secret, behind closed doors and involve only those who work for the NHS?
  Mr. Milburn: That access to information will not be at regional level. It will be at trust level and health

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  authority level. I agree that, all too often, the PFI process has been shrouded in secrecy. I accept that and I am determined to stamp out such secrecy. I want the process to be as open as possible. We must get the balance right, however, between public openness and ensuring that there is no risk to commercial confidentiality. I shall get that balance right, and I give an undertaking that in future the health authority and the trust concerned will be consulting widely and taking Members and other representatives into their confidence. Indeed, I have asked them to do that already, and the process has already begun. It is a process that will continue in future.
  Dr. Brand: Does the Minister recognise that there are some services of concern to the public that go wider than the area covered by one health authority or trust? I am thinking about radiotherapy services, which are both vital and capital intensive. Access to them is extremely important to people throughout a region. I hope that we shall see something more proactive from the Minister's Administration than we saw from the previous bunch of Ministers.
  When the regional outpost was pushed to give a lead on where it would like to see investment in a new site, for example, it washed its hands of the matter and said, "This is a matter for local trusts and districts to negotiate." That is clearly not a satisfactory way of establishing a vital service. Members of the public should have a say on whether the facility is to be based in a part of the region that is accessible and to which they can relate.
  Mr. Milburn: If there are services that cross trust and health authority boundaries and which impact substantially upon the make-up of local NHS services, consultation should take place as a matter of course. That should be happening already as a matter of course. I shall, of course, consider the specific matter that the hon. Gentleman has raised with me.
  I hope that I have satisfied some of the concerns that have been expressed from the Liberal Democrat Benches. I shall now take up the matters raised by the official Opposition. I appreciate the concern of the right hon. Member for Fylde (Mr. Jack) to ensure that the Secretary of State does not certify what might be described as a dud contract. Legally, however, the amendment does not achieve anything.
  Part of the amendment would require the Secretary of State to be satisfied that the terms of the agreement had been finalised. In law, that is approaching gobbledegook, and I shall explain why. Certification is precisely that which confirms that an agreement is an externally financed agreement for the purposes of the Bill. Until then, there is no agreement within the terms of the Bill. The Secretary of State may reasonably be expected to ensure that the commercial contract for a PFI deal has been signed before he certifies that contract as an externally financed development agreement—for short, an EFDA—and he will do that in any event.
  I shall move on further down the PFI process to explain how the amendment would be inoperable, for it would require the Secretary of State to satisfy himself that the necessary finance had been committed. It is a point that the right hon. Member for Fylde was keen to stress. That
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  would have to be done before the Secretary of State certified an agreement. That requirement would again be legal gobbledegook.
  I know that the right hon. Gentleman recognises that the purpose of the Bill is to reassure bankers who are considering putting up capital for private finance schemes in the NHS. Bankers will be willing to put up capital once an agreement has been certified, but not before. The amendment would merely serve to ensure that bankers refused to finance NHS schemes, thus undermining the purpose behind the Bill.
  The rest of the amendment is beside the point. It states that no certificate, once given, could be withdrawn. I am advised that once an agreement has been certified, it is once and for all an externally financed development agreement. If the certificate were withdrawn, it would have no effect, as the original act of certification would have conferred permanent validity on the agreement.
  The amendment also stipulates that a certificate, once given, could not be amended. As I said, once a certificate has been given, it is a once-and-for-all EFDA. That is not to say that there would be no circumstances under which the certificate, as drafted, might cease to apply to at least part of the agreement. Under those circumstances, recertification could take place, and we do not need to legislate for that.
  10.45 pm
  Mr. Jack: The Minister has just said something intriguing. He said that there may be circumstances under which part of an arrangement could be subject to recertification, but that no legal mechanism is required to enable that to occur. Would he be kind enough to describe a circumstance in which such a process would operate, and to tell me how the Secretary of State would address the problem?
  Mr. Milburn: The obvious example is when one of the facility providers in a PFI deal either withdraws or is unable to fulfil its part of the contract, for whatever reason. The EFDA will have been given against a whole PFI deal, but will inevitably cover specific parts of it, so if an element comes adrift for whatever reason, recertification may be necessary. The original certification would have been given for a PFI deal, part of which was no longer operable. Those are the circumstances that I envisage, but frankly it is a pretty minor point.
  Mr. Jack: May I press the Minister on that point? He is giving the impression that deals can be subdivided. It was my understanding that a certificate was granted in respect of bankers, who may be external to any service provision in which other parts of the consortium providing the PFI may be involved. The bankers provide the money. If two bankers were involved and one of them ran into a problem and was unable to provide the money, would the mechanism that the Minister has just described work?
  Mr. Milburn: There are endless possibilities. The basic point is that if an EFDA has been given and a PFI deal has been certified, and subsequent to that, a component of the PFI deal comes adrift, the deal may need to be recertified. Frankly, that is not a major issue.
  Part of the amendment is unnecessary, part is beside the point and the requirement to confirm finance before certifying the agreement would stop the hospital building

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  programme in its tracks. For those reasons, I invite the right hon. Gentleman to withdraw the amendment. If he does not, I invite the Committee to reject it.
  Mr. Jack: We have had an interesting insight into what we can prise out of the Minister when we propose a straightforward, simple and helpful amendment. We have discovered a new dimension to the potential granting of not just one certificate but subsequent certificates under various, perhaps obscure, circumstances in which the nature of the provision of parts of a contractual arrangement changes.
  It would useful if the Minister were to consider publishing explanatory guidance, to ensure that those who read in Hansard the slightly uncertain explanation of the variations on those terms know exactly where they stand. I remind the Minister that the whole purpose of the legislation is to remove doubt about the legality of entering into financial arrangements. We have seen an interesting scintilla of what might happen if something went wrong.
  The Minister said that the Secretary of State would not use the mechanism unless all the financial ducks were in a row, but, on the basis of experience, I think that the Secretary of State could derive added value and advantage from making it absolutely clear that, unless all the promises of finance were in place, a certificate would not be granted. It might happen the other way round: the bankers might say, "We will provide the money, subject to the Secretary of State's signing on the dotted line." We need further clarification.
  I am, however, at least 75 per cent. satisfied that a final lock on the use of the legislation is provided by the Bill as currently drafted. Subject to the Minister's agreement to make a clear public statement about the second point that he raised, perhaps in a parliamentary answer—he nods; I am grateful to him—I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Dr. Brand: I beg to move amendment No. 6, in page 1, line 15, at end insert
  'and
  (c) in his opinion the agreement is compatible with the fair distribution of capital and revenue spending within a regional strategic framework.'.
  The Chairman: With this, it will be convenient to discuss the following amendments: No. 7, in page 1, line 15, at end insert
  'and
  (c) the agreement has been subject to a public and published report by the Audit Commission who shall give their assessment of the value for money provided.'.
  No. 2, in page 1, line 15, at end insert—
  '(3A) The Secretary of State shall not give a certificate under this section unless he is satisfied that the agreement meets the criteria published pursuant to subsection (3B) below and the National Audit Office has confirmed that those criteria have been met.'.
  No. 3, in page 1, line 15, at end insert—
  '(3B) The Secretary of State shall publish details of the criteria which must be met before an externally financed development agreement is certified under this Act, including criteria relating to—

  (a) value for money;

  (b) risk transfer;

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  (c) affordability;

  (d) adequate prior consultation;

  (e) such other relevant considerations as he may think fit.'.

  Dr. Brand: I have been told that I must not talk about my previous and current jobs, but I was delighted to hear the Government commit themselves to abolishing two-tierism in the NHS. I am, however, a little worried by the announcements that have been made about the PFI to date. There is clearly two-tierism in capital development in the NHS. Projects that are "PFI—able"that, apparently, is a new term that we must all learn—can go on to their own list and climb up it, and if they are lucky and reach the top 14 they will succeed, but we have heard nothing about the assessment of other schemes within regions which are just as essential. Are those schemes being assessed? Are they being considered for public expenditure?
  It is not just a case of finding the capital; it is running the service that will take up the resources that are so desperately needed, and if there is to be some sort of resource allocation system, account must be taken of future needs. We discussed that at length earlier.
  We also spoke earlier about the need for a regional overview. It is no good allowing schemes to go ahead in one part of a region because the private sector is particularly interested in juicy ways of generating extra income for a particular trust, or for the erection of a particular set of PFI buildings. As I said earlier, there is also the question of the distribution of regional services, which should go where clinical need is greatest and not necessarily where the private sector believes that the PFI can generate more money.
  We are not asking for something impossible. I am sure that the Minister already has this in mind, but I am a bit concerned that we have heard nothing from him about the effects that the PFI is having on other new services which need to be developed in the NHS.
  Mr. Jack: I hope that the Committee will not mind if I spend some time on our amendments in the group. I have some important points for the Minister. Our amendments provide a two-part check and balance on whether the deal that the Secretary of State is sanctioning, via the mechanism that is the subject of the Bill, fulfils his objectives.
  Because of the importance of the PFI mechanism and its role in the health service, there is a need for the National Audit Office to become involved. To date, the Government have shown no reluctance to involve the NAO in some important issues. The Chancellor of the Exchequer used it to underpin some of his Budget assumptions, and if he is prepared to use it, the Secretary of State for Health might be tempted down that road.
  The NAO submitted a memorandum to the Select Committee on the Treasury when it considered the private finance initiative. I shall quote briefly from that to give weight to our amendment. It states:
  "Although the NAO's investigative work on PFI projects has just begun, it is quite clear that a key issue will be the way PFI projects handle risk: who bears what risks, how much risk traditionally borne by the public sector is transferred to the private sector, and at what price."
  That issue is central to many of the proposals that will be implemented through the private finance initiative which is certified by the mechanism with which the Bill

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  deals. Our amendment seeks to qualify the way in which the certificates should be issued and shows the importance that we attach to such matters in the context of risk and risk transfer.
  The National Audit Office has already demonstrated the role that it can play and it has been consulted by Departments in the recent past on the matters that we are debating. The Minister has said that he is planning some substantial changes to the way in which the PFI operates. He spoke about what he called new public-private partnerships. He is thinking about new mechanisms and I appreciate that at this stage they may be only a small glint in his eye. However, a glint means that he has an idea and perhaps he can say whether those mechanisms would come under the definition of externally financed arrangements and would be subject to the amendments.
  The Minister has shown that he attaches great importance to the private finance initiative. In Library research paper 97/88 the Minister is quoted as saying that
  "the truth is that when there is limited public capital, it is PFI or bust."
  The "or bust" bit worries me because is shows a cavalier desire to achieve his objectives come what may. That is why our amendment sensibly suggests the checks and balances that the NAO would provide. That would make sure that the Minister did not go too far down the road of becoming bust. The benefit of the NAO's views would add value to the proceedings.
  On 10 June, the Minister spoke to stakeholders on looking at other possible models of structuring private finance schemes. I was interested that he wanted to improve value for money. That again is one of the aspects of our amendment, so I ask him again to give the Committee some insight into exactly what the other ideas that he is considering are. It is good to be innovative, but I want to make certain that we cover all possible contingencies. A tick in the box from the NAO would be extremely helpful. As I have said, it has been useful in giving examples of what is good practice to other Government Departments.
  11 pm
  Amendment No. 2 interlocks with amendment No. 3 in saying that the use of the procedure that we have outlined depends on all of us having a clear idea of the criteria that will be deployed to achieve the Bill's stated aims and other relevant issues. The Minister placed in the Library a document entitled "Review Criteria". I wanted to find out a little more about how he was going to approach the question of what would or would not be a PFI arrangement and, by means of a parliamentary answer, he confirmed to me:
  "The criteria for measuring health service need is expected to be similar to that used to assess service need in the recent Private Finance Initiative prioritisation exercise, copies of which have been placed in the Library."—[Official Report, 10 July 1997; Vol. 297, c. 577.]
  I was grateful that the Minister did that because it gives a clear insight into some of the reasons why we have tabled the amendment.
  Paragraph 10 of the document discusses "service need". It leads us to probe carefully what criteria the Minister and the Secretary of State for Health will follow in
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  determining the way in which the PFI operates. In listing a number of factors that the Minister will take into account, why has he not distinguished in any way, shape or form the statistical weighting that he attaches to these criteria? From the way in which he has laid out the document,
  "improved clinical quality of services"
  carries precisely the same weighting as
  "improved strategic fit of services".
  Will we get a more detailed explanation of exactly what all these factors mean? What exactly does "improved" mean in
  "improved clinical quality of services"?
  Improved relative to what? Will the Minister publish data that will enable us to come to conclusions?
  On quality of services, I have asked the Minister questions in another context about the word "quality". So far, quality is not a statistically defined word or term that the Minister has been prepared to use, but, if we are going to have stated criteria, as our amendment suggests, we need to have this information published and in considerable detail, so that we may follow the matter more closely.
  The same could be said of other items here. I could go through them in detail, but I will not. I want to pick out just one or two things that are particularly important. "Improved strategic fit" of services is mentioned. Liberal Democrat Members may be interested in probing that subject as it goes to the heart of the matter. How exactly will the Minister's new mechanism to determine future PFI projects—the ones that are the subject of his further representations and of further PFI arrangements, and which may ultimately be the subject of public capital arrangements—fit into this wonderful phrase "improved strategic fit" of services? Bearing it in mind that the Minister has brought back in-house the whole question of the way in which hospital investment will operate, he owes it to the Committee to let us into the secret of what "improved strategic fit" means.
  The projects on the Minister's winners list are very interesting. North Yorkshire, the north-east, north Durham, Bishop Auckland and south Tees are all winners and, I am sure, worthy projects, but they are awfully close to each other. The Minister may wish to correct me, but my understanding is that an independent consultants' report asked some searching questions about whether the Bishop Auckland project was viable. The Minister may say that subsequent to the health authority receiving that report, the project was amended and became viable. What we do not know is how Darlington hospital, in the Minister's constituency, now fares with the arrival on the winners list of Bishop Auckland.
  Does the Minister intend to use some sort of Paretean criteria in deciding future winners in his strategic overview? A case could be made that worthy as north Durham, Bishop Auckland and south Tees are, until we have a better insight into what the wonderful phrase "improved strategic fit" means, we shall have no idea of the criteria and whether they will lock on to a good private finance initiative project.
  Will the Minister publish a Green Paper which would allow all of us to contribute our views to the debate that he wants on the grand strategy that he is now devising?

