Commons Sitting of 3 March 1997

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

    Heritage Sites
    Mr. Brazier: To ask the Secretary of State for National Heritage what plans she has to encourage more people to visit important heritage sites. [16695]
    The Minister of State, Department of National Heritage (Mr. Iain Sproat): My Department, principally through the Historic Royal Palaces agency and English Heritage, is continually striving to develop its historic properties to make them more attractive and accessible to visitors.
    Mr. Brazier: I welcome the England's Christian heritage programme of the Department, and I urge my hon. Friend to visit St. Augustine's abbey site in Canterbury, where much national lottery fund money is being invested in the 1,400th anniversary celebrations of St. Augustine's arrival in this country. I urge my hon. Friend to stress to his officials and to English Heritage the importance, when developing a monastery site, of showing its purpose and work, from prayer to alms giving and health care, rather than simply engaging in endless portrayals of dress, life style and so on.
    Mr. Sproat: My hon. Friend kindly invites me to visit the museum at St. Augustine's abbey, which is to be opened on 25 May by the Archbishop of Canterbury. I should very much like to be present on that day, if that is possible. My hon. Friend asks me to make sure that the Christian element of cathedrals, churches and so on is well demonstrated. He makes an important point, which I shall draw to the attention of Sir Jocelyn Stevens.
    Mr. Mackinlay: Will the Minister set up a Thames estuary initiative? There are numerous heritage sites on the estuary in Kent and in my county of Essex which are undervisited, although they are rich in our history and heritage, especially in relation to the defence of the United Kingdom. I refer especially to the two forts in Tilbury in my constituency, one of which is owned by English Heritage while the other is managed by the local authority. They would be greatly appreciated by many visitors, both from within the United Kingdom and from north America and Australia.
    Mr. Sproat: The hon. Gentleman takes an admirable interest in defence matters and defence heritage matters. I
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    shall certainly look at the two places that he mentions; if he would like to talk to me about how we might best promote them, I shall gladly meet him.

    Sport (Young People)
    Mr. Mark Robinson: To ask the Secretary of State for National Heritage what action she is taking to encourage young people to participate in sport. [16698]
    Mr. Sproat: The Government's sports policy document "Sport: Raising the Game", which was published in July 1995, sets out our strategy for encouraging young people to participate in sport. It particularly emphasises the importance of maximising sporting opportunities for young people within and outside formal education. Significant progress has been made in taking forward the various initiatives in the past year and a half. I made a detailed announcement of progress to the House on 14 February.
    Mr. Robinson: I thank my hon. Friend for that welcome answer. We in Somerset were delighted when Huish Episcopi secondary school received a grant of nearly £50,000 for a national lottery multi-sports complex project, costing £80,000 in all. Is that not precisely the way forward, and does my hon. Friend agree that it will encourage young people in Somerset and beyond to pursue sport with excellence?
    Mr. Sproat: My hon. Friend is absolutely right. The award for a multi-game complex was welcome, and I hope that many other schools, local authorities and communities will take encouragement from the success of that application and apply. The Sports Council for England now has a £2 million bid fund to which schools and local sports clubs can apply to improve the links between local sports clubs and local schools.
    Miss Hoey: Is the Minister aware of the crisis that is looming over the future of the Crystal Palace national sports centre? Is he also aware that, in relation to encouraging young people into sport, Crystal Palace has a two-pronged purpose? First, it is the only indoor training centre in London and, secondly, it is the only place in the whole of the south of England where we can have international and domestic competitions. Is he aware that there is a real worry about what has been happening to Crystal Palace and how that will affect the future of those schools that use it as a facility for pupils? The Minister should be spearheading the drive to find a way forward between Bromley council and the Sports Council.
    Mr. Sproat: I am aware of that concern. It is an important issue. The Sports Council is looking this minute at how best to solve the problem so that that part of England does not lack the sort of facility that Crystal Palace provides.
    Sir Alan Haselhurst: Given the obstacles in the way of sports being developed in as many schools as we would like, does my hon. Friend agree that the connection between sports clubs and schools is crucial, and that fresh efforts should be made to persuade schools that they should link with local clubs to open up more opportunities for young people?
    Mr. Sproat: I strongly agree with my hon. Friend, not least because one particular sport that we have in

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    common, cricket, is still played in only 50 per cent. of state schools in England—a poor percentage, which I wish to see increase. My hon. Friend should draw the attention of all the schools and local clubs in his area to the benefits of the lottery for such schemes, and in particular to the £2 million challenge fund that the Sports Council has for promoting links with local schools and local sports clubs.
    Mr. Maxton: Does the Minister agree that the best way of encouraging young people to participate in sport is to allow as many of them as possible to watch those sports on television? Will he therefore take the opportunity to congratulate the Scottish Rugby Football Union and other rugby football unions, which have signed a long-term deal with the BBC for the benefit of the development of the sport, rather than for greed, so that matches will be shown to the widest possible audience? Is it not a matter of great regret, certainly to him and to me, that two years from now, when France meets England again at Twickenham, the match will be seen by only a small minority of the population?
    Mr. Sproat: I am happy to congratulate the Scottish Rugby Football Union, not only on its decision, to which the hon. Gentleman referred, but on the tremendous result on Saturday in the match against Ireland. I also congratulate the Irish and Welsh rugby football unions on a decision that showed that they had the interests of the sport at heart. None the less, I would not criticise the English Rugby Football Union for anything that it may do, because it is up to sport itself to decide what is best for sport.