  141
  Will he publish a White Paper laying down in clear, unequivocal terms, not only what "improved strategic fit" means, but what
  "provide better access to services"
  means? That is an important point in relation to the criteria which are the subject of our amendment. Does
  "provide better access to services"
  mean—to go back to my hon. Friend the Member for Hexham (Mr. Atkinson) who, sadly, is not in his place—more Hexhams, where we reduce the distance people have to travel to acute NHS hospitals? Does it mean removing services from regional centres and spreading them around so that people can get easier access? Or does it mean having fewer district general hospitals, but with better services so that access to them therefore provides better access to services? It is that sort of vague phraseology that needs to be tied down if, when devising new criteria, the exercise is to be more transparent—to pick up on the Minister's words—and be seen to be what it is. It is extremely important that we have that information.
  It is also extremely important to look at another phrase,
  "make more effective use of resources."
  What would be the Minister's reaction, in the context both of risk valuation and of getting better value for money by making more effective use of resources, if in his new world he were to receive non-compliant bids from organisations which had been invited to compete for private finance initiative projects?
  I refer the Minister to section 10 and to schedule 2 (6)(1) of the National Health Service and Community Care Act 1990, which provide that NHS trusts should obtain value for money. Later in the debate, my hon. Friend the Member for Stratford-on-Avon (Mr. Maples) will deal with the matter of clinical services. What will happen in a situation, however, in which the Minister has defined all the criteria that will guide his decision-making process but in which a consortium submits a bid that does not comply with his criteria and yet demonstrably provides the best value for money, perhaps by including a range of clinical services?
  Under the new criteria, what would the Minister or the Secretary of State do to comply with those provisions of the 1990 Act? Would such a bid be in or out? If the Minister is to achieve his objective of making more effective use of resources, he will definitely have to answer those questions.
  As amendment No. 3 states, risk transfer will be a very important criterion. As the Minister knows, risk transfer is very much to do with putting health care provision in the hands of whichever part of the health care equation can best handle it. More specifically, the design risk of a hospital, for example, would be best handled by the private sector partner. In his reply, I hope that the Minister will tell us whether there will be any changes to the already published PFI documentation, which provides clear guidance on risk transfer. Does he propose to maintain that guidance, to change it or to put different mathematical weightings on the risk that he thinks should be transferred?
  The Minister knows also that there is a fundamental problem in PFI affordability, because of the differential way in which the NHS deals with the write-down of capital over 60 years and PFI projects operate for periods between 20 or 30 years. He knows also that a substantial
  142
  sum will have to be allocated to his winners list so that they can make the grade. He told us, however, that subsequent schemes will have to be affordable without the provision of any further central support. Will he highlight how, in his new world, that affordability gap will be closed? Unless he changes the criteria in the NHS—which, so far, he has not said that he will do—the matter of smoothing affordability, as he described it, will remain.
  I think that I have said enough to show clearly—
  Dr. TongeHear, hear.
  Mr. Jack: I am glad that there is so much support. Having had a modicum of responsibility for operation of the PFI, I can tell hon. Members that, if we do not very carefully define our terms and criteria, not only will those who are trying to do business under the PFI not know where they are going, but the NHS will not be able to achieve its objectives. I therefore look forward to the Minister shedding some light on the issue.
  Mr. Simon Hughes: I shall speak briefly to amendment No. 7 and the question of an Audit Commission report, but I must tell the right hon. Member for Fylde (Mr. Jack) that neither my hon. Friend the Member for Richmond Park (Dr. Tonge) nor I dissent from the proposition that we need to know what the criteria are to be—my hon. Friend was simply suggesting that the Conservative spokesman had made his case adequately on that point.
  The Audit Commission has already done some useful work on the PFI and has shown itself to be competent, interested and able, and it might well be better that an existing body be given the responsibility rather than our creating new bodies or setting up quangos to do the job.
  11.15 pm
  The important point about amendment No. 7, which is not dissimilar to amendment No. 2 tabled by the hon. Member for Stratford-on-Avon (Mr. Maples), is that the report should be public and published and that, given criteria that we all understand, the value-for-money assessment should be considered regularly by the body which does the assessment throughout the whole procedure. The Minister might come back to us and say that he has something else in mind, or the review may show that another body could do the job—that is fine, but one of the things that the health service desperately lacks is independent, objective, consistent accountability. We have to build that in, because I am never prepared to trust any Government with the statistics and the assessment of what goes on in the health service, and I do not think that the public are, either.
  Mr. Milburn: I pay tribute to the right hon. Member for Fylde (Mr. Jack), who has great knowledge of and expertise in these matters. He made some extremely important points about affordability, risk transfer and value for money. Those matters are currently dealt with by the PFI process, as he knows. However—I say this advisedly—the right hon. Gentleman is in some danger of putting the cart before the horse. I remind him that the purpose of the Bill is to get existing PFI deals delivered.

  143
  I take no pleasure in saying that the previous Administration failed in that, and I am not going to repeat those mistakes.
  The first stage in the process of getting new capital development under way in the national health service is to get the Bill on the statute book, to get deals delivered and then to move on. We shall certainly be looking at different forms of public-private partnership and at ways to improve the PFI as one form of that partnership. The right hon. Member for Fylde asked me for details on how we might do that. We shall be considering a number of issues in our PFI review.
  We shall try to ensure that we no longer go through the endless process of reinventing the wheel when it comes to PFI documentation. One of the real boons of recent years is that because of the steep learning curve that I described earlier, a mass of information and expertise is now locked in the system, and it is important to take advantage of it so that NHS trusts no longer have to reinvent the wheel for every PFI they enter into. That is why standardisation of documents and contracts will form such an important part of the process in future.
  Similarly, I should like improved competition in the PFI and more bidders in place for longer during the PFI process. Such competition might help to improve value for money from the point of view of the public sector and from that of the taxpayer. These will be the subject of detailed further consideration when we undertake our PFI review. I repeat the invitation that I issued earlier: I am happy to receive representations from right hon. and hon. Members of all parties and, indeed, from my right hon. and hon. Friends to ensure that there is a full consultation exercise that takes account of as many views as possible from the House and from the public and private sectors.
  The right hon. Member for Fylde went into detail about the criteria that had been used for the initial prioritisation exercise. The criteria may not apply as fully and in the same detail to the next round of prioritisation. It is important for him to understand that at the outset.
  The right hon. Gentleman asked for transparency. He has a bit of a cheek, given the lack of transparency from the previous Government on the private finance initiative, most notably their failure even to publish the number of PFI deals under consideration, the number in the pipeline and their assumed capital value. We have put that right and we shall ensure more openness and transparency in future. In that spirit, I assure the right hon. Gentleman that there will be criteria, appropriate weighting and a proper process for future prioritisation exercises. I shall ensure that those criteria are made fully available so that the public can see that the assessments undertaken by the region and the capital prioritisation group in the NHS executive are done fairly and objectively.
  Mr. Jack: I am grateful to the Minister for his kindness in answering one half of the range of questions that I asked. One of our amendments deals with the National Audit Office. I understand the Minister's reluctance to go all the way, but can he assure me that the National Audit
  144
  Office's expertise might be used at least in a sampling operation to ensure that deals done under the new arrangements meet his criteria?
  Mr. Milburn: If the right hon. Gentleman gives me a moment or two, I shall come to the point about the NAO and the Audit Commission when I deal with the amendments individually.
  The right hon. Gentleman referred to the north-east schemes. It is important to set the record straight. He knows full well that the decisions on Northern and Yorkshire schemes were taken by my right hon. Friend the Secretary of State. I absented myself from those decisions, for reasons that are crystal clear. It was important that I should do that. All the schemes that the right hon. Gentleman highlighted—south Tees, north Durham and Bishop Auckland—had been well highlighted for many years as front runners for the PFI. I do not believe that there were any surprises there, although if the right hon. Gentleman has information to the contrary I should be happy for him to share it with me.
  During the previous 17 years, from 1980 to 1997, just two new hospitals were built in north-eastern England. I am pleased about my right hon. Friend's decision, because it means that the region, together with others, will catch up. We shall provide long-overdue facilities not just in my part of the world but in communities up and down the country.
  Some of the issues that the right hon. Gentleman has highlighted may appear in another guise, but that is a subject for further consideration. I assure him that our criteria will be made publicly available.
  I shall now deal with each amendment in turn, starting with amendment No. 6. We can sign up to the fair distribution of revenue and capital. As the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) is well aware, we want to ensure a fairer distribution of NHS resources. In particular, we want to ensure that NHS need is properly taken into account in the allocation of resources for secondary and primary care services. I shall make a further announcement about that in due course.
  However, I am afraid that there are fundamental problems with the amendment. The first concerns its drafting. It refers to the need to ensure that the agreement is
  "compatible with the fair distribution of capital and revenue spending within a regional … framework."
  I am afraid that terms such as "compatible", "fair distribution" and "regional framework" are very imprecise. Frankly, it is that lack of precision, aside from any other factor, which makes it impossible to accept the amendments. The PFI has already been lawyer-fest and they have done very well out it. The last thing that I intend to do is to give lawyers yet more business. That is why I am determined that the Bill should be properly and precisely drafted.
  Mr. Simon Hughes: I declare my interest as someone who trained and practised as a lawyer. The Minister cannot have it both ways; one cannot have plain English on the one hand yet reject things that are drafted to be absolutely plain. The Minister must certify that any agreement is fair, within a regional strategic framework and compatible. If he cannot do that, it is his problem, not ours. We think that the amendment is clear.
  Mr. Milburn: I am sure that the hon. Gentleman thinks that it is clear, but I am afraid that it does not stack up.

  145
  It is by no means clear whether the amendment—I am happy to be advised on it—contemplates simply ensuring equality between trusts within each region or more general equality between all trusts by using a regional strategic framework. I am unclear; I guess that NHS trusts would be unclear, and certainly the private sector would be unclear. The only people who would be making business from that lack of clarity would be the aforementioned lawyers.
  We can be quite sure that the Bill is not the means by which to address such issues. As I said recently, in future we will prioritise capital schemes. In doing so, we will take health service need as the driving force. We want a well-thought-out and rational capital expenditure policy that covers PFI schemes and publicly funded schemes. Above all, any consideration of the proper allocation of resources to trusts needs to take place long before the agreement is submitted to the Secretary of State for certification.
  The amendment does nothing to improve the fair distribution of resources, however the hon. Gentleman defines fair. I am afraid that it suffers from being hopelessly imprecise. I know that the intentions behind it are good, but I am afraid that when it comes to defining words on the statute book, good intent is not quite good enough. It would introduce a further element of uncertainty into a Bill that is designed to end that. I therefore ask the hon. Member for Isle of Wight (Dr. Brand) to withdraw the amendment. If he will not do so, I invite the Committee to reject it.
  Amendment No. 7 refers to the assessment by the Audit Commission. The Secretary of State's certification identifies that an agreement is an externally financed development agreement, an EFDA, under the terms of the Bill. That certification will usually take place when the contract is signed between the NHS trust and the private sector. For that reason, the Audit Commission cannot assess the value for money of an agreement in advance of its certification since there will be no legally binding agreement for it to assess.
  The hon. Member for Southwark, North and Bermondsey will be aware that the Audit Commission's main task is to audit expenditure already incurred and decisions already taken, not to provide a form of guarantee in advance that a particular proposal represents value for money.
  The right hon. Member for Fylde asked about the National Audit Office. It will not examine an agreement retrospectively to assess its value for money. I am more than happy for either the Audit Commission or the NAO to consider PFI deals for value for money. I positively invite them to do so. We have nothing to hide.
  We believe that if a PFI deal has been certified, by definition it gives improved value for money and improved risk transfer for the public purse. If the right hon. Gentleman and the hon. Member for Southwark, North and Bermondsey are seeking further assurance about the role of the NAO and the Audit Commission, I am more than happy to invite them to scour each PFI deal to which we give the go-ahead to re-establish that confidence in the process about which I spoke earlier.
  The hon. Member for Southwark, North and Bermondsey might want to bear in mind a final point about the Audit Commission. The amendment would require the commission to publish its value-for-money assessment of a proposed scheme, but it would not require
  146
  the commission's views to be taken into account. Of course, Ministers always have due consideration for Audit Commission reports; it is an extremely important body and its reports are extremely influential, but, as drafted, the amendment does not give the hon. Gentleman what I suspect he wants—for me to take on board the Audit Commission's views. For those reasons, I invite him to think again, save the Committee a bit of time, allow us to make progress and not press the amendment.
  11.30 pm
  On amendment No. 3, there has been more than a little reinventing of the wheel. The criteria that have to be met before a PFI scheme is allowed to proceed are well known. They include criteria referred to in the amendment, including value for money, risk transfer and affordability. All those factors have to be taken into account well before an agreement is certified. In particular, they have to be taken into account when the Department of Health is asked to approve the full business case for a PFI scheme. Unless the criteria are met, a scheme will not be allowed to progress beyond that point and achieve certification.
  The requirement for adequate prior consultation proposed in the amendment is an odd and subjective test. The right hon. Member for Fylde has just been giving us his views on subjectivity and on the need to improve objectivity. When he reconsiders the amendment, I am sure that he will agree that its wording—where it calls for "adequate prior consultation"—is inadequate. As I said, as part of our PFI review, we shall certainly want to look again at consultation arrangements to secure the right balance between the maximum public openness and the minimum risk to commercial confidentiality.
  I shall turn finally to amendment No. 3—[Interruption.] I am pleased that my hon. Friend the Member for Leeds, East (Mr. Mudie), the deputy Chief Whip, supports me in my endeavours. As I have not been in favour of amendment No. 3, it follows that I shall not be in favour of amendment No. 2. Criteria such as value for money are considered before my Department or, indeed, the Treasury, approves the full business case for a PFI scheme. The amendment simply enshrines in law what already happens and, in doing so, complicates the Bill without achieving any changes in practice.
  For all those reasons, I invite the right hon. Member for Fylde not to press his amendment. If he will not do so, I invite the Committee to reject it.
  Dr. Brand: We shall not press amendment No. 7 to a Division. But it would be good if the Minister could give an undertaking that the Audit Commission's annual management letter will be published. The Audit Commission considers the NHS and its effectiveness; it would be a good sign of open government if that letter were to be published.
  The Minister has been reassuring all night, but he has lost me on amendment No. 6. I am not a lawyer, so I am not qualified to assess such things, but the amendment is absolutely clear. It states that we expect the Minister, before acting as final arbiter of a PFI scheme, to ensure that "PFI-ability"—as the night goes on, that phrase becomes more difficult to say—does not milk resources from other essential developments that a region needs. We have not received a reassurance on

  147
  that matter. The PFI cannot be taken in isolation, distinct from other capital and service developments. I should therefore like to stress that the amendment is necessary.
  The other important issue is an acknowledgement that there is a need for a regional strategy. I hope that, in pressing the amendment, we will have the support of the Deputy Prime Minister, who I know has a great interest in regionalisation.
  Mr. Jack: I am grateful to the Minister, whose response to our points has been very courteous, for stating that he is to publish the details of the criteria outlined in amendment No. 3. However, I did not hear the hoped-for assurance that he would go a little further in terms of the details that he will provide. The point about publication is to press him to go beyond the rather bland statements in the criteria he used to select the 14 projects that are now able to proceed with negotiations.
  The Minister looks pained—he is probably tired, because it is the first time he has been up as late as this. I know that it is difficult to concentrate on these matters, but those of us who have a genuine interest in those who need new hospitals will continue to press the Minister until he is alert to answer our questions. We need some numerical or objective measures to understand what are his new criteria.
  Mr. Milburn rose—
  Mr. Jack: I shall give way in a minute. The Minister is a careful man and I have always admired the care with which he addresses the House of Commons. However, I would remind him of the terms he gave me in a reply, in which he said that the new review would be a bit different from the existing one. He stated that
  "the criteria for measuring health service need is expected to be similar to that used to assess service need in the recent Private Finance Initiative prioritisation exercise".—[Official Report, 10 July 1997; Vol. 297, c. 584.]
  That and other answers to parliamentary questions definitely led me to believe that there would be more than a passing similarity to the points made here. Can I tempt the Minister to the Dispatch Box to satisfy me on that point?
  Mr. Milburn: The right hon. Gentleman has anticipated what I was going to say. We expect the criteria to be similar, but we will be making decision in due course. When we have made the decision, we will, of course, publish the criteria.
  Mr. Jack: I hope that that detail will be available to us, because it is very important. Our amendment No. 2 states:
  "The Secretary of State shall not give a certificate under this section unless he is satisfied that the agreement meets the criteria published",
  and then we simply listed those. The Minister said the amendment was not necessary because the criteria would have had to be satisfied in the first place. My interpretation of our amendment is that that was the starting point of the exercise and that, once the criteria had been published, the
  148
  Minister's view of the world would then prevail—but, by definition, it could not prevail until the criteria had been published. We shall watch carefully for the details.
  I am grateful to the Minister for including the National Audit Office in the process and I agree with the way in which that has been done. I remind him that his comments on the question of having standard-form contracts in future borrow entirely from the successful policy we introduced into the Prison Service—or at least, we were getting there, but we were overtaken by events. There was a template arrangement in the Prison Service and I am glad that he borrowed from our good practice.
  On the question of value for money, risk transfer and affordability, my comments about the Northern and Yorkshire region were not meant as a personal criticism of the Minister. However, he did not respond to my important point. My reason for pressing him was that he will achieve neither value for money nor affordability until he can answer questions such as: will having three new district general hospitals in a tight geographic area have any deleterious effect on the existing hospitals such as that in Darlington? Health experts have led me to understand that, as a result of that expanded capacity, there will be surplus capacity in Darlington that will have to be funded.
  We shall look for the opportunity cost factors that will be involved in the exercise that the Minister is carrying out. I say that to save the Minister making an error in future. He is a reasonable man; I am as well, and I like to help Ministers who are moving towards our joint objective of having more PFI hospitals.
  In the light of the assurances given by the Minister, we shall not seek to press amendments Nos. 2 and 3.
  Question put, That the amendment be made:—
  The Committee divided: Ayes 26, Noes 216.

  Division No. 54]

  [11.39 pm

  AYES

  Allan, Richard (Shef'ld Hallam)

  Keetch, Paul

  Baker, Norman

  Kirkwood, Archy

  Ballard, Mrs Jackie

  Livsey, Richard

  Brand, Dr Peter

  Oaten, Mark

  Burstow, Paul

  Öpik, Lembit

  Campbell, Menzies (NE Fife)

  Rendel, David

  Feam, Ronnie

  Russell, Bob (Colchester)

  Foster, Don (Bath)

  Sanders, Adrian

  George, Andrew (St Ives)

  Stunell, Andrew

  Gorrie, Donald

  Taylor, Matthew (Truro)

  Harris, Dr Evan

  Tonge, Dr Jenny

  Harvey, Nick

  Heath, David (Somerton & Frome)

  Tellers for the Ayes:

  Hughes, Simon (Southwark N)

  Mr. Paul Tyler and

  Jones, Nigel (Cheltenham)

  Mr. Phil Willis.

  NOES

  Ainsworth, Robert (Cov'try NE)

  Betts, Clive

  Allen, Graham (Nottingham N)

  Blackman, Liz

  Anderson, Janet (Rossendale)

  Blears, Ms Hazel

  Armstrong, Ms Hilary

  Blizzard, Bob

  Banks, Tony

  Borrow, David

  Barnes, Harry

  Bradley, Keith (Withington)

  Barron, Kevin

  Bradshaw, Ben

  Battle, John

  Brinton, Mrs Helen

  Bayley, Hugh

  Brown, Rt Hon Nick (Newcastle E)

  Beard, Nigel

  Brown, Russell (Dumfries)

  Beckett, Rt Hon Mrs Margaret

  Browne, Desmond (Kilmarnock)

  Bennett, Andrew F

  Buck, Ms Karen

  Benton, Joe

  Burden, Richard

  149

  Burgon, Colin

  Jackson, Helen (Hillsborough)

  Butler, Christine

  Jenkins, Brian (Tamworth)

  Byers, Stephen

  Jones, Ms Fiona (Newark)

  Caborn, Richard

  Jones, Helen (Warrington N)

  Campbell, Alan (Tynemouth)

  Jones, Ms Jenny (Wolverh'ton SW)

  Campbell, Ronnie (Blyth V)

  Campbell-Savours, Dale

  Jones, Jon Owen (Cardiff C)

  Canavan, Dennis

  Keen, Alan (Feltham & Heston)

  Cann, Jamie

  Keen, Mrs Ann (Brentford)

  Cawsey, Ian

  Kidney, David

  Chapman, Ben (Wirral S)

  Kilfoyle, Peter

  Clapham, Michael

  King, Andy (Rugby & Kenilworth)

  Clark, Dr Lynda (Edinburgh Pentlands)

  Ladyman, Dr Stephen

  Laxton, Bob

  Clarke, Charles (Norwich S)

  Lepper, David

  Clarke, Rt Hon Tom (Coatbridge)

  Lewis, Ivan (Bury S)

  Clelland, David

  Linton, Martin

  Coaker, Vernon

  Livingstone, Ken

  Coffey, Ms Ann

  Lloyd, Tony (Manchester C)

  Coleman, Iain (Hammersmith)

  Lock, David

  Colman, Tony (Putney)

  McAllion, John

  Corbyn, Jeremy

  McAvoy, Thomas

  Cousins, Jim

  McCafferty, Ms Chris

  Cranston, Ross

  Macdonald, Calum

  Cryer, John (Hornchurch)

  McDonnell, John

  Cunningham, Jim (Cov'try S)

  McFall, John

  Darling, Rt Hon Alistair

  McNamara, Kevin

  Darvill, Keith

  McNulty, Tony

  Davey, Valerie (Bristol W)

  Mactaggart, Fiona

  Davidson, Ian

  McWalter, Tony

  Dawson, Hilton

  McWilliam, John

  Denham, John

  Mahon, Mrs Alice

  Dismore, Andrew

  Mallaber, Judy

  Dobson, Rt Hon Frank

  Marshall, David (Shettleston)

  Doran, Frank

  Marshall-Andrews, Robert

  Dowd, Jim

  Maxton, John

  Drew, David

  Michael, Alun

  Eagle, Angela (Wallasey)

  Michie, Bill (Shef'ld Heeley)

  Efford, Clive

  Milburn, Alan

  Ellman, Ms Louise

  Moffatt, Laura

  Ennis, Jeff

  Morgan, Ms Julie (Cardiff N)

  Fatchett, Derek

  Morgan, Rhodri (Cardiff W)

  Fitzpatrick, Jim

  Morley, Elliot

  Foster, Michael John (Worcester)

  Morris, Ms Estelle (B'ham Yardley)

  Foulkes, George

  Mountford, Kali

  Gapes, Mike

  Mudie, George

  Gardiner, Barry

  Mullin, Chris

  George, Bruce (Walsall S)

  Murphy, Jim (Eastwood)

  Gibson, Dr Ian

  Murphy, Paul (Torfaen)

  Godsiff, Roger

  Naysmith, Dr Doug

  Gordon, Mrs Eileen

  Morris, Dan

  Graham, Thomas

  O'Brien, Mike (N Warks)

  Griffiths, Jane (Reading E)

  O'Hara, Edward

  Griffiths, Win (Bridgend)

  O'Neill, Martin

  Grogan, John

  Organ, Mrs Diana

  Hall, Mike (Weaver Vale)

  Osborne, Mrs Sandra

  Hall, Patrick (Bedford)

  Pendry, Tom

  Hanson, David

  Perham, Ms Linda

  Heal, Mrs Sylvia

  Pickthall, Colin

  Henderson, Ivan (Harwich)

  Pike, Peter L

  Heppell, John

  Plaskitt, James

  Hesford, Stephen

  Pond, Chris

  Hill, Keith

  Pound, Stephen

  Hinchliffe, David

  Prentice, Ms Bridget (Lewisham E)

  Home Robertson, John

  Prentice, Gordon (Pendle)

  Hoon, Geoffrey

  Purchase, Ken

  Hope, Phil

  Quin, Ms Joyce

  Hopkins, Kelvin

  Quinn, Lawrie (Scarborough)

  Howarth, George (Knowsley N)

  Rapson, Syd

  Hoyle, Lindsay

  Raynsford, Nick

  Hughes, Kevin (Doncaster N)

  Reed, Andrew (Loughborough)

  Hurst, Alan

  Roche, Mrs Barbara

  Hutton, John

  Rooker, Jeff

  Iddon, Dr Brian

  Rooney, Terry

  Ingram, Adam

  Roy, Frank

  Jackson, Ms Glenda (Hampstead)

  Ruddock, Ms Joan

  150

  Sawford, Phil

  Thomas, Gareth (Clwyd W)

  Simpson, Alan (Nottingham S)

  Thomas, Gareth R (Harrow W)

  Singh, Marsha

  Tipping, Paddy

  Skinner, Dennis

  Todd, Mark

  Smith, Rt Hon Andrew (Oxford E)

  Touhig, Don

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Trickett, Jon

  Truswell, Paul

  Smith, Jacqui (Redditch)

  Turner, Dennis (Wolverh'ton SE)

  Smith, John (Glamorgan)

  Twigg, Derek (Halton)

  Smith, Llew (Blaenau Gwent)

  Twigg, Stephen (Enfield)

  Spellar, John

  Vis, Dr Rudi

  Squire, Ms Rachel

  Ward, Ms Claire

  Starkey, Dr Phyllis

  Watts, David

  Stevenson, George

  Winterton, Ms Rosie (Doncaster C)

  Stewart, David (Inverness E)

  Woolas, Phil

  Stewart, Ian (Eccles)

  Worthington, Tony

  Stoate, Dr Howard

  Wray, James

  Stringer, Graham

  Wright, Dr Tony (Cannock)

  Stuart, Ms Gisela (Edgbaston)

  Wright, Tony D (Gt Yarmouth)

  Sutcliffe, Gerry

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Tellers for the Noes:

  Mr. David Jamieson and

  Taylor, Ms Dan (Stockton S)

  Jane Kennedy.