    Film Industry
    Mr. Whittingdale: To ask the Secretary of State for National Heritage what estimate she has made of the total earnings of the British film industry. [16699]
    The Secretary of State for National Heritage (Mrs. Virginia Bottomley): It is estimated that British films and co-productions earned £39 million at the United Kingdom box office and that UK film companies earned £495 million abroad in 1995. Now that British films and talent have won 30 nominations for the 1997 Oscars, the prospects for increased earnings are excellent.
    Mr. Whittingdale: I thank my right hon. Friend for those extremely encouraging figures. Does she agree that the large number of academy award nominations received by "The English Patient" and "Secrets and Lies" is further evidence that the British film industry is going from strength to strength, and will she join me in wishing those films and all the other British contenders every success on Oscar night?
    Mrs. Bottomley: Undoubtedly, the success to which my hon. Friend refers demonstrates the strength of the British film industry. Our studios are full, films are made here by companies from all around the world, audiences are up and investment is up. That is because we have an economy that is friendly to enterprise and to initiative and that allows people to keep the benefits of their success.
    Mr. Wigley: The Secretary of State will be aware of the numerous film productions in Wales in recent years,
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    including some exciting developments in recent weeks. Is she aware that, whereas in Scotland there is a Scottish film production fund, which helps to develop indigenous film producers and to extend the range of films that can be produced in Scotland, we do not have quite the same facility available in Wales? Will she examine that matter to maximise the benefit that this promising industry can bring to the economy?
    Mrs. Bottomley: As the hon. Gentleman will be aware, I have taken an extremely serious approach to the film industry. I established the Middleton committee, which made 11 recommendations. We have acted on eight of them. The Arts Council's recent initiative with the franchise is part of that overall strategy. I shall certainly speak with my right hon. Friend the Secretary of State for Wales on the matters to which the hon. Gentleman referred.
    Sir Anthony Durant: My right hon. Friend will be well aware that the British film industry's production rate is at its highest for some time, with some 127 films going into production. Does she agree that the lottery money recently allocated to the industry will encourage it? What other steps is she taking to continue this success story?
    Mrs. Bottomley: I particularly want to pay tribute to my hon. Friend for all that he has done to champion the film industry over the years. Last week, I was able to visit the British Film Commission at Berkhamsted to see its work and the archive, which has recently benefited from an additional £13 million of lottery money. We have been using a range of measures, which are set out in the Middleton report, to promote the industry further. We are now looking at the definition of a British film. Above all, what the industry needs is to be able to have the rewards of its endeavours, a flexible labour market and low non-wage labour costs. The Government's strategy, quite apart from the Department's initiatives, is delivering just that in Britain today.
    Mr. Skinner: Does the Secretary of State agree that one of the best British films of the past few months is "Brassed Off'? It is about a mining community where the pit has shut and the community has been destroyed as a result of the Tory Government and where the pit band is trying to find enough money to continue playing. Is it not pretty clear that a lot of people on the Wirral saw it, because they were brassed off last week?
    Mrs. Bottomley: I much appreciate the hon. Gentleman making that point. One of the things that has given me most pleasure as Secretary of State for National Heritage has been meeting many of those involved in brass bands which are now receiving lottery awards. Indeed, there have been 91 awards for brass bands; the Easington colliery band, which was the first brass band I met when I became a Minister nine years ago, now has new instruments as a result of the lottery.
    More significantly, the hon. Gentleman will be aware that many communities that faced great difficulties because of the loss of jobs in the mining industry now have more jobs in the new sectors, many of them related to the cultural sector and the major regeneration that has resulted from my Department's initiatives.

    Lottery Grants (Charities)
    Miss Lestor: To ask the Secretary of State for National Heritage to what extent the revised criteria for national lottery grants will support the work of British charities providing emergency medical relief in the developing world, with special reference to Merlin; and if she will make a statement. [16701]
    Mrs. Virginia Bottomley: Charities based in the United Kingdom and working overseas, including Merlin, were eligible to apply for a grant from the National Lottery Charities Board under its international grants programme. In framing the priorities and policies for the programme, the board consulted British charities and voluntary organisations working overseas. Their view was that funds would be best spent in supporting long-term development to help people to help themselves, rather than on emergency provision, for which there were other sources of funding.
    Miss Lestor: In view of the declining aid budget, the effect of the lottery on small charities and the fact that the requirement to plan nine months in advance makes it difficult for organisations such as Merlin—which is, as the Secretary of State said, an emergency relief organization—should not the criteria be changed to include, say, training for staff, the stockpiling of medicine and the provision of infrastructure? That would enable such organisations to qualify for lottery money, and exclude them from the nine-month criterion. Will the Secretary of State consider that proposal?
    Mrs. Bottomley: The hon. Lady will be aware that these precise decisions are matters for the charities board. I think that it will examine the £25 million of the first round to see what lessons can be learned, but I commend it on the fact that almost £500 million has been allocated in virtually 7,000 awards. I am pleased that some charities about which the hon. Lady is concerned have benefited. I believe that the Red Cross, for example, has had about 12 awards; Oxfam, too, has received an award, and I know that it hopes for a substantial award in the new round. I wish Merlin well and greatly respect its work.

    Anglers
    Mr. Robert Ainsworth: To ask the Secretary of State for National Heritage what estimate she has made of the number of anglers in the United Kingdom. [16703]
    Mr. Sproat: The National Rivers Authority commissioned a national angling survey in 1994 which concluded that there were 3.3 million freshwater and sea anglers aged 12 and over in Great Britain.
    Mr. Ainsworth: I thank the Minister for that reply. Given that angling is clearly the most popular participatory sport in the country, why did it receive a miserly £72,500 of development money from the Sports Council last year? Why was angling not even mentioned in its list of the top 22 sports? In the light of their appalling record, will the Government give a commitment to match Labour's commitment to oblige the Sports Council to give more assistance to angling for its administration needs?
    Mr. Sproat: The amount that the Sports Council gives in grant to angling or any other sport is a matter for the
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    Sports Council. However, the hon. Gentleman will be aware that £500,000 from the national lottery and £100,000 from sportsmatch have gone to angling. He will be further aware of the Government's record of improving river quality, ending the problems caused by saboteurs through the Criminal Justice and Public Order Act 1994 and reviewing predatory bird and other measures, which shows our commitment to the popular sport of angling.
    Sir Patrick Cormack: Does my hon. Friend accept that country sports in general, and angling in particular, are enjoyed by a wider cross-section and by more people than any other sport in the country? Does he agree that the last thing any of them want is Government interference?
    Mr. Sproat: They quite like Government money from time to time. None the less, my hon. Friend is absolutely right. One of the most pleasing aspects of the past few months has been that the three bodies representing game, coarse and sea angling have come together for the first time, and the Sports Council will be keen to help.
    Mr. Pendry: Is the Minister aware that my hon. Friend the Member for Coventry, North-East (Mr. Ainsworth) is absolutely right about the fact that anglers are furious with the Government for ignoring their legitimate claims to recognise angling as a major sport? Is it any wonder that the president of the National Federation of Anglers wrote to the Prime Minister to bemoan the fact that the Government had no policy on angling, in contrast with the Labour party, which has a clearly defined charter for angling? The NFA president concluded by stating the obvious—that anglers are coming to the view that Labour cares about angling but the Government do not. Will the Minister, at the very least, dissociate himself from those in his party who claim that Labour will ban angling after we win the general election? Furthermore, on behalf of the Government, will he match our firm commitment to the sport?
    Mr. Sproat: In anticipation of some major exaggeration of the contents of Labour's so-called charter for angling, I reread its few pages this morning, and I was surprised by how little it said.
    I mentioned earlier some measures that the Government have undertaken. We have also abolished non-domestic rates for angling riparian owners—a measure that was welcomed by the angling community. That underlines the fact that the Opposition are basically hostile to country sports, and that no angler who wants his sport to be maintained should be so foolish as to vote for the Labour party.
    Mr. Peter Atkinson: Does my hon. Friend agree that the worst threat facing angling is Labour's policy to give an unrestricted right of access to riverbanks, canal banks and lakesides, which would make the management of fisheries impossible and would destroy the opportunity for anglers to enjoy their sport quietly?
    Mr. Sproat: My hon. Friend is right: the Labour party poses a serious threat to angling, and he has mentioned one aspect of that threat.