  Question accordingly negatived.
  Dr. Evan Harris: I beg to move amendment No. 8, in page 1, line 15, at end insert
  'and
  (c) if the National Health Service trust has proved to his satisfaction that the agreement would not restrict clinical freedom or patient choice.'.
  The Second Deputy Chairman of Ways and Means (Mr. Michael Lord): With this it will be convenient to discuss the following amendments: No. 4, in, page 1, line 24, leave out from 'property' to end of line 25 and insert—
  '(b) any non—clinical services, and
  (c) any clinical or clinical support services agreed to by local clinicians.'.
  No. 9, in page 1, line 24, leave out from 'property' to end of line 25.
  Dr. Harris: It is unfortunate that, on my first opportunity to speak on national health service legislation in this place, an hour ago I was called to attend a visitor to the House who had collapsed outside the Chamber. I sent him to St. Thomas's hospital, and I am sure that all hon. Members wish him a speedy recovery. It is important to take note that I passed on his care to an NHS paramedic, who passed it on to an NHS ambulance worker. I spoke to an NHS doctor in the company of NHS nurses at the hospital. [Interruption.]
  The Second Deputy Chairman: Order. There is far too much general chatter in the Chamber. The hon. Member for Oxford, West and Abingdon (Dr. Harris) should be heard in silence.
  Dr. Harris: Thank you, Mr. Lord. I suspect that that gentleman will have a chest X-ray, which will be conducted by NHS radiographers and examined by an NHS radiologist—it may be the husband of my hon. Friend the Member for Richmond Park (Dr. Tonge). He may have a blood sugar test and give a urine sample, which will be examined by laboratory staff—not pathologists—who are employed by the NHS. I do not think that the gentleman suffered a heart attack, but, if he did, his rehabilitation will

  151
  be provided by NHS occupational therapists. We seek to preserve that NHS clinical team in our amendment No. 9. That team provides the patient care, and its integrity under single, NHS, management, is vital to a good service and adequate care provision in the NHS.
  We believe that the term "service" used in the Bill is too vague. The Minister said, when commenting on another Liberal Democrat amendment, that vagueness is dangerous in legislation such as this. Therefore, we urge the Government to accept amendment No. 9, which seeks to remove the vagueness by deleting the term "service". We are not reassured by statements made by the Minister, his colleagues in another place and by the Secretary of State that—undefined—clinical services will not be subject to the PFI and therefore run by private companies. Without definition, we cannot be reassured on that point.
  We must also reassure those who work in the health service. My former colleagues and other NHS staff view the PFI and private sector involvement in the health service with great suspicion. It is vital that we address the problems of low morale and suspicion among clinical staff as, in many geographical areas and in many specialties, we face a recruitment crisis that affects medical staff, nursing staff, those in the professions allied to medicine and those in support services. Many of my former NHS colleagues say that they will not apply to hospitals that are run under the PFI. I recall that an early draft of the Norfolk and Norwich PFI scheme gave no consideration to accommodating junior hospital doctors on call at night, and the problem was noticed and pointed out only at a late stage in negotiations.
  It is also the case that, in many of the schemes, little provision may be made for circumstances in services which had previously been defined as non-clinical, such as catering, where it is not really in the interests of a company trying to run catering efficiently and for profit to provide food for isolated clinicians working in the middle of the night. Hon. Members on both sides of the House would be gravely concerned if there was not a bite to eat or a drop to drink in the House after 8 pm. That is the danger of not ensuring that the national health service, which does at least have some accountability to those working in it, continues to provide those services.
  At the election, Labour stood for an end—Liberal Democrats support this—to local pay bargaining for nurses and, by implication, other staff. What is it if it is not local pay bargaining when some NHS workers are contracted out—whether or not it be within the undeclared definition of clinical services—to a local contractor and then have to negotiate terms and conditions locally? It is local pay negotiation by the back door. I am sure that hon. Members on the Government Benches will be very keen to preserve the national part of the national health service, to preserve national terms and conditions, as they are pledged to do, but that will not be possible while not excluding the word "services" from the text of the Bill.
  It is important that we recognise the contribution that is made to NHS clinical services by education and research establishments within the NHS. Academic medicine provides approximately 10 per cent. of direct patient service. Many of the education sectors of the health service, including many in my constituency, are provided
  152
  not only by doctors but by research workers and other staff in the hospital. The contiguity of the team in education and in the labs, which provides the service to the hospital, is under threat. Applications to those posts, which are already depleted, will be under threat if we do not reassure staff. The best way to do that is to define clinical services on the face of the Bill, which the Minister ruled out on Second Reading, or to remove the term "services" altogether. That would improve the Bill.
  Amendment No. 8 talks of the need to ensure that patient choice is preserved. We heard concerns about research that shows that bed provision in PFI schemes is between 26 per cent. and 30 per cent. below what health service academics who have looked at this feel is required. The British Medical Journal may not be required reading even for new Labour Members, but it was adequately reported in The Guardian. We have yet to be reassured about that concern.
  There is also a concern that, with time, patient needs will change and that some of the PH schemes will lock the NHS into relatively secret 30-year contracts. The hon. Member for Stratford-on-Avon (Mr. Maples) raised a concern—it has not been answered satisfactorily—about a different choice. A PFI scheme is either a straight leasing scheme with no transfer of risk, where it will clearly be just a more expensive way to raise capital for the NHS, or the risk will be transferred to the private sector, which will want a bigger return to justify this. The private sector is more likely to get a return on matters relating to running services where it can see scope for expansion or where it can be protected against an excess of capacity versus an excess of demand. No reassurance has been given that patient choice will be protected where there is just an excess of demand for a scheme that is locked in for 30 years. That is another unaddressed concern that we have.
  More worrying is the lack of democratic accountability in the NHS at the moment. It was surprising to hear the Secretary of State indicate from a sedentary position on Second Reading that he felt that democracy was being brought into the NHS by the new round of appointments that are about to be made. That is not democratic, and it is barely accountable. It is strange that, in local authorities, where compulsory competitive tendering has led to the private sector employment of people providing vital public services, there is democratic accountability for decisions made, whereas in the health service, where there is little or no democratic accountability, there seems to be no protection or comeback for professional groups that feel that they may be hostages to fortune to whatever private sector company is running their service. We cannot be reassured, as we were invited to be earlier, that terms and conditions might improve under the private sector. They may improve for the first year, but there are many examples of where what is granted in the first year by privatised industries gradually regresses into something worse than we would support.
  For all these reasons, we are suggesting amendments Nos. 8 and 9.
  12 midnight
  Mr. Maples: The Liberal Democrat amendments in this group seem to be like all the others—it is not, of

  153
  course, for me to answer them—in that if they were agreed to they would kill the private finance initiative stone dead. I do not see how amendment No. 8 would ever work. Indeed, it provides for a lawyers' charter. I am surprised that an amendment with the names of three doctors to it should provide for such a charter. Perhaps the Liberal Democrats have their objectives slightly muddled.
  An amendment that would omit any references to services would make it almost impossible to see an PFI project through. I suspect that none of the smaller ones would go through. Even the large ones, those relying on property maintenance services, would be in question. The service element is a crucial element in securing value for money and risk transfer. If it were not present, the project would not fly and it would become straightforward public expenditure.
  I ask the Minister to consider amendment No. 4, which would split the service question into non-clinical services and clinical or clinical support services. I realise that it begs a question and does not assist with the problem of definition, but I ask the Minister rather more to share his thinking with us. I raised some of the considerations on Second Reading and I feel that in his reply—I know that he had many matters to which to respond—he did not deal with them fully.
  It is easy to pose the extremes, and I imagine that the Government have no problem with property services and maintenance as attached to a PFI contract. On the other hand, there is a great deal of problem with open-heart surgery being provided as part of a PFI contract. The difficulty lies in drawing the line, and I am not suggesting that the drawing of it is easy. As the Minister says that he will try to develop some guidance, however, I shall try to develop the matter.
  I am disappointed that the Minister has already ruled out radiography and pathology. I gave an example on Second Reading of a theoretical scheme that might work well in the area of pathology. It may be that something like that, attached to a PFI project, would make the project work, provided that there was value for money and risk transfer. Without those elements the project would not exist. If there were merely the construction of a building, that would not fly for there would be only a leasing deal. There must be a service element attached to the project, and it may be that the logical service lies in a clinical support area. Ruling that out from the start seems to be restricting the possible scope of PFI projects.
  As I said on Second Reading, the NHS already buys in an enormous amount from the private sector without apparently any ideological problem. General practitioners are effectively in the private sector. They represent small businesses that contract independently with the NHS. We buy in all our drugs and other supplies. The year before last, apparently, we spent £800 million directly buying in health care. If that has been acceptable to us all for years, perhaps without realising consciously that it has been happening, I do not understand why it should be unacceptable to include radiography or pathology services in a PFI bid.
  Amendment No. 4 provides that there should be agreement by "local clinicians" to provide the sort of safeguard that the Government would probably require, and one which the previous Secretary of State, my right hon. Friend the Member for Charnwood (Mr. Dorrell), had always discussed.
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  I shall focus on the issue by asking the Minister what he would do if he received a really good proposal that he wanted to put into effect, that might allow the building of a new district general hospital, but for PFI purposes meant the inclusion of pathology and radiography services—the two examples that he has excluded already. Let us suppose that those services were part of the project and that without them the value-for-money and risk criteria would not be met, but otherwise the proposal would go straight to the top of the Minister's list of priority projects. How would the Minister deal with that? Perhaps he will develop his thinking with us and explain how he proposes to deal with that issue.
  Mr. Milburn: The amendments represent the two extremes on clinical services under PFI. The Liberal Democrat amendment No. 9 would prevent any transfer of services under the private finance initiative, with the consequent wrecking of the leading schemes, especially those at Norwich and at Dartford, and the other 12 schemes that we have prioritised thus far.
  The hon. Member for Oxford, West and Abingdon (Dr. Harris) gave a reasonable presentation of his case. However, if he is prepared to wreck the Bill and thus wreck the prospect of new hospitals for those communities, he should have the courage of his convictions and should go to those communities and explain to them why, out of ideological dogma—which is what it is—he is not prepared to let them have those hospitals. It is incumbent on him to do that.
  Amendment No. 9 seems to be designed to prevent the Secretary of State from certifying an agreement under which any services are to be transferred to the private sector. The practical result of that would be that such agreements would not reach financial close, with the consequence that none of the major PFI acute schemes would be built.
  As Liberal Democrat Members have shown a profound lack of understanding of what the PFI does, perhaps I should explain why, under the PFI, some services are transferred to the private sector. The PFI is not an expensive way of raising a loan to build a hospital: it is a way of providing the NHS with a complete service, including buildings and non-clinical support staff, for which the NHS pays. Under the PFI, significant amounts of risk are transferred to the private sector, so that if the service stops, so do the payments by the health service. All the major hospital schemes that are now going ahead have been developed on that basis. The amendment would stop every one of those schemes in its tracks.
  That is not to say that there will not be new forms of public-private partnership in the future. I have already said that our review of PFI will consider other partnership agreements. We shall consult to see whether there are other ways of engaging with the private sector for the benefit of patients. The amendment prejudges that review and its conclusions about where the dividing line between clinical and non-clinical services should lie.
  On amendment No. 8, arrangements already exist to ensure that these issues are considered—as they certainly should be—well before an agreement is submitted to the Secretary of State for certification. A trust must justify a PFI scheme to the Department of Health when requesting approval of the full business case. It must also justify it to the Treasury. In so doing, it must show what options

  155
  it has considered to meet its service needs, and why it has chosen its preferred option. I would expect it to demonstrate, among other things, the clinical advantages of its preferred option. That is a fundamental aspect of a PFI scheme.
  I am happy to assure the hon. Member for Oxford, West and Abingdon that I shall see to it that these issues continue to be given proper weight when a PFI scheme is taken forward. That need not be specified in the Bill, which, for the benefit of Liberal Democrat Members, is about removing doubt, providing certainty and, above all, getting new hospitals built.
  I shall deal with the other end of the spectrum. Amendment No. 4 is a neat reinstatement of the previous Government's position on this issue. It tells its own story. It shows the Tory party's failure to understand why it lost the general election. It lost on 1 May because the British people no longer trusted it. Above all, it lost because it was not trusted on the national health service. It was not trusted because the public believed, quite rightly, that it intended to privatise the national health service, and, if amendment No. 4 is anything to go by, it clearly has exactly that intention now.
  This is, of course, all dressed up in the clothes of "clinical choice". The Opposition's line is that, if desperate doctors working in an antiquated hospital say that the price that they are willing to pay to get a modern hospital is private employment through a PFI deal, that deal should be given the green light. Let me tell the hon. Member for Stratford-on-Avon (Mr. Maples) that, while I am all for clinical choice, I am adamantly opposed to the privatisation of clinical services in any part of the NHS. I remind the hon. Gentleman—who seems to have forgotten—that it is a national health service of which Members of Parliament are guardians, not a rag-bag collection of competing local health services. This Government are determined to run the service as a national health service; we are also committed to run it in accordance with our manifesto commitments. The manifesto committed us to opposing the inclusion of clinical services in PFI deals, and, despite the hon. Gentleman's prompting, I am not about to reverse that principle by accepting amendment No 4.
  As I have explained, as part of our review of the PFI the Government will, for the first time in the history of the NHS, define where the boundaries between clinical and non-clinical services lie. That will form part of the PFI process. If the hon. Member for Stratford-on-Avon wants to make representations, I invite him to do so, but the last thing that we need is yet more uncertainty in the Bill. As the hon. Gentleman knows, what we need tonight is clarity, so that we can make progress.
  Mr. Maples: For the first time during the debate, I heard ideology creeping into the Minister's speech. Although I understand some of his reasons, I feel that there should be practical reasons for acting or not acting.
  As I said earlier, the NHS buys in a certain amount of health care from the private sector. I do not know the amount now, but it was £800 million-worth two years ago. I do not hear the Minister saying that he proposes to abolish that arrangement, and I do not think that the Conservative Government were heavily criticised for presiding over it. Health authorities probably acted with good reason, making decisions for themselves.
  156
  There are so many examples of the health service buying in services from the private sector that the ideological no-go area proposed by the Minister is likely to restrict the number of options open to him. My right hon. Friend the Member for Fylde (Mr. Jack) mentioned the haemodialysis service at Darlington Memorial hospital, which was set up and is being operated under the PFI. Presumably the Minister would not have allowed that, although he is probably more familiar with what clinicians and others at the hospital think about it than any of the rest of us are. Will the Minister reflect on whether the PFI has really caused the problems for doctors and patients that he suggests the amendment would cause? I hope that he will keep an open mind in his review—or, at least, a more open mind than he appears to have now. I do not think that he should start ruling things out.
  Interestingly, the Government seem to have changed their position. On the first day of debate in the House of Lords, the Minister who was dealing with the Bill did not rule out radiology and pathology services, but did rule them out a few days later—in Committee or on Report; I forget which. I should have thought that, with several years of office ahead of them and with a review on the subject, the Government would be wise not to rule out such services. They may well find that schemes that they want to introduce rely on the value-for-money and risk-transfer elements involved in some degree of service provision.
  Drawing the line between clinical and non-clinical support is extremely difficult, and I hope that the Minister will take that into account in the review. He has as good as said that he will.
  Dr. Harris: I thank the Minister for his reply in respect of amendment No. 8. We continue to hear reassuring noises from the Government about scrutiny to ensure that patients' interests are preserved, but we shall continue to carry out the scrutiny of the Government in a way in which the Conservative party cannot.
  12.15 am
  Amendment No. 9 relates to the definition of clinical services. In the first Health Question Time in this Parliament, the Secretary of State said:
  "When the Bill comes to this House from the House of Lords, if the hon. Gentleman wishes to move an amendment to make that clear I shall consider it carefully."—[Official Report, 20 May 1997; Vol. 294, c. 504.]
  Despite attempts in another place, we do not think that the Government have considered this matter carefully, because in the other place we requested a list of clinical services as the Government saw them. It is unsatisfactory to have an assurance from the Minister now that only after the Bill is passed will there be such a list. There was plenty of time to define it, and simply throwing in the expression "pathology and radiology services" betrays a lack of understanding of the extent and integrity of the clinical team.
  We do not wish to stop the building of any hospital. The Government claim that the amendment risks threatening the private finance initiative. That is the Government's view, but it is not ours. The Bill as drafted

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  puts at risk the national health service as we know it, and we would rather tie our colours to the mast of protection for the NHS than any perceived risk to the PFI.
  Mr. Milburn: It is not our perception: it is the view of the bankers, and they will stump up the cash. If the hon. Gentleman intends to press this matter to a vote, he should also be intent upon explaining to the 14 communities that their hospitals will not be built. There should be some honesty among Liberal Democrat Members.
  Dr. Harris: We do not accept that the amendment puts any hospital at risk, and it is not our intention to stop the building of any hospital. We have consistently, and this year, promised extra funding for the national health service. The Minister's reference to bankers more eloquently betrays a lack of understanding of the nature of NHS functions as a public service than anything that has been said earlier.
  We shall press our amendment on this issue to a vote. Following Ministers' remarks in another place, doctors, the Royal College of Nursing and ourselves are not satisfied. We shall put down a marker that it is creating a hostage to fortune to allow the private finance initiative to proceed into the field of clinical services. We shall press amendment No. 9.
  The Second Deputy Chairman: Order. We must first dispose of amendment No. 8.
  Dr. Harris: I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Amendment proposed: No. 9, in page 1, line 24, leave out from 'property' to end of line 25.—[Dr. Harris.]
  Question put, That the amendment be made:—
  The Committee divided: Ayes 26, Noes 174.

  Division No. 55]

  [12.17 am

  AYES

  Allan, Richard (Shef'ld Hallam)

  Keetch, Paul

  Baker, Norman

  Kirkwood, Archy

  Ballard, Mrs Jackie

  Livsey, Richard

  Brand, Dr Peter

  Oaten, Mark

  Burstow, Paul

  Öpik, Lembit

  Campbell, Menzies (NE Fife)

  Rendel, David

  Fearn, Ronnie

  Russell, Bob (Colchester)

  Foster, Don (Bath)

  Sanders, Adrian

  George, Andrew (St Ives)

  Stunell, Andrew

  Gorrie, Donald

  Taylor, Matthew (Truro)

  Harris, Dr Evan

  Tonge, Dr Jenny

  Harvey, Nick

  Heath, David (Somerton & Frome)

  Tellers for the Ayes:

  Hughes, Simon (Southwark N)

  Mr. Paul Tyler and

  Jones, Nigel (Cheltenham)

  Mr. Phil Willis.

  NOES

  Ainsworth, Robert (Cov'try NE)

  Bennett, Andrew F

  Allen, Graham (Nottingham N)

  Benton, Joe

  Armstrong, Ms Hilary

  Betts, Clive

  Banks, Tony

  Blizzard, Bob

  Barnes, Harry

  Borrow, David

  Barron, Kevin

  Bradley, Keith (Withington)

  Battle, John

  Bradshaw, Ben

  Bayley, Hugh

  Brinton, Mrs Helen

  Beard, Nigel

  Brown, Rt Hon Nick (Newcastle E)

  158

  Brown, Russell (Dumfries)

  Ladyman, Dr Stephen

  Browne, Desmond (Kilmamock)

  Laxton, Bob

  Burden, Richard

  Lepper, David

  Burgon, Colin

  Lewis, Ivan (Bury S)

  Byers, Stephen

  Linton, Martin

  Caborn, Richard

  Livingstone, Ken

  Campbell, Alan (Tynemouth)

  Lloyd, Tony (Manchester C)

  Campbell, Ronnie (Blyth V)

  Lock, David

  Campbell-Savours, Dale

  McAllion, John

  Cann, Jamie

  McAvoy, Thomas

  Cawsey, Ian

  Macdonald, Calum

  Chapman, Ben (Wirral S)

  McDonnell, John

  Clapham, Michael

  McFall, John

  Clark, Dr Lynda (Edinburgh Pentlands)

  McNamara, Kevin

  McNulty, Tony

  Clarke, Charles (Norwich S)

  Mactaggart, Fiona

  Clarke, Rt Hon Tom (Coatbridge)

  McWalter, Tony

  Clelland, David

  McWilliam, John

  Coaker, Vernon

  Mahon, Mrs Alice

  Coffey, Ms Ann

  Marshall, David (Shettleston)

  Coleman, Iain (Hammersmith)

  Marshall-Andrews, Robert

  Colman, Tony (Putney)

  Michael, Alun

  Corbyn, Jeremy

  Michie, Bill (Shef'ld Heeley)

  Cousins, Jim

  Milburn, Alan

  Cranston, Ross

  Morley, Elliot

  Cryer, John (Hornchurch)

  Mudie, George

  Cunningham, Jim (Cov'try S)

  Murphy, Jim (Eastwood)

  Darling, Rt Hon Alistair

  Murphy, Paul (Torfaen)

  Darvill, Keith

  Naysmith, Dr Doug

  Davidson, Ian

  Norris, Dan

  Dawson, Hilton

  O'Brien, Mike (N Warks)

  Denham, John

  O'Hara, Edward

  Dobson, Rt Hon Frank

  O'Neill, Martin

  Doran, Frank

  Pickthall, Colin

  Dowd, Jim

  Pike, Peter L

  Drew, David

  Plaskitt, James

  Efford, Clive

  Pond, Chris

  Ennis, Jeff

  Pound, Stephen

  Fatchett, Derek

  Prentice, Ms Bridget (Lewisham E)

  Fitzpatrick, Jim

  Purchase, Ken

  Foster, Michael John (Worcester)

  Quin, Ms Joyce

  Foulkes, George

  Quinn, Lawrie (Scarborough)

  Gardiner, Barry

  Rapson, Syd

  George, Bruce (Walsall S)

  Raynsford, Nick

  Gibson, Dr Ian

  Reed, Andrew (Loughborough)

  Godsiff, Roger

  Roche, Mrs Barbara

  Gordon, Mrs Eileen

  Rooker, Jeff

  Graham, Thomas

  Rooney, Terry

  Griffiths, Win (Bridgend)

  Roy, Frank

  Grogan, John

  Ruddock, Ms Joan

  Gunnell, John

  Sawford, Phil

  Hall, Mike (Weaver Vale)

  Simpson, Alan (Nottingham S)

  Hanson, David

  Singh, Marsha

  Henderson, Ivan (Harwich)

  Skinner, Dennis

  Heppell, John

  Smith, Rt Hon Andrew (Oxford E)

  Hesford, Stephen

  Smith, John (Glamorgan)

  Hill, Keith

  Smith, Llew (Blaenau Gwent)

  Home Robertson, John

  Spellar, John

  Hoon, Geoffrey

  Stevenson, George

  Hopkins, Kelvin

  Stewart, David (Inverness E)

  Howarth, George (Knowsley N)

  Stewart, Ian (Eccles)

  Hoyle, Lindsay

  Stoate, Dr Howard

  Hughes, Kevin (Doncaster N)

  Stringer, Graham

  Hurst, Alan

  Stuart, Ms Gisela (Edgbaston)

  Hutton, John

  Sutcliffe, Gerry

  Iddon, Dr Brian

  Taylor, Ms Dari (Stockton S)

  Ingram, Adam

  Thomas, Gareth (Clwyd W)

  Jackson, Ms Glenda (Hampstead)

  Thomas, Gareth R (Harrow W)

  Jamieson, David

  Tipping, Paddy

  Jenkins, Brian (Tamworth)

  Todd, Mark

  Jones, Ms Jenny (Wolverh'ton SW)

  Touhig, Don

  Trickett, Jon

  Jones, Jon Owen (Cardiff C)

  Truswell, Paul

  Kidney, David

  Turner, Dennis (Wolverh'ton SE)

  Kilfoyle, Peter

  Twigg, Derek (Halton)

  King, Andy (Rugby & Kenilworth)

  Twigg, Stephen (Enfield)

  159

  Vis, Dr Rudi

  Wright, Tony D (Gt Yarmouth)

  Watts, David

  Woolas, Phil

  Tellers for the Noes:

  Worthington, Tony

  Janet Anderson and

  Wray, James

  Jane Kennedy.

  Question accordingly negatived.
  Clause 1 ordered to stand part of the Bill.
  Clauses 2 and 3 ordered to stand part of the Bill.