    Plymouth Millennium Fund
    Mr. Jamieson: To ask the Secretary of State for National Heritage what representations she has received in respect of the Plymouth millennium fund. [16704]
    Mrs. Virginia Bottomley: The Millennium Commission, of which I am chairman, has received representations from the Port of Plymouth, the West Country tourist board, the Plymouth marketing bureau and five individuals on Plymouth 2000 Partnership's bid "Plymouth Waterfront—A Celebration of Discovery". The bid is still under consideration. The commission is always pleased to receive representations on a project, whether supportive or otherwise. Representations are one of the key criteria used in assessing applications for funding.
    Mr. Jamieson: Does the Secretary of State accept that, because it reflects the area's maritime history, the Plymouth 2,000 millennium bid is most deserving? Will she ensure that it is considered in its entirety? Will she also clarify the purpose and role of individual commission members in trying to change individual bids?
    Mrs. Bottomley: The commission is looking extremely sympathetically at Plymouth's proposals. Not only the hon. Gentleman but my hon. Friends the Members for Plymouth, Drake (Dame J. Fookes) and for Plymouth, Sutton (Mr. Streeter) have spoken at length to me about the proposals. Mayflower harbour, Plymouth and the Royal William yard, Plymouth are being considered in particular. I have also had discussions with Baroness Cumberlege, the sponsor Minister, who has been extremely helpful in relation to Plymouth's cause and concerns. Sutton harbour, Plymouth, the national marine aquarium and other projects have already received substantial funding, and I hope that the Millennium Commission can add to the £4.5 million of lottery money that is already being spent on 35 awards in the Plymouth area.

    Individual commission members may have their own views and opinions, but they will simply refer those back to commission meetings, when matters are debated carefully by all the individuals concerned.

    Tourism Grants
    Mr. Waterson: To ask the Secretary of State for National Heritage if she will reintroduce section 4 grants for the tourism industry in England. [16707]
    Mrs. Virginia Bottomley: The Government have no plans to reintroduce section 4 grants in England. Tourism is a highly successful industry and is increasingly making use of many opportunities to benefit from public money. Those opportunities include challenge funding, the single regeneration budget and, in eligible areas, the European regional development fund. Moreover, the national lottery is playing a major role in financing exciting new capital projects, many of which help to encourage tourism and bring widespread benefits to communities across the country.
    Mr. Waterson: Is my right hon. Friend aware that, like me, many hoteliers and guest house owners in my
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    constituency remain puzzled about why those grants are payable in other parts of the United Kingdom but not in England? Is she also aware that those same constituents very much welcome the fact that, under the National Heritage Bill, funding will now be available for great examples of our national heritage, such as Eastbourne pier?
    Mrs. Bottomley: I know the concerns of my hon. Friend's constituents. If the Labour party had its way, there would of course be no coherence in what happens in the different parts of the United Kingdom, and I think that would be very much more alarming. I well recall the visit to Eastbourne pier, and the inconsistency of piers in private ownership being unable to benefit from lottery money, unlike those in charitable or local authority ownership. I am delighted to say that, last Thursday, the National Heritage Bill received Royal Assent. Therefore, my hon. Friend's pier, like other piers in the realm, will now have lottery assistance available when appropriate.
    Mr. Pike: Does the Secretary of State realise that tourism is rapidly developing in industrial areas such as Lancashire and Yorkshire, and that section 4 and other grants to help the industry develop are very important for their employment prospects and for taking advantage of existing tourism facilities?
    Mrs. Bottomley: Old Labour shows its face once again. Of course a cheque from the centre is always helpful to those who apply, but the Government believe that the reason why we have had the incredible boom in the tourism industry is that we keep taxation and regulation to the minimum. We have been able to boost the many national assets which are such an attraction for people around the world. There is no doubt, however, that well over £1 billion has gone from the national lottery to many massive regeneration projects, such as the Lowry centre and redevelopment of Newcastle's Sunderland glass centre. Across the United Kingdom, city centres are being restored. Only last week, a massive £140 million was awarded to museums, and the key awards were in Manchester. I think that everyone will agree on the awards' importance and significance for the tourism industry.

    "Success Through Partnership"
    Mr. Simon Coombs: To ask the Secretary of State for National Heritage what responses she has received to her strategy document "Success through Partnership: A Strategy for Tourism". [16708]
    Mrs. Virginia Bottomley: "Success through Partnership: A Strategy for Tourism", published on 5 February, has been extremely well received. It has received much positive press coverage and we have had many letters welcoming its overall comprehensive nature, its key targets and its specific points for action. Work on the action plan has already begun, both within my Department and elsewhere.
    Mr. Coombs: Can my right hon. Friend confirm that 1995 was a record year for British tourism and that 1996 is likely to exceed that record when the figures are finally available? Does she agree that the proceeds

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    of the national lottery are making possible a massive increase in our tourism infrastructure, whether it is the new railway heritage museum in Swindon in my constituency or the new Tate gallery of modern art in the Bankside power station in London? In the context of the development of the south bank, can my right hon. Friend tell the House when we are likely to get a positive decision on the redevelopment of the south bank centre itself?
    Mrs. Bottomley: I can confirm my hon. Friend's comments. We have reversed a 10-year decline in our world tourism share. In 1995, earnings from overseas tourism grew by 9 per cent. in France and by 15 per cent. in Spain and Italy. In the United Kingdom, there was 26 per cent. growth, with earnings now amounting to more than £22.5 billion. That is a formidable achievement and I anticipate that next year will be even better.
    I also commend my hon. Friend's comments about investment in many heritage, arts and culture-related projects, such as those in Swindon in his constituency. We want to boost domestic tourism further. The south bank project is another major renaissance of the Thames initiative which will be of lasting value and which will lead up to the millennium year, when we shall see opportunities for our arts, our heritage and our cultural life as never before. Those behind the south bank project, like other applicants, must be sure that they have completed the necessary processes, paperwork and business plan before their applications can be properly considered.
    Dr. John Cunningham: The right hon. Lady forgot to mention that the Government's policy document on tourism had to be withdrawn because it was full of spelling mistakes. It turned out that those who wrote it could not even spell "Prime Minister".
    As there has been considerable reference to lottery funding, will the right hon. Lady explain why about 90 per cent. of lottery grants remain in the bank unspent? Is it not because the matching funding conditions are too onerous even for some of our major national institutions? Does that not mean that, in areas of less affluence, many people are being excluded altogether from successful applications because they have no chance of meeting the matching funding requirements?
    Mrs. Bottomley: The Labour party is a great believer in preaching the need for homework to everybody. I suggest that the right hon. Gentleman does his own homework a little better. So far, partnership funding has been running at about £1.41 for every £1 necessary; in other words, partnership funding has exceeded expectations. In areas where difficulties may emerge, there is the flexibility for all the lottery distributors to vary the funding required. The Sports Council, for example, will provide 90 per cent. of funding, if necessary; the arts and heritage fund also has flexibility. If money is unspent so far, it accrues interest which then goes to the good cause.
    I will investigate any matters concerned with the tourism strategy. I suspect, however, that the right hon. Gentleman's comments are just another fanciful fairy story invented by the Labour party.