New clause 1

  COMMENCEMENT
  'This Act shall come into force on a day to be appointed by order of the Secretary of State, being a day not earlier than 1st September 1997.'.—[Mr. Jack]
  Brought up, and read the First time.
  Mr. Jack: I beg to move, That the clause be read a Second time.
  The Chairman of Ways and Means (Sir Alan Haselhurst): With this, it will be convenient to discuss new clause 2—Date on which Act shall cease to have effect—
  'This Act shall cease to have effect three years after enactment.'.
  Mr. Jack: The Minister, who is an assiduous man, will no doubt be familiar with paragraph 29(vi) of the Bates report and paragraph 12(6) of a document that I am sure he has studied in great detail, "Guidelines for Smoothing the Procurement Process". Both deal with a matter of considerable importance to the Minister, who told us at the beginning of the debate that he wanted to do all he could to accelerate the PFI process and to leave a nice taste in the mouth of those who are involved in it. The reason we have tabled our new clause, providing a specific date for introduction of the Bill's powers, is to give him time to reflect and to consider the matters dealt with in the two numbered paragraphs.
  The Minister is perhaps a little unsighted, and I should perhaps explain the matter in a little greater detail. Paragraph 29(vi) of the Bates report—which I remind him has been accepted in full by the Paymaster General—states:
  "When a decision is made not to proceed with a project and that decision is not related to the viability of tenders received, contractors' bidding costs should be refunded. Such a procedure exists already in the Highways Agency and should apply generally across Departments."
  That advice, which the Paymaster General claims is new, reflects the advice in one of the numbered paragraphs in "Guidelines for Smoothing the Procurement Process".
  I raise the issue now to give the Minister a chance to consider what will happen to those who ultimately become the losers in the exercise. I appreciate that he might guide me in saying that projects that are refused are not yet losers, because they are subject to his consultation exercise and may return in another guise. At some point, however, someone will lose, whether it is a bidding consortium that incurs considerable costs or a trust itself.
  I do not accept the Minister's answer to a parliamentary question from me, because his answer indicated a difference of view. As I had understood it, in normal circumstances expenses incurred by trusts in such matters
  160
  would have been capitalised. He disagreed, and said that expenses would have to be taken into account under revenue. Either way, a trust will lose after having spent a considerable sum. Ultimately, and more importantly, however, those whom the Minister wants to attract to his cause—contractors and others in a consortium—will lose out.
  As the Bates report states, the Government's policy is to reimburse people for their bidding costs if, through no fault of their own, a project comes to a conclusion unfavourable to them. We have suggested delaying by one month the Bill's commencement, so that the Minister may reflect carefully on his obligations if he is to stay in line with the stated position of the Paymaster General.
  Mr. Simon Hughes: I should like to say a few words on new clause 2, which is grouped with new clause 1. I accept that the arguments in this debate have been run in the other place. Our proposal and our view are very clear, and have not been changed or shaken by the debate in either the other place or this House; rather, they have been confirmed by the Minister's comments.
  We are clear in our belief that current PFI arrangements are neither satisfactory nor the best that can be provided for a public-private partnership in the health service. Therefore, we do not want permanently to establish the current system, which has been inherited from the previous Conservative Government and which has been continued unchanged, at least initially, by the new Government. We do not want the system to be perceived as something that will continue indefinitely.
  We want to force the pace of change, and there are only two ways in which to do so. Either we should say, "We will change it one day," or—as the House often does with legislation—we should time-limit it and say, "Unless the House decides that it wants to continue legislation, that legislation will no longer continue to exist."
  New clause 2 would therefore place a time limit on the Bill. If the Government won the argument and held to their view that PFI was the best form of public-private partnership, they would return to the House in three years, or as soon as they wished to do so, and say that it had to be continued, and that they intended to legislate for an indefinite period. If, however, as we hope, they come back after their review and say that it is not the best system, the legislation will either need to be replaced or repealed, or will be left on the statute book and not used, which is nonsense if we want a statute book with no redundant legislation on it.
  The only argument against the notion of a time limit is that used by the Minister in response to my hon. Friend the Member for Oxford, West and Abingdon (Dr. Harris) in the previous debate—that it would cause uncertainty. That argument was also used by the Minister in another place. Intellectually, I understand that argument, but the Government have to decide what signals they want to send. We are dealing with all stages of the Bill in one day, unlike what happened with the last short NHS Bill introduced by the previous Government, which at least went through all its stages in the correct time, and unlike what happened to this Bill in another place, when there were proper gaps between all the stages.
  The Bill was introduced because the Government want to ensure that projects already in the pipeline can be progressed. My colleagues and I happen to think that that

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  pragmatic view is not sufficiently principled to be justifiable on the basis of dealing with projects in the pipeline.
  Even if that were the Government's view for the time being—even if they said they believed that the PFI was the only show in town, or, to use the Minister's words, it was PFI or bust, as in the case of Gravesham and of Norfolk and Norwich—it still would not mean that something else could not happen within three years. To deal with the uncertainty, the Minister has only to say that there will be partnership arrangements which will protect the interests of the private partners, that the Government will ensure that they are consulted on, that they will ensure they get the legislation right first time, and that everything will be done in good time. In that way, the assurance is given.
  If the private sector, or the bankers—to use the example cited in the previous debate—are so troubled about whether they have any future in the health service that the prospect of a Government assurance that there will be legislative arrangements within three years is not enough, I do not think that they are very secure partners for the NHS. We want people who are committed to the health service, not just to short-term financial profit. We want people who see themselves as having a long-term obligation to be partners in British health care.
  The Bill is to deal with projects in the pipeline. The Minister has helped himself since the debate in another place by giving 14 of them the green light. He knows as well as I do, because it is in the letter that he kindly wrote to us at the beginning of the month, that they are meant to be up and running within 18 months; if they are not, he will ask why.
  I am not trying to tie the Minister to the exact day, but, in this final debate on amendments to the Bill, I should like the Minister to tell us when he expects the PFI review to be completed—this calendar year, financial year or legislative year. I am not bothered which it is, because I want it to be done properly, but whichever it is, there will be plenty of time for Parliament to debate what should come after the scrappy PFI scheme introduced by the Tories.
  It does not sound convincing when the scheme which the Labour party criticised so roundly and so often is now being endorsed so warmly as the only show in town. Either it was right before, which the Conservatives are entitled to argue, and is right now, or it was suspect then, as we argued, and it is suspect now. There is nothing to suggest that it was right then and suspect now, or the other way around.
  We think that the Bill should be time-limited. Three years is sufficient to get the new show on the road. People who make a commitment to the health service and whose present project has been approved under the Bill will be reassured by a subsequent Government assurance that they intend to put a replacement and better system in place—a system that I shall collaborate with them in achieving—well before the three years are up.
  Mr. Milburn: Both the new clauses would, in different ways, undermine the PFI in the national health service. They would therefore also wreck the urgently needed hospital building programme.
  New clause 1 would prevent the Bill from coming into force before 1 September. That is a slightly odd proposal from the Conservatives, who have previously declared
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  their firm intent to help speed the Bill through. We are committed to sorting out the mess that we have inherited. As part of that process, we want to reach financial close and to see work starting on site as soon as possible. Commercial contracts have been signed for the schemes at Dartford and Norwich. They are just waiting for the Bill to be passed before they proceed to financial close and the diggers start on site.
  I remind the right hon. Member for Fylde (Mr. Jack), if he has not realised this already, that, if the Bill cannot come into force before 1 September, bankers—I know that that word is anathema to some Liberal Democrats—will not commit their money until that date. It is that simple. The consequence, right down the line, will be that communities that are waiting for schemes to go ahead will face further delay. We are all sick and tired of delay. We want certainty and clarity, and we want work to begin. For that reason, I invite the right hon. Gentleman to withdraw the motion.
  Mr. Jack: The Minister talks about the need to speed up progress on the Norfolk and Norwich project. How will the project achieve what he wants without the one-fiftieth scale architectural drawings required to know what to build where?
  Mr. Milburn: The scheme is at commercial close, and is waiting to see how the Bill progresses. There are issues to be sorted out, but I am confident that rapid progress will be made. The last thing the project needs is a further timetabling obstacle. The people of Norfolk and Norwich need a new hospital in the city, and they should get it.
  If the right hon. Gentleman wants more information about abortive costs than I can briefly give him now, I shall gladly write to him. He will know that NHS policy has always been that bidding costs are at risk until a scheme is given full business case approval by the NHS executive and the Treasury.
  That is reasonable, because otherwise the Government could end up refunding costs incurred by the private sector in developing a mediocre scheme. Why should the taxpayer subsidise poor schemes? The hon. Member for Orpington (Mr. Horam) urged me to take robust action. I am doing that. Robust action does not involve bailing out poor schemes. The Bates report recommends certain actions on abortive costs, but the proposals will not be applied retrospectively. They will apply to any scheme approved after 23 June, when the conclusions of the report were issued.
  The aim of new clause 2 is that the Bill should cease to have effect after three years. That is another pretty unusual proposal, which does not improve the legislation.
  The hon. Member for Southwark, North and Bermondsey (Mr. Hughes) asked a simple question: how long will our review of the PFI take? I give him a simple answer: it will be finished by the end of this calendar year. The last thing I want is yet a further obstacle placed in the way of establishing confidence in the existing PFI process. For that reason—to avoid doubt and to guarantee what he referred to as the long-term involvement of a number of stakeholders in the PFI—I ask the hon. Member not to press his new clause.
  Mr. Jack: We have heard the Minister come almost full circle. I do not want to delay unnecessarily the implementation of the PFI in the health service.

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  If the Minister and his officials cared to examine the record of the Treasury during my time there, they would discover that we did a great deal to try to make progress in what would, inevitably, always be an immensely complicated area. We took a lot of steps which I will not go into now to try to make that progress.
  Had we not made some progress by establishing good foundations, the Minister would not have 14 projects on which he can now negotiate. If it had not been for us sticking to our guns on the PFI, there would be no such thing for him to benefit from. Bearing in mind the flak to which we were subjected from the then Opposition, who used to tell us that the PFI meant privatisation by the back door, criticism of our inadequacies comes rich from the Minister now.
  I have looked at the Bates report, and after the conclusion of our proceedings I should be grateful if the Minister told me where it mentions the starting date to which he referred. We proposed a delay to allow the Minister to consider what appears to stated Government policy. He is now at odds with his colleague the Paymaster General, who said in his press release that the Government accepted all the Bates report.
  I do not see anything in the press release from the Treasury to say that the terms of that acceptance apply only to projects agreed after the introduction of the report. I accept that the terms governing the procurement process state that the reimbursement of the bidding costs remains a matter for individual Departments. Bates has moved on from that, however, and has stated clearly that, when a decision not to proceed with a project is made and that decision is not related to viability, the bidding costs should be refunded.
  The Minister's announcement was made after Bates had reported. Some people in the world of construction, project finance and so on will be extremely upset and disappointed by the Minister's narrow interpretation of that report.
  At least this brief debate has teased out the fact that the Minister will disappoint people. His remarks are on the record, and I have no doubt that the contractors will want to take them up with him. As we do not wish to delay the PFI as it makes its undoubted progress, I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.
  Bill reported, without amendment.
  Order for Third Reading read.
  Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Milburn.]
  12.47 am
  Mr. Simon Hughes: The House has spent six hours dealing with all stages of the Bill. It is a hugely important one for the health service, and in the past six hours we have exposed the differences on it which exist across the House.
  The Liberal Democrats believe that, if the Government had started the day with significantly more funds for public provision for the health service to build, the Bill would not be so crucial. A better funded health service is a better and more central remedy than the Bill.
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  As my hon. Friend the Member for Isle of Wight (Dr. Brand) said cogently, it is nonsense for the health service to plan for itself spontaneously from the bottom up only when a local idea comes to bloom, or to make every proposal subject to the approval of the Secretary of State or the Minister.
  The hon. Member for Norwich, South (Mr. Clarke) asked that the Minister should approve the number of beds in the new Norfolk and Norwich hospital, as well as the approach roads to it. It is nonsense for the health service to make such decisions. Of course Ministers should be accountable, but proposals should be planned and scrutinised at a regional level. It is at that regional democratic level that the public should be involved, to ensure that we have an adequately resourced and adequately planned health service.
  Thirdly, I think that we have clearly made the point that we believe that a better way for private finance to be involved in the health service is not through the one-off, ad hoc, area-by-area local deals, but through establishing a secure, national system whereby those on the private sector who want to invest in the health service can do so. That should save all the duplication, which I agree we want to avoid—there would be one process for distributing the resources and sharing out the capital. There would be one source, with one kitty and, ideally, one pool of money. We clearly take a different view from the Government on that.
  Despite those reservations, and for obvious reasons, we will not vote against Third Reading, just as we did not vote against Second Reading. We tabled our reasoned amendment, but it was not selected; we accept that that is the way that the House organises its business. The Minister knows that there are things in the pipeline that have been frustrated enough. Whatever our view might be about the individual schemes in Norwich, Gravesham or Dartford, it is not our job to frustrate people—including some of my colleagues in Newbury, Hereford and elsewhere—who have already been waiting long enough for schemes that are approved under the system.
  We have not blocked the Bill, but we have severe doubts about the system of financing. We believe that we will be proved right, but, in the meantime, we will collaborate with the Minister and the Government to try to ensure that we get a better system than the one that they took off the shelf in Richmond house when they inherited the system from the Tories. They can do better than that, and Britain can do better than that.
  12.51 am
  Dr. Harris: There are a couple of points on which I should like to seek reassurance from the Minister. I am sorry that I was unable to catch his attention and intervene during the debate on Second Reading.
  The first point involves the report from the Institute of Health Services Management, which stresses the need for purchasers to be actively involved in the genesis, not just the checking, of PFI schemes. It states:
  "the purchasing side of the NHS must get a grip on the process. Leaving the initiative with provider trusts, and with their consortium partners, risks locking the service into models of health care that may quickly be out-dated. 'The starting point has to be a clear view about the kinds of health care facilities needed in the future.'"

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  I seek the Minister's reassurance about how the purchasers within the health service are to be locked into that process from the beginning, not just forced to accept whatever provider trusts and their consortiums bring forward.
  I also seek the Minister's reassurance, either now or at a later date, about the preservation of some of the important aspects within the health service, such as education, which may be peripheral to the concerns of bidders in the PFI process. What means will there be to ensure that those running hospital services are able to respond to new Government initiatives relating to the appropriate treatment of hospital staff after hours? I have referred to catering facilities after hours for those unfortunate members of the health professions who have to work out of hours in difficult circumstances.
  I stress that, for many hospitals in my region, particularly those that are not able to use the PFI, the delay has arisen from initially having to engage in the PH process. If it was clear what made a scheme fit for the PFI, and if public funding were available for necessary schemes that were not appropriate to the PFI, we could ensure that urgently needed schemes that were not suitable for the PFI were not subject to the delays that we have seen in the past few years.
  Question put and agreed to.
  Bill read the Third time, and passed, without amendment.

DELEGATED LEGISLATION
Mr. Deputy Speaker (Sir Alan Haselhurst): With permission, I shall put together the motions relating to delegated legislation.
Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

DELEGATED LEGISLATION
  LEGAL AID AND ADVICE
  That the draft Legal Advice and Assistance (Scope) (Amendment) (No. 2) Regulations 1997, which were laid before this House on 19th June, be approved.

  EUROPEAN COMMUNITIES
  That the draft European Communities (Definition of Treaties) (Framework Co-operation Agreement between the European Community and its Member States and the Republic of Chile) Order 1997, which was laid before this House on 23rd June, be approved.
  That the draft European Communities (Definition of Treaties) (Euro-Mediterranean Agreement Establishing an Association between the European Communities and their Member States and the Kingdom of Morocco) Order 1997, which was laid before this House on 23rd June, be approved.
  That the draft European Communities (Definition of Treaties) (Inter-regional Framework Co-operation Agreement between the European Community and its Member States and the Southern Common Market and its Party States) Order 1997, which was laid before this House on 23rd June, be approved.

  INDUSTRIAL ORGANISATION AND DEVELOPMENT
  That the draft Scottish Seed Potato Development Council (Dissolution) Order 1997, which was laid before this House on 24th June, be approved.—[Mr. Betts.]
  Question agreed to.

AGRICULTURE
Ordered,
That Mr. Tim Collins, Mr. Andrew George, Mr. John Hayes, Mr. Alan Hurst, Ms Fiona Jones, Ms Sally Keeble, Mr. Peter Luff, Mr. Paul Marsden, Mr. Austin Mitchell, Mrs. Diana Organ and Mr. Mark Todd be members of the Agriculture Committee.—[Mr. John Mc William, on behalf of the Committee of Selection.]

DEFENCE
Ordered,
That Mr. Crispin Blunt, Mr. Julian Brazier, Mr. Menzies Campbell, Mr. Jamie Cann, Mr. Harry Cohen, Mr. Michael Colvin, Mr. Bruce George, Mr. Jimmy Hood, Mr. John McWilliam, Laura Moffatt and Ms Dari Taylor be members of the Defence Committee.—[Mr. John Mc William, on behalf of the Committee of Selection.]

EDUCATION AND EMPLOYMENT
Ordered,
That Ms Candy Atherton, Charlotte Atkins, Mr. Joe Benton, Mr. Graham Brady, Yvette Cooper, Mr. Cynog Dafis, Valerie Davey, Caroline Flint, Mr. Derek Foster, Mr. Don Foster. Mr. John Healey, Ms Margaret Hodge, Mrs. Eleanor Laing, Judy Mallaber, Mrs. Theresa May, Mr. Nick St. Aubyn and Mr. Gerry Steinberg be members of the Education and Employment Committee.—[Mr. John Mc William, on behalf of the Committee of Selection.]

ENVIRONMENT, TRANSPORT AND REGIONAL AFFAIRS
Ordered,
That Mr. Andrew F. Bennett, Mr. Tom Brake, Christine Butler, Mr. John Cummings, Mr. Stephen Day, Mr. Brian H. Donohoe, Mrs. Gwyneth Dunwoody, Mrs. Louise Ellman, Mr. Howard Flight, Mr. Clifford Forsythe, Mr. James Gray. Mr. Bill O'Brien, Mr. Bill Olner, Mr. Eric Pickles, Mr. George Stevenson, Mr. Graham Stringer and Dr. Alan Whitehead be members of the Environment, Transport and Regional Affairs Committee.—[Mr. John McWilliam, on behalf of the Committee of Selection.]

HEALTH
Ordered,
That Mr. John Austin, Dr. Peter Brand, Mr. Peter Brooke, Julia Drown, Mr. John Gunnell, Mr. David Hinchliffe, Ann Keen, Mr. Andrew Lansley, Dr. Howard Stoate, Mr. Robert Syms and Audrey Wise be members of the Health Committee.—[Mr. John Mc William, on behalf of the Committee of Selection.]

INTERNATIONAL DEVELOPMENT
Ordered,
That Mr. Dennis Canavan, Ann Clwyd, Ms Barbara Follett, Mr. Bernie Grant, Mr. Piara S. Khabra, Ms Oona King, Mrs. Tess Kingham, Mr. Andrew Robathan, Mr. Andrew Rowe, Dr. Jenny Tonge and Mr. Bowen Wells be members of the International Development Committee.—[Mr. John Mc William, on behalf of the Committee of Selection.]

NATIONAL HERITAGE
Ordered,
That Mr. Michael Fabricant, Mr. Ronnie Fearn, Mr. Christopher Fraser, Mrs. Llin Golding, Mr. Damian Green, Mr. Gerald Kaufman, Mr. Alan Keen, Mr. John Maxton, Mr. Roger Stott, Ms Claire Ward and Derek Wyatt be members of the National Heritage Committee.—[Mr. John Mc William, on behalf of the Committee of Selection.]

SCIENCE AND TECHNOLOGY
Ordered,
That Mr. David Atkinson, Mr. Nigel Beard, Dr. Michael Clark, Mrs. Claire Curtis-Thomas, Dr. Ian Gibson, Lynne Jones, Mr. Nigel Jones, Dr. Ashok Kumar, Mrs. Caroline Spelman, Mr. Desmond Turner and Mr. Alan W. Williams be members of the Science and Technology Committee.—[Mr. John McWilliam, on behalf of the Committee of Selection.]

SCOTTISH AFFAIRS
Ordered,
That Mrs. Irene Adams, Mr. Peter Atkinson, Miss Anne Begg, Mr. Eric Clarke, Mr. John McAllion, Rosemary McKenna, Mr. David Marshall, Mr. Michael Moore, Mr. David Stewart, Mr. Desmond Swayne and Mr. Andrew Welsh be members of the Scottish Affairs Committee.—[Mr. John Mc William, on behalf of the Committee of Selection.]

SOCIAL SECURITY
Ordered,
That Ms Karen Buck, Mr. Nick Gibb, Ms Patricia Hewitt, Miss Julie Kirkbride, Mr. Archy Kirkwood, Mr. Edward Leigh, Siobhain McDonagh, Mr. Chris Pond, Mr. Frank Roy, Ms Gisela Stuart and Mr. Malcolm Wicks be members of the Social Security Committee.—[Mr. John Mc William, on behalf of the Committee of Selection.]

TRADE AND INDUSTRY
Ordered,
That Mr. Tony Baldry, Mr. Roger Berry, Mr. John Butterfill, Mr. Jim Cunningham, Mr. Alan Johnson, Mr. Bob Laxton, Gillian Merron, Mr. Alasdair Morgan, Mr. Martin O'Neill, Mr. David Prior and Joan Walley be members of the Trade and Industry Committee.—[Mr. John Mc William, on behalf of the Committee of Selection.]

WELSH AFFAIRS
Ordered,
That Mr. John Bercow, Mr. Martin Caton, Paul Flynn, Mr. Ieuan Wyn Jones, Mr. Martyn Jones, Ms Jackie Lawrence, Mr. Richard Livsey, Ms Julie Morgan, Mr. Owen Paterson, Mr. Gareth Thomas and Mrs. Betty Williams be members of the Welsh Affairs Committee.—[Mr. John McWilliam, on behalf of the Committee of Selection.]

Housing Benefit
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Betts.]
12.54 am
Mrs. Jackie Ballard: I am grateful for the chance, even at this late hour—or perhaps early hour—to draw the attention of the House and the Minister to some of the issues relating to housing benefit that concern me and other hon. Members. The subject of the debate is technical and may not sound exciting enough to keep many hon. Members in the Chamber this morning, but behind the academic arguments, statistics and fiscal calculations are the human problems of homelessness and poverty, which I know are of concern to most, if not all, hon. Members—although I notice that no Conservative Members share that concern.
As many hon. Members will know, housing benefit is paid to people who pay rent and are on low incomes, whether they are in work, unemployed or retired. It is paid by local authorities, but the rules and regulations are determined nationally. There are two main issues that I should like to raise: first, the single room rent rule for tenants in the private sector; and, secondly, the level of housing subsidy repaid to local authorities.
The single room rent rule was introduced by the previous Government in October 1996. It means that young people aged under 25 no longer receive a level of housing benefit that enables them to afford suitable accommodation. Instead, housing benefit is limited for them to the average cost of shared accommodation in the area. That usually means living in houses of multiple occupation, or HMOs, and having to share facilities such as kitchens or bathrooms with other tenants. That change has had a terrible effect on the young: homelessness has increased, while those who are not homeless face increasing poverty as they try to eke out their benefit or low wages to pay the extra rent.
The emphasis on HMOs as the preferred option for young people is, quite frankly, daft and possibly dangerous. In a 1991 Joseph Rowntree Foundation survey, 40 per cent. of HMOs were found to be unfit for human habitation. The survey also revealed that residents in HMOs were 28 times more likely to die in a fire than those in self-contained accommodation. In addition, HMOs do not yet have to be registered. Yet that is the form of accommodation promoted by the housing benefit rules for young people. It is also true that many parts of the country do not have an adequate supply of that type of dwelling. How are young people supposed to live in HMOs if there is none? The previous Government would have said, "The market will respond," but the private housing market is a slow beast and responding to such changes in demand would take many years.
The effects of the single room rent regulation in my own constituency have reflected national trends. Two recent reports by the south-western citizens advice bureaux and the Somerset Social Policy Group have highlighted the effects. The average cost of shared housing in Somerset is estimated to be £5 to £15 higher per week than the local single room rent assessment; and the cost of self-contained one-bed accommodation is £35 to £45 a week higher. One survey found that, in my constituency, three out of four landlords imposed further charges in addition to rent—as much as £100 in some cases, for administration.