    Arts (Private Sector Sponsorship)
    Mr. Richards: To ask the Secretary of State for National Heritage what steps she is taking to encourage private sector sponsorship of the arts. [16709]
    Sir Wyn Roberts: To ask the Secretary of State for National Heritage what discussions she has held on promoting business support for the arts. [16711]
    Mr. Sproat: The Government's national heritage arts sponsorship scheme, otherwise known as the pairing scheme, was established in 1984 to bring new sponsors into the arts. It continues to be a great success. To date, it has brought more than £115 million of new money into the arts and more than £37 million of awards matching more than £77 million of business sponsorship.
    Mr. Richards: I am grateful to my hon. Friend for that reply. Is he aware that, although the North Wales music festival attracts widespread support from the private sector, it is continually looking for new sponsors? Will he join me in congratulating North Wales Blue Grass festival—[Laughter.] Opposition Members may laugh, but it is not a festival to celebrate the French victory over England at Twickenham on Saturday. Will my hon. Friend join me in congratulating North Wales Blue Grass festival on attracting sponsorship from North Wales Independent Press?
    Mr. Sproat: Yes, I shall certainly join my hon. Friend in doing that. This year in Wales there have been 39 awards totalling £125,000, leading to a total injection into artistic schemes of well over £250,000.
    Mr. Barry Jones: Will the Minister of State accept a joint invitation to St. Asaph's cathedral, where the North Wales music festival takes place? If he does, he will discover that the cathedral's acoustics are perfect; many of our regional orchestras play there. How can he help the festival, which is in dire need of sponsorship?
    Mr. Sproat: I thank the hon. Gentleman for his kind invitation to the festival. I am more than willing to take it up, given that he invited me to the Liverpool Philharmonic a couple of years ago and I greatly enjoyed myself. I shall gladly consider the hon. Gentleman's point about the shortage of funds to see whether I can give advice on how to find help.

    Weekly Lottery Draws
    Mr. Tony Banks: To ask the Secretary of State for National Heritage what discussions she has had with the Office of the National Lottery regarding the introduction of additional weekly national lottery draws. [16710]
    Mrs. Virginia Bottomley: None.
    Mr. Banks: That is a great pity; it shows just how out of touch the Secretary of State is with the way in which people feel about the second weekly draw. Camelot could have used separate numbers for the second weekly draw, but it deliberately chose not to do so. Some 50 per cent. of people who play the lottery use the same numbers, so they are automatically dragged into the lottery.

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    Camelot is now talking about a third weekly draw. When will the right hon. Lady get a grip on the matter? This is her last appearance as Secretary of State answering questions on national heritage, and all Opposition Members are very pleased about that, but she still has a few weeks left to get a grip on Peter Davis, the toothless Oflot watchdog, and to try to ensure that Camelot looks after the people who play the lottery, not itself.
    Mrs. Bottomley: There is no question of the lottery being anything other than extremely carefully regulated. Parliament laid down the regulator's duties: he must protect players' interests, ensure propriety and ensure that the return goes to good causes. I am delighted that the hon. Gentleman's constituency has already benefited from 13 awards of more than £1 million. In his area of London, another nine awards for well over £1 million are providing regeneration and worthwhile activities and opportunities for the young. So far, there has been no evidence of excessive participation—the average household spends about £2.40 a week, which is much less than a packet of cigarettes. There will be no further activity if it might jeopardise the good name and effectiveness of our very successful national lottery.
    Mr. Nigel Evans: I partly support the idea of using a different set of numbers for the mid-week game, but does my right hon. Friend get as brassed off as I do by the moaners and whingers on the Opposition Benches who can see no good in the national lottery? We have the most successful national lottery in the world; it has raised more than £1 billion for good causes, some of which involve small rural activities that have never received grants in the past. At one stage the Opposition wanted to cap the limit on prizes, but they changed their mind when they discovered how successful the national lottery was. Is it not about time that they started to spread the good word about the national lottery and stopped moaning and complaining about it?
    Mrs. Bottomley: Good news is always bad news for the Labour party. Its attitude to the national lottery is an example of its endless meddling and tinkering. Labour Members could not bring themselves to support the national lottery on Second Reading.
    Mr. Tony Banks: We did.
    Mrs. Bottomley: No. They sat on the fence and abstained. What we are now hearing is a "united" Opposition who are only too keen to demonstrate that they all did different things—I believe that to be true, and I think that many others do too. They deeply resent Camelot because it makes a profit—they are hostile to success and want to penalise anybody who has made a profit. They said that they would cap the prizes, but now believe that that is unpopular. Most of their suggestions about the lottery look like applications for a Sports Council kite-flying prize. As for the rest of us, we thank goodness that the national lottery was introduced by this Government, that it was this Prime Minister's idea and that it is enormously benefiting the towns and cities of this country.
    Mr. Maclennan: What action does the Secretary of State propose to take to deal with the legitimate concerns
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    of the football pools industry about the impact of the mid-week draw on its fortunes and, in particular, on the Foundation for Sport and the Arts? Does she believe that she can save that valuable institution?
    Mrs. Bottomley: I accept the difficulty that many of the pools organisations have had, and it is important to ensure that we can support the various initiatives that they were assisting. However, at a time when £441 million has already been spent on 2,603 awards for sports, we can see that sports in this country are benefiting as never before.
    Sir Donald Thompson: Did my right hon. Friend hear any complaints about the national lottery when she visited my constituency a few Fridays ago, and met business women and some of the ladies and gentlemen who have benefited from the £2 million of lottery money and millennium money that my constituency has received in the past few years?
    Mrs. Bottomley: I enormously enjoyed my visit to my hon. Friend's constituency. I was delighted to meet carers and the group from the nursery class. Last week, I was struck to learn that, apparently, 277 playgroups have already received lottery awards, and as the figures come through, it becomes progressively more exciting to see the difference that they make. Above all, I commend my hon. Friend's youth council. Last week, we launched our "Young people make a difference" strategy, which is intended to ensure that all young people who want to volunteer can do so. There is now up to £500 million available for youth volunteering initiatives, and I also announced up to 130 posts at volunteer bureaux with youth facilitators. I believe that that will make a lasting difference to our young people and our communities, which I know will be extremely welcome to all responsible citizens.
    Dr. John Cunningham: Does the Secretary of State recognise that the football world will be deeply disappointed by her response in respect of the Football Trust? The trust's income has decreased by two thirds as a consequence of the huge success of the national lottery in raising funds; that in turn has prevented the essential safety work on football grounds that the public, fans and all those who love our national game want. Is it not clear that there are extenuating—indeed, very special—circumstances, and should she not join the Labour party in our commitment to make up that shortfall with money from the national lottery so that essential ground safety work can proceed?
    Mrs. Bottomley: As ever, Labour Members look for a cloud over every silver lining—they are desperate to look for the downside. If ever anybody had any doubt about how Labour Members would treat the national lottery, they have heard this afternoon that there would be meddling, tinkering and interference. There have been 355 lottery awards for football—never has so much gone into sport and into football in particular. Those of us with slightly longer memories than the right hon. Gentleman will recall that Euro 96 was a spectacular success and that our stadiums are among the best in the world, which had a great deal to do with the Government and the steps that we took to ensure that.

    Popular Music Industry
    Mr. Fabricant: To ask the Secretary of State for National Heritage what assessment she has made of the impact of the British popular music industry on (a) British cultural life and (b) tourism. [16713]
    Mrs. Virginia Bottomley: British popular music makes an enormous contribution to the cultural life of the country. Domestic sales rose in 1996 to £1.08 billion, making ours the fourth largest music market in the world. Twenty per cent. of recordings sold worldwide contain a British element. British talent and technical expertise reach hundreds of millions of homes around the globe.
    Mr. Fabricant: I thank my right hon. Friend for that answer. Does she recall that, in the 1970s, many rock and pop stars left the country because of punitive taxation? Is she delighted that, under the present Conservative Government, the Spice Girls have stayed in this country, and will she congratulate the Spice Girls on winning the best single award in the Brit awards? Was she heartened, as I was, to hear that Margaret Thatcher was the original Spice Girl?
    Mrs. Bottomley: Yes.
    Mr. Cunliffe: Will the right hon. Lady request the national lottery board to keep a better sense of proportion, fairness and, to some degree, equity? How can it reconcile giving £55 million to the royal opera house in London for wealthy pleasure-seekers while refusing substantial grants to the Marie Curie Cancer Care unit, which operates hospices for dying people? The board has given 277 times more in subsidies to the opera than in grants to hospices. How can we, as Christians, given the criteria that have been set, accept the encouragement of the growth of opera houses as against hospices?
    Madam Speaker: That was a very interesting question, but it does not relate to the one that is on my Order Paper. Would the Minister like to make a response?
    Mrs. Bottomley rose—
    Madam Speaker: A generous lady.
    Mrs. Bottomley: I thought that the hon. Gentleman was auditioning for next year's Brit awards, but I was going to respond anyway.
    Although I have a great deal of sympathy with the hon. Gentleman's point, I am pleased that £160 million has been spent on health-related charities; he knows how strongly I felt about that when I first became Secretary of State. However, I believe that he would miss the point if he failed to recognise what an incredible opportunity the national lottery has been for our country, enabling us to invest in our arts, heritage and cultural life.
    Sir Ernest Hall, a member of the Arts Council, said:
    "Through the Lottery we have an opportunity to do for our towns and cities what the enlightened patronage of the Papacy and the Medicis did for the cities of Italy. We can realise Blake's dream of making England, 'an envied storehouse of intellectual riches'."
    I believe that it is a magnificent opportunity. As the Department reaches its fifth anniversary, it can see the way in which it has invested in the initiatives that matter to the people of this country.

  LORD CHANCELLOR'S DEPARTMENT

    Legal Aid (Industrial Tribunals)
    Mr. John Marshall: To ask the Parliamentary Secretary, Lord Chancellor's Department what representations he has received on extending legal aid to cases before industrial tribunals. [16725]
    The Parliamentary Secretary, Lord Chancellor's Department (Mr. Gary Streeter): A number of representations on extending the scheme to cases before industrial tribunals and other tribunals were received by the Department in response to the Lord Chancellor's Green Paper on legal aid published in May 1995.
    Mr. Marshall: Does my hon. Friend agree that such a course of action would merely burden the already overburdened legal aid fund, place additional burdens on industry and make job creation more difficult? Will he therefore comment on the interview in the New Statesman with Lord Irvine of Lairg?
    Mr. Streeter: My hon. Friend knows that our policy is to bring the legal aid budget under control—to bring an end to its demand-led, runaway nature before any thoughts of applying legal aid elsewhere can be entertained. I was therefore shocked to read the shadow Lord Chancellor's proposals to extend legal aid to industrial tribunals that appeared in the New Statesman in December. [Interruption.] I have it here and can read it if the hon. Member for Brent, South (Mr. Boateng) wants me to.
    Every year, 80,000 cases are heard by industrial tribunals. If only half of them were to attract £1,000 per case, that would add £40 million to the legal aid bill. Is it any wonder that the first act of any unlikely incoming Labour Government would be to have a summer Budget to pay for their massive spending plans?
    Mr. Janner: Has the Minister considered what steps he could take to provide aid, legal or otherwise, for himself and his colleagues when they consider themselves unfairly dismissed by an ungrateful but fairly discerning electorate?
    Mr. Streeter: We Conservatives believe in democracy. Although the hon. and learned Gentleman has served with distinction in the House, he has never been very good at predicting the future: he was wrong in 1992 and he is wrong today.

    Legal Aid Reform
    Mr. Mark Robinson: To ask the Parliamentary Secretary, Lord Chancellor's Department when he last met the chief executive of the Legal Aid Board to discuss reform of the legal aid system. [16727]
    Mr. Streeter: I last met the chief executive of the Legal Aid Board on Wednesday 26 February 1997. We reviewed the White Paper reforms, which will cash-limit the budget, set national and regional priorities, dispense legal aid through block contracts with high-quality

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    providers, and tighten the means test to weed out undeserving cases. Good progress is being made, but some of these reforms require primary legislation.
    In the meantime, we have reformed the way in which solicitors and barristers are paid, which gives us greater control and will reduce costs. We have set up a special investigations unit to crack down on bogus claims. That is already beginning to bear fruit. We have also introduced regulations to stop legal aid abuse by the apparently wealthy.
    Mr. Robinson: I thank my hon. Friend for that reply, as far as it goes, but I am sure that he is aware that many of my constituents read reports in the tabloid newspapers to the effect that large sums are being paid in legal aid to undeserving people who could well afford to pay. Are there any steps that he could take now to crack down on the abuse of legal aid?
    Mr. Streeter: My hon. Friend is right to press me on this point. Although our reforms are right and positive results and savings from the measures that we have already taken are beginning to emerge, it remains clear that too many cases that should not get it are still receiving legal aid. Accordingly, my Department is now looking at two further areas in which I want to make more progress.
    First, we shall review the use made by the Legal Aid Board of counsels' opinions. We shall explore ways of cracking down on over-optimistic opinions from barristers that lead to legal aid being granted when it should not be.
    Secondly, it is increasingly obvious that many of the cases that cause widespread public concern are decisions by area committees reversing initial refusals by the Legal Aid Board. We shall explore ways of bringing area committees more into line with public concern and common sense.
    Mr. Boateng: What action does the Minister propose to take to deal with the grotesque imbalance between public expenditure on civil legal aid for ordinary, hard-working, honest taxpayers, and on criminal legal aid for those who are convicted of crimes yet are required to pay nothing towards the cost of their defence? Is it not time to recognise the fact that, under the Labour Government, about 80 per cent. of households had access to civil justice, whereas under this Government that number has fallen to 49 per cent.? Is it not time to return access to the courts to the ordinary, hard-working British people?
    Mr. Streeter: Once again the hon. Gentleman appears to be calling for a change in the rules that will enable more people to claim and more money to be spent by the Government. He is a big-spending member of the Labour party—I do not mean just his suits. He does not seem to realise that the Government cannot spend money that they do not have. If we are to spend more, we must tax more. This is old Labour in a new suit: tax and spend.

    Legal Aid Costs
    Mr. Fabricant: To ask the Parliamentary Secretary, Lord Chancellor's Department what assessment
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    he has made of the per capita cost of the legal aid programme relative to those for similar programmes in other EU member states. [16728]
    Mr. Streeter: None, but it is widely believed that our legal aid system compares favourably with any in the European Union.
    Mr. Fabricant: I am disappointed that my hon. Friend could not provide me with the actual figures. If he could, I believe that they would show that this country is more than generous with legal aid compared with other European countries.
    I wish to press my hon. Friend on the point made by my hon. Friend the Member for Somerton and Frome (Mr. Robinson). What action will he take to target legal aid precisely—with particular reference to the area committees that he mentioned earlier?
    Mr. Streeter: My hon. Friend will know that the White Paper reforms that we announced last year and the measures that I announced this afternoon will do exactly what he asks: target resources where they are most needed. It is now clear that the fact that our legal aid system is as comprehensive as any in the European Union can be added to the good news of rapidly falling unemployment compared with our European competitors, to demonstrate that life is better in a Conservative Britain.

    Legal Aid Budget
    Mr. Hawkins: To ask the Parliamentary Secretary, Lord Chancellor's Department if he will make a statement on his plans to control the legal aid budget. [16729]
    Mr. Streeter: The Government have embarked on a radical reform programme to control the legal aid budget. We are committed to taking the reforms forward through consultation and piloting, and some key changes will require legislation. My hon. Friend will have heard the additional measures that I mentioned some moments ago.
    Mr. Hawkins: I am grateful to my hon. Friend for that answer. He is obviously aware of the great concern about the amount of legal aid money that is being spent on those who could afford legal representation from their own funds. Will he confirm that, when looking at the system, he will also look at the dubious circumstances in which some community law centres purport to operate? He will be aware—I have raised the matter with his Department in the past—that the Charity Commission has expressed grave concerns about some of those law centres, which, effectively, act as a front for the Opposition.
    Mr. Streeter: I shall now look even more closely at the law centre problem that my hon. Friend rightly raises with me. It is important to get the balance right in our legal aid reforms. We are committed to helping those who need help to gain access to justice, but we must ensure that the taxpayer is not overburdened. It is disappointing that the Labour party does not support our proposal to introduce a cash-limited legal aid budget. I described it as an expensive locomotive to which we seek to apply the brakes; I have no doubt that, under a Labour Government, it would become a runaway train.
    Mr. Campbell-Savours: Am I correct to assume that the Minister has just announced two completely new

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    policy initiatives that would have the effect of denying legal aid to some of my constituents on very low incomes? What really matters, and what is winding up the public, is how it is possible for very wealthy people so to organise their private affairs and assets that their declarations to the legal aid authorities effectively amount to fraudulent applications for money and legal aid. Ministers should concentrate on those areas rather than tighten up the criteria through little sly deals that deny my constituents on low incomes proper legal representation.
    Mr. Streeter: I am sorry but, once again, the hon. Gentleman is badly out of date. We have already taken the measures necessary to close the door on legal aid abuse by apparently wealthy individuals. I referred earlier to the special investigations unit that we set up many months ago, which is now bearing fruit. It is beginning to work and we have closed that door. The hon. Gentleman is mistaken; not a single constituent of his with a genuine legal issue who should be supported by the taxpayer will lose out as a result of our reforms. We are closing the door on abuse on behalf of the British taxpayer.

    Civil Dispute Resolution
    Mr. Bernard Jenkin: To ask the Parliamentary Secretary, Lord Chancellor's Department what is his policy towards alternative dispute resolution in civil justice; and if he will make a statement. [16730]
    Mr. Streeter: The development of alternative dispute resolution in all its forms has broadened consumer choice in dispute resolution. ADR can provide a more appropriate way to settle many disputes where the parties do not need recourse to the coercive powers of the courts. My party is doing all that it can to encourage ADR.
    Mr. Jenkin: Would not one method of reducing the legal aid bill be the provision of more avenues to ordinary individuals to settle disputes—such as those between neighbours or between small businesses about debts—using an adjudicator rather than going through the full courts process? Will my hon. Friend and his Department do everything possible to ensure that those avenues are more widely available?
    Mr. Streeter: My hon. Friend is right to raise that point. Under the Woolf proposals, it is our intention to put alternative dispute resolution at the heart of civil justice. He will be interested to know that we produced a booklet last year entitled "Resolving disputes without going to court" to alert potential litigants to the possibilities of ADR. Last May we also set up a pilot scheme based in the Central London county court for all cases in which claims exceed £3,000 and we are monitoring the results of that carefully. There is no doubt that ADR has a large part to play in the British civil justice system.

    Criminal Justice Costs
    Mr. Nigel Evans: To ask the Parliamentary Secretary, Lord Chancellor's Department what plans his Department has to reduce the cost to public funds of those aspects of the criminal justice system for which his Department is responsible; and if he will make a statement. [16731]
    Mr. Peter Atkinson: To ask the Parliamentary Secretary, Lord Chancellor's Department what plans his Department has to reduce the cost to public funds of those aspects of the criminal justice system for which his Department is responsible; and if he will make a statement. [16734]
    Mr. Streeter: A number of initiatives are under way in my Department to reduce costs. They include the radical proposals for legal aid in the White Paper entitled "Striking the Balance", steps to reduce delay in the courts, such as the introduction of plea and directions hearings in the Crown court, and a review of time limits in the magistrates courts. In taking forward those initiatives, care must be taken to balance the many conflicting interests of those involved in the criminal justice system.
    Mr. Evans: Does my hon. Friend agree that my constituents would be rightly concerned that the legal aid budget doubled between 1990 and 1995 to £1.4 billion, and is due to go up yet again this year? Can he assure them that those who are in real need will get legal aid, and that we will get more value for the pounds that are spent?
    Mr. Streeter: My hon. Friend is right. We want to ensure that those who have genuine grievances have access to justice, but we want to get the balance right between their interests and those of the taxpayer. All our reforms are shaped to that end. I believe that they are right and that they will make a significant difference to the legal aid budget as they are rolled out.
    Mr. Atkinson: Does my hon. Friend accept that one of the greatest uncounted costs in a criminal justice system is delay, which wastes so much of the time of witnesses and, in particular, of the police, who can ill afford it? Will he therefore welcome the consultation paper issued by my right hon. and learned Friend the Home Secretary to consider ways of speeding up justice, including the possibility of ending the right of jury trial for some defendants?
    Mr. Streeter: My hon. Friend is right to draw attention to the important statement made by my right hon. and learned Friend the Home Secretary last week. We will seek the views of people in Britain about those major, radical proposals to reform our criminal justice system. Again, it is a matter of getting the balance right. I believe that our proposals have a great deal of merit, and we look forward to the consultation process.

Information Technology (Government Strategy)
3.31 pm
The Chancellor of the Duchy of Lancaster (Mr. Roger Freeman): Last November, I laid before Parliament the Green Paper "government. direct" (Cm 3438) setting out the Government's strategy for the electronic delivery of central Government services. This strategy forms part of the Government's information society initiative led by my hon. Friend the Minister for Science and Technology, and complements our policies to promote the use of IT in business, in education and by the public at large, and to help this country adapt to the information society. Today I have placed in the Library, and it is available in the Vote Office, a paper reporting on the results of consultation on the Green Paper and indicating the way forward to a radical change for the better in Government service delivery.
People interact with Government daily, whether they are applying for vehicle and driving licences, complying with regulatory requirements and filling in Government forms, or paying taxes. "Government. direct" envisages a time when people will no longer have to queue up, fill out paper forms and send off cheques for Government licences; instead, they will be able to link directly into government through their television sets or from kiosks in post offices, libraries and shopping centres.
Services will be more accessible, more convenient, easier to use, quicker in response and less costly to the taxpayer. As the Cabinet Minister responsible for public service, I find the prospect of delivering services electronically direct to the public enormously exciting.
This initiative forms part of the programme of public service reform, which has already established the citizens charter, next steps agencies and the deregulation initiative as a means of raising the quality of services and making them customer-driven.
Reaction to the Green Paper has been substantial and positive, with nearly 300 responses. I am pleased to say that they show broad support for our intentions, particularly our determination that the initiative should be truly cross-governmental and customer-centred.
However, concerns have also been raised. Some suspect that our aim is not to raise the quality of service but simply to cut costs, or to create a huge central database on individual citizens. Such fears are groundless. There are also concerns about data protection and about potential marginalisation of the disadvantaged and the disabled. I assure the House that we are determined to find solutions on data protection, and we are equally determined that electronic services will benefit everybody.
Last year, the Government launched "IT for all" in order to raise public awareness of, and provide wider public access to, information and communications technologies. I am particularly pleased that my right hon. Friend the Deputy Prime Minister has announced plans to redirect the millennium fund towards information and communication technology projects. After 2001, this could enable institutions such as citizens advice bureaux and public libraries to provide help to access electronic services for those who lack the confidence or opportunity to use a public access terminal.
In taking our plans forward, we have three objectives. First, we will build on the Green Paper by continuing the dialogue with those who have made substantial
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comments, such as the National Consumer Council, the Consumers Association and Justice. We will explore with universities how we can best draw on their creative thinking, too. We will work closely with the Data Protection Registrar to produce data protection arrangements that command public confidence.
Secondly, we will give the general public an opportunity to try electronic service delivery for themselves through pilot schemes. Some have been launched already. Others that I expect to see launched in the next few weeks will: first, enable the citizen to use one electronic form to tell several Departments about a change of employment status; secondly, bring citizens charter information to electronic terminals in the high street; thirdly, bring electronic services to the rural post office; and fourthly, allow Internet access to large Government geographical and geological databases. More will follow. The views of the public on pilot schemes will be sought and recorded through market research, and the results will be published to inform the debate.
Our third objective is to begin to plan the full-scale implementation of "government. direct", drawing on what we learn from our discussions and the pilots. As soon as we are able, we shall lay a White Paper before Parliament, setting out our plan for implementation, including any legislation that may be needed. We expect to rely on the private sector to lead in the development of technology and to provide the capital investment necessary to be repaid by savings in central Government service delivery costs.
As the Minister reponsible for public service, I shall work with colleagues across government to take this initiative forward, with the support of the central IT unit, which was set up just over a year ago in the Cabinet Office, with people drawn from the public and private sectors. I would particularly like to thank ministerial colleagues who are participating in the programme of pilots, and private sector sponsors such as BT, Electronic Data Services, ICL, Intergraph and Microsoft, who have shown commitment and imagination in their support for the programme.
This information technology initiative will help, for example, the pensioner at the rural post office to check his or her income tax, and the parent in the urban high street to compare the performance of local schools. It will lighten the burden of government on the small business man, and it will help those seeking work to sift job vacancies. It will make dealing with Government as easy as the supermarket laser checkout or the bank cash machine. It is government made easy, and made easy for everyone. If the take-up of electronic services follows the pattern of that for cash machines, five years from now, 25 per cent. of simple Government transactions with the public could be electronic.
Our plans for the use of information technology to provide services in a fundamentally different way will have radical and welcome implications over the long term for the size and shape of central Government. I commend our plans to the House.
Mr. Derek Foster: I thank the right hon. Gentleman for his statement. I welcome his initiatives, and thank him for the courteous way in which he deals with all such matters. However, the earlier Green Paper and today's statement bear all the marks of a last-gasp technology gimmick from the party of the past.

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Why was Al Gore able to present the four-year record of achievement in September 1996 while the Government were still pussy-footing about with a discussion document? Have the Government not betrayed citizens already, by failing to harness user-friendly technology to make government more accessible?
Have not the Government already sold business short by failing to exploit information technology in scything through red tape? How will the right hon. Gentleman avoid a new, dangerous split between the information haves and the information have-nots? Is he not aware of the danger of citizens' personal data falling foul of Big Brother Government or private sector cowboys bent on a quick buck? Why does he not beef up the Data Protection Agency to counter that threat?
Why have the Government headed for the hills over the £22 billion millennium bug issue? Why has the right hon. Gentleman ignored repeated warnings that it could be the next BSE-style crisis to hit government? Have not his Government been ducking and diving on the real issues, leaving the next Government to clean up the mess?
Why do not the Government come clean with their staff by publishing their own estimate of job losses, for example? What is the right hon. Gentleman doing to involve staff as partners in the management of such a profound change? Where are his staff training and development proposals? How much Government cash has been earmarked for the investment? Have the Government instead, as we all expect, thrown themselves entirely at the mercy of the private sector? Does not the statement demonstrate a failure of imagination and leadership from a failed Government, breathing their last after the humiliation of Wirral, South?
Mr. Freeman: I am grateful to the right hon. Gentleman for his kind remarks—at least at the outset of his series of questions. I shall deal briefly with five of them.
First, we are spending at the rate of £2 billion a year in central Government on information technology: a very substantial part of total Government running costs. The Government have not been afraid, either Department by Department or centrally, to use modern information technology. Our response represents a radical step forward in the use of IT to the benefit of our citizens.
As to the difference between the information haves and have-nots, the right hon. Gentleman is right. It is very important that manual systems are continued in parallel with the use of modern information technology, so that those who are not familiar with or do not have an opportunity to use modern IT can use the existing paper-driven system for as long as that is necessary. I have already said that I hope that the citizens advice bureaux will play a full part in this radical revolution of the way in which Government services are provided, by facilitating services for citizens who cannot or do not wish to use them directly.
On third-party access to data, it is very important that the Data Protection Agency and the registrar herself are satisfied about protection against illegal and improper third-party use. There is no difference between the two Front Benches on that.
I turn to the millennium bug: the prospect that some computer systems will fail in 2000, because 20 or 30 years ago, when the software systems were written, planners
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never assumed that the hardware would last that long. My hon. Friend the Minister for Science and Technology has laboured long and hard to ensure that the private sector is aware of its responsibilities, and we have jointly ensured that all Departments must by the end of this year have drawn up plans, and by the end of next year implemented plans, to protect the public against any faults.
My right hon. Friend the Deputy Prime Minister and I published a White Paper last year on civil service training and development, which made explicit reference to the need for developing computer skills. I congratulate the civil service on embracing those new developments with great alacrity.
Sir Trevor Skeet: If I understand my right hon. Friend the Minister correctly, his statement is about using technology to make more information available on Government services on a 24-hour basis. Will it be a precursor of new developments? Will he be a little more specific on cost? He indicated the amount of capital expenditure going into IT at the moment. Although the proposal concerns only a very tiny part of overall expenditure, what will be its expenditure effect on the Government?
Mr. Freeman: One of the principal benefits of modern information technology is that information can be supplied to the citizen 24 hours a day, seven days a week; not just when the office is open. That principle of not only accessible but open government is extremely important.
No one knows what the cost will be, because we must test, pilot by pilot, whether the citizen wants this information service to be delivered electronically. It is important that Government do not dictate. The citizen knows best what is needed, and the private sector will lead with the development of technology. I confirm that we expect the private sector to make the initial capital investment. All our conversations with the private sector lead us to believe that that will certainly be the case.
Mr. Robert Maclennan: Does the Chancellor of the Duchy accept that, although this interim statement on the transmission of Government-held information is important, so far as open government is concerned, it would carry greater conviction if it were accompanied by a freedom of information Act based on the presumption that Government-held information should be made available to the public, except for certain narrowly specified and policed categories?
Does the right hon. Gentleman accept the recommendation of Justice, that the supervisory and enforcement powers of the Data Protection Registrar should be strengthened? Is it his intention that terminals should be available in rural areas, particularly sparsely populated areas, where it is difficult for people to get to Government offices or other centres to obtain the information to which they are entitled?
Mr. Freeman: Our code of open government, which applies to civil servants and Ministers alike, presumes that information, analysis and explanation of decisions should be made available. I believe that the use of modern information technology will make government more open,

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not less: information will not be confined to the filing cabinet. A freedom of information Act would make no practical difference to the range of information that should be open to citizens.
The code encourages civil servants and Ministers to work on the presumption that information should be available except in narrowly drawn circumstances. Most countries follow that practice, and I believe that it would have broad support in the House. The exceptions involve secret intelligence and diplomatic relations with other countries. The presumption is openness of government, and our reforms will enable that principle to be more widely applied.
As for the comments of Justice on the status of the registrar and the law, we shall have to consult on that, and that process has only just begun. I am sensitive to the point made by the hon. Member.
Yes, terminals should be available throughout rural areas. Modern technology knows no geographical or time boundaries. We are carrying out a trial in a rural post office in Devon to find out how citizens react to the availability of a computer terminal to supply information that would otherwise be available only by expensive telephone or by paper.
Mr. Gary Waller: I congratulate my right hon. Friend on his excellent statement. Will he, in turn, join me in congratulating the Editor of the Official Report, Mr. Ian Church, on the award he received from the Campaign for Freedom of Information for the parliamentary web site on the world wide web, which had encouragement from and the enthusiasm of the Information Committee? How long will it be before motorists are able to renew their vehicle excise licence and pay the duty by using a kiosk in their local library or from a PC in their own homes?
Mr. Freeman: I pay tribute to my hon. Friend and his Committee's determination to introduce modern technology into the workings of Parliament. A great deal can be done, and I welcome the arrival of Hansard on the Internet. My hon. Friend raises an interesting prospect with regard to car tax. Our vision is that, instead of queueing at a main post office or corresponding by mail to renew our car tax, it should be possible to do so entirely electronically.
With the approval of Parliament, central databases could confirm that a car has passed the MOT test and that a valid certificate of insurance has been issued. An electronic signature—a credit card-sized mechanism—could validate that a person is who he says he is, and a car tax disc could be issued immediately.
Dr. Jeremy Bray: Is the right hon. Gentleman aware that many demarcations and restrictive practices that grew up in the former age of information collection are simply irrelevant and crippling in the modern information technology age? The common register of businesses, for example, is not available, because, although the component parts—company registered offices, and so on—must be published, the data are compiled with the use of Inland Revenue and Customs and Excise powers. That means that the product cannot
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be available. Do the Government propose an overhaul of the legislation relating to the main streams of Government information to make that information publicly available?
Mr. Freeman: I believe that we should rethink the divisions between Departments, laterally and radically. I feel, for instance, that the distinction between the Customs and Excise, Contributions Agency and the Inland Revenue in the collection of moneys due from the citizen to the state can be drawn more simply, transparently and openly. But the permission of Parliament, given through statute law reform, will be needed for the comparison of data held by different agencies—and, indeed, for the transmission of data between Departments.
As I have said, a radical rethink is needed if we are no longer to rely entirely on the circulation of paper between Departments. We can transfer data between Departments for the convenience of the citizen, but only with the permission of Parliament.
Sir Patrick Cormack: I envy my right hon. Friend his sense of excitement, but will he consider for a moment the most important aspect of contact between the citizen—the subject—and Government: personal contact between one person and another? The depersonalisation that is implicit in much of what my right hon. Friend has said this afternoon will not be welcomed by everyone. Does he recognise that a real danger is implicit in the codifying of every sort of communication, and in the eventual replacement by a hole in the wall of the Government counter with someone behind it?
Mr. Freeman: My hon. Friend's vision fills me with horror, but there is no inconsistency in using modern information technology to replace the post office, the fax machine or, perhaps, even the telephone. I want to speed the flow of information, but I do not want information to be depersonalised.
One of the biggest criticisms that can be made by the citizen and, indeed, Members of Parliament of reforms made since the war is that such depersonalisation has taken place. Sometimes we need a face—a person to talk to. I do not mean a face on a video conference screen; I mean people talking face to face. I believe, however, that these reforms should permit a sufficient reduction in other clerical and running costs, to facilitate an increase in personal contact rather than the reverse.
Mrs. Gwyneth Dunwoody: Is the right hon. Gentleman aware that, without a strong commitment from the Government in terms of money, his statement is so much rubbish? There is no indication that enough money is available for training, and there is certainly not enough for the provision of hardware.
When the right hon. Gentleman talks about the Department of Transport being able to issue any kind of document, he will be aware that not enough money has even been written into the Department's budget in this and coming years to provide for the information technology that is necessary to run it. Will he examine the American experience, which shows that change of this kind is important to young white males, and will he come back and tell us how he intends to change that with real cash?
Mr. Freeman: We are spending real cash. We are spending £2 billion a year on IT projects in central

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Government, and I do not propose a significant increase. I am telling the House that, just as the Government use the Royal Mail to transmit paper between them and the citizen, so we can use information technology. The fact that, rather than the Royal Mail supplying paper, the private sector is supplying hardware and software, has no financial impact on the Government. Someone else is providing the investment and the service and Government pay for that, but they pay on the basis of usage rather than capital investment.
Sir Michael Marshall: Does my right hon. Friend accept that his willingness to have an open session with the Parliamentary Information Technology Committee, involving people from industry as well as Members of both Houses, was much appreciated? One of the issues raised was crime. As many of the challenges posed by crime in the 21st century will be information technology-related, does he accept that, as well as receiving information, there is a unique and special opportunity for the public to give information through kiosks and eventually by way of television, and that that would help in the fight against crime?
Mr. Freeman: I am grateful to my hon. Friend, and I pay tribute to what the all-party Parliamentary Information Technology Committee has so far achieved. I look forward to working with PITCOM. My hon. Friend spoke about crime. It is not just the exchange of information that has to be regulated and regularised, where necessary by Parliament, but the efficiency with which different arms of the law work.
One thinks in particular of the probation