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Young tenants therefore have four choices if they cannot find a well-paid job. They can find new lodgings; pay for their rent out of their income or benefit; build up arrears and face expulsion; or try to negotiate a lower rent. Let me deal with each of those options in turn. The chances of finding new lodgings while on benefit are very slim. Landlords are distinctly reluctant to take on new tenants who are on housing benefit and those who do take on such tenants often provide the worst sort of accommodation. The option of paying the extra rent out of income can lead to tenants living at below subsistence level. After paying the rent, one client of the south-west citizens advice bureaux had only £8.86 left a week to pay for food and other items. Obviously, building up arrears is not a long-term option. Finally, bargaining with one's landlord to lower the rent proves unsuccessful in the vast majority of cases.
The effect has been to push young people out of reasonable accommodation into homelessness or unsuitable and substandard dwellings. Some might argue—indeed, many members of the previous Conservative Government did argue—that they should live with their parents, but in an age of increasing family breakdown, that is wishful thinking. It does not take into account the location of any parental home or serious family disputes or even abuse. It also does not take into account the natural desire of many people over 18 to leave home and live independently—sometimes the only way to ensure a continuing happy relationship with parents.
The consequences have been economic as well as personal. As the right hon. Member for Islington, South and Finsbury (Mr. Smith) predicted in a debate in the House in February 1996, the change acted as a disincentive to taking up work, for fear that any job might not last, so housing benefit would be lower once the person reclaimed. At the time, that change in the regulations was opposed by the Liberal Democrats and Labour.
I welcome the fact that the Government have acted swiftly to halt the extension of the rule to those aged 25 to 60. I also welcome the announcement by the Secretary of State of a review of housing policy and housing benefit. However, the new Government have taken no action to help young people on housing benefit—and remember, this is not only people who are out of work and might benefit from the welfare-to-work scheme, but people in low-paid jobs. They will continue to suffer under the proposals introduced by the previous Government.
I shall now discuss subsidy on local authority rent accounts. As hon. Members must know, the housing subsidy paid to local authorities consists of several elements, including rent rebates. During the past few years, the calculation has resulted in a subsidy payment to local councils that is significantly less than the rent rebates or housing benefit that they pay out. As local authorities are providers of social housing, inevitably a high proportion of their tenants will be either in low-paid jobs or out of work and therefore claiming housing benefit.
As the housing benefit bill increased in the late 1980s and early 1990s, the Conservative Government searched for ways to keep it down. One way is to make council tenants who are not on benefits effectively subsidise those who are, by withdrawing rent account subsidy. In 1996, the Government introduced a limit to local authority rent
170
increases, with increasingly heavy penalties for any rent increases in excess of the guideline figure. For my local authority of Taunton Deane, the guideline increase in 1996–97 was 67p per week, or 1.82 per cent. If the council had imposed a rent increase greater than the guideline, tenants not on rebate would have had to pay a progressively greater amount to offset the loss of subsidy. As hon. Members will be well aware, 1.82 per cent. is well below the rate of inflation now, and indeed that projected for the autumn.
The cost of housing benefit for local authority tenants in Taunton Deane this year is £7.3 million, of which the Government will repay only £3.1 million—less than 50 per cent. rebate, whereas housing associations are repaid 95 per cent.
It is estimated that, between 1990 and 1997, £6 billion will have been siphoned off from rent payments in local authorities to meet benefit bills. Figures from the Local Government Association's housing finance survey in England for this year show that local authorities will contribute more than £1.2 billion to the cost of rent rebates. Even allowing for the positive subsidy paid to 27 authorities, the Government are making a profit of £640 million from council house tenants this year alone.
To try to keep the national housing benefit bill down, local council tenants have for years been subsidising other tenants, both in taxation, as we all are, and in their rent. Now councils cannot afford to maintain their housing stock because they are not allowed to levy rent increases above inflation. Tenants rightly believe that their rent payments should be for landlord services, not for welfare payments to other tenants. If that £6 billion had been spent on repairing and maintaining council houses, how much better maintained would local authority stock be now? Fewer councils might then feel the need to sell off their stock to housing associations.
I contrast the treatment of local authorities and housing associations. The latter are repaid 95 per cent. of their housing benefit bill and are allowed to increase their rents above the inflation rate. That punitive regime was in place under a Government who were clearly hostile to local authority housing. The Labour Government profess not to be. In the debate on the Local Government Finance (Supplementary Credit Approvals) Bill, the Minister for London and Construction told me:
"After 18 years when local authorities have been denigrated and run down by the Conservatives, I can assure her that the Government will support them and see them having a strong and positive role in this area."—[Official Report, 17 June 1997; Vol. 296, c. 209.]
Finally, I wish briefly to discuss the Budget and associated changes in benefit. The most significant change is to non-dependant deductions, to be introduced next April. Non-dependant deductions create work disincentives, cause friction within families, and can result in rent arrears and even homelessness. Between 1993 and 1996, the top rate of non-dependant deductions increased from £21 to £32—a rise of 52 per cent. There have also been serious problems in the administration of non-dependant deductions. The claimant must find out the income of the non-dependant, who receives no notification of the implementation of the deduction from the claimant's housing benefit.
The most worrying part of the Budget was the announcement of a change to the period of backdating permitted from October 1998. It had been one year;

171
the Tories reduced it to three months; and we now hear that it is to be only one month. Moreover, that is in the context of severe problems in local government finances.
Because of the 18 to 25 single room rent rule, homelessness among young people has increased throughout the country. Because of the withdrawal of subsidy paid to councils and controls on their rents, poor tenants subsidise even poorer tenants and councils cannot afford properly to maintain their housing stock. A Government who say that they are committed to the relief of poverty and to social justice cannot allow that to continue. I await with interest the Minister's response to the issues that I have raised.
1.6 am
The Parliamentary Under-Secretary of State for Social Security (Mr. Keith Bradley): I listened carefully to what the hon. Member for Taunton (Mrs. Ballard) said, and I congratulate her on obtaining this wide-ranging debate. In the brief time available, I will try to cover the points that she raised, but she will appreciate that some of them are not the direct responsibility of the Department of Social Security. Those matters which would have been more appropriate for the Department of the Environment, Transport and the Regions will be looked into and we shall write to the hon. Lady on those in due course.
I am pleased to be able to make clear to the House two preliminary points. First, single room rents for the under-25s have been in place since October 1996. That was part of our inheritance from the previous Administration. We are now beginning to gather information about the effects of those arrangements on young people. Secondly, the other part of our inheritance on single room rents was the provision which extended them still further, to single people aged 25 to 59, which was due to come into effect from October this year. As the hon. Lady acknowledged, we have already acted decisively to ensure that that will not happen.
Dr. Peter Brand: Will the Minister, as a matter of urgency, take on board the need to look at the effects of the single room rent for people who need supportive lodgings, especially people with learning difficulties who live in the community and people recovering from mental illness? They may not be formally in the care of social services departments and may not receive 24 hours per day care, but they need support, which is extremely difficult to provide at the low rates currently applicable to the under-25s.
Mr. Bradley: I am grateful to the hon. Gentleman for his intervention. I was about to deal with that point. Time is extremely short and, with permission, I hope that I can get on and make some points in the time available. I will expand on them if necessary by writing to hon. Members.
I re-emphasise the fact that we shall always listen to what other hon. Members have to say about these crucial matters. We want to work with outside organisations that have an interest in social security matters, and we are keen to utilise their valuable expertise. That is the approach that I took in opposition, and 1 have no intention of changing it in government.
The best thing that we can do for young unemployed people is help them back to work. That is why we are introducing the new deal that will provide work, education
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and other opportunities to young people aged 18 to 24 who have been unemployed for more than six months. We have set out clearly the choices that will be available to them.
As I stated at the outset, we inherited a package of social security measures from the last Government, with the attendant expenditure implications, and we had to make hard choices—including the changes that we have made to non-dependant deductions.
Last October, the previous Government introduced single room rents for under-25s in order to restrict the amount of housing benefit paid to young people living in the private rented sector, and so control the cost to the taxpayer. The last Government justified that move by saying that housing benefit should not pay for accommodation that is more expensive than that which people would expect to occupy if they had to meet the rent from their own resources.
The report to which the hon. Member for Taunton referred entitled "Housing Benefit—The Unkindest Cut", which was produced by citizens advice bureaux in the western region, is of real interest to us. It will be valuable in building a national picture, which we need in order to understand the real effects. Only then will we be in a position to take prudent and fully considered decisions.
I am well aware of the concerns that were expressed at the time of introduction and, in order to address them, we are collecting information from a sample of local authorities about the number of young people affected and the level of housing benefit restriction. Analysis of that information has begun, but we need to know more. Meanwhile, we have already decided to exempt severely disabled people under age 25, and single young people with non-dependants residing with them, from the application of the single room rent. That change will be effective from October 1997.
I reminded the House earlier that we acted swiftly and decisively shortly after taking office when we decided to revoke regulations laid just before the election by the previous Administration. Those regulations would have extended the application of single room rents beyond the under-25s to most single people aged 25 to 59. In taking that decision, we considered carefully the view of the Social Security Advisory Committee—that the Government should not extend the existing single room rent rules for the under-25s without thoroughly reviewing their effects. We also took careful account of the views of hon. Members and local authority associations—in other words, we listened to them and acted accordingly.
Single room rents for the under-25s reflect the market rent for non-self-contained accommodation, without board, in the locality in which claimants live. Single room rents are determined by the independent rent officer service. Some people aged under 25 are already exempt from single room rents. They include local authority tenants, tenants of registered social landlords, and tenants in accommodation provided by county councils, housing associations, registered charities and voluntary organisations which provide care, support or supervision. Young people coming out of local authority care are also exempt until they reach the age of 22.
We have instituted a series of visits to local authorities, advice agencies and rent officers so that we can obtain direct information both about the impact of these changes

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on young individuals and about whether there are significant problems obtaining accommodation at rents at or below single room rents.
We have commissioned a survey to obtain information on housing benefit and the private rented sector. The results are expected next summer. We are also looking critically at our monitoring arrangements to see whether other steps can be taken to ensure that the measures introduced for the under-25s are properly monitored and their effects properly translated into any policy changes that may be appropriate.
I can tell the House that we have already received representations from a number of organisations about this measure, and there is some evidence of hard cases, as the hon. Lady identified, particularly where young people leave board and lodging and supported accommodation.
Supported accommodation and how it should be funded is the subject of a separate interdepartmental review, and we hope to introduce proposals on that in the near future.
It has to be said, however, that the evidence of hard cases is mixed and is of differing quality around the country. That is one very good reason why we want to make a better assessment of the overall position before we make any policy changes. As I said earlier, we shall continue to listen to organisations such as the National Association of Citizens Advice Bureaux, which are starting to provide the information, as evidenced by the report in the south-west. Similar reports have come from other parts of the country, and one has recently been produced in my own area, the north-west.
Meanwhile, it is worth reminding the House that there is provision for local authorities to give extra help. Local authorities have a discretionary power to provide additional help to people in the private rented sector whose rents exceed the general level of rents for similar property in their area—the local reference rent, on which the level of housing benefit is based. That discretionary power was extended to cover people affected by the introduction of the single room rent for people under 25.
Briefly, local authorities have discretion to increase housing benefit up to the level of the contractual rent—less, of course, any charges which are not eligible for housing benefit—where they decide that exceptional hardship would otherwise result. The term "exceptional hardship" is not defined in regulations. It is a matter to be determined in each individual case by the local authority, which is well placed to decide on the merits of each case.
The discretionary power replaced the earlier provision of additional help to prescribed groups—pensioners, families and disabled people. Additional help used to be available to anyone in those groups, irrespective of individual circumstances. The discretionary scheme, on the other hand, was designed to be more focused on individual circumstances.
Local authorities do not have unlimited discretion in this area: the extent to which they can exercise discretion is subject to an annual limit. The total for 1997–98 is about £47 million. Central Government's contribution to that is £18.25 million. We are looking at how the scheme is working, as part of our exercise to gather evidence on the impact of the rules for the under-25s. We will give all the results and information that hon. Members wish to give to our considerations full weight as the policy is properly analysed.
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Single room rents for single people under 25 are only one of a whole range of social security provisions that we inherited on coming to office.
On the matter raised by the hon. Lady about rent rebates, local authority tenants come under the housing revenue account, which is set by the Department of the Environment, Transport and the Regions, as it is now called. Guideline rents were set to ensure that rents were kept in check. As I said, this matter is determined by that Department and her comments on it are best referred for further consideration, through the debate, to that Department.
Housing association rents have the 95 per cent. subsidy, but the Department of the Environment, Transport and the Regions is about to consult on rent increases for housing authority tenants. Matters which need further consideration have been raised tonight and we shall look at them.
We have already made some important changes, which the hon. Lady has acknowledged, but the task that lies ahead in terms of an overall review of housing benefit in the context of housing policy is a huge one after 18 years of the previous Administration. We shall work with other Government Departments to develop our housing policies. We want to ensure that with those developments we do not continue to trap people in benefit. We want to generate, as much as possible, a hand up and not a hand out, which will generate personal responsibility.
We recognise that the consequences of many of the changes that we have inherited have forced people into difficult situations. The single room rent, which has been the focus of the debate, is clearly one of them. We recognise that the hard choices that we have to make on non-dependant deductions are not without pain themselves. Given the commitment that we gave in our manifesto to remain within spending limits within Departments, hard choices had to be made. At the same time, we want to monitor the impact of the changes that we shall be making to ascertain what the effect on families will be and to ensure that there are not continuing disincentives between those on benefit who are trying to get into work and those on low incomes who want to stay in work.
As the hon. Lady is well aware, single room rent applies only on new tenancies or renewals. A person on low income in a property will not be affected unless he or she has to make a fresh claim for housing benefit.
The hon. Lady made some excellent points, which we have noted. Our overall objective, however, is to modernise the social security system, and in the process to tackle poverty and welfare dependency while promoting work incentives. We want to develop a system which supports work, savings and honesty. Within that approach, we want to be vigilant in tackling fraud and ensuring value for taxpayers' money. As the House knows, we are committed to a complete review of the social security system, and housing benefit will clearly form a crucial part of that.
The hon. Lady will be well aware that the housing budget has escalated to about £3 billion-worth of expenditure as a result of policies that we inherited from the previous Administration. Tackling that bill and introducing a phased release of capital receipts so that we can start to rebuild and repair housing, while introducing

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new rented accommodation at a price that people can afford, are Government priorities. We shall set about the task in the fundamental reviews to which I have referred.
That is not to say that the issues that the hon. Lady has raised are not of fundamental importance. We must recognise the damage that has been done to communities by the previous Government's policies. We intend to
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tackle the issues as vigorously as we can to ensure that we have a decent society for everyone along with an affordable house.
I thank the hon. Lady for initiating the debate. I will ensure that she receives a reply in due course on those matters to which I have not been able to respond tonight.
Question put and agreed to.
Adjourned accordingly at twenty-three minutes past One o'clock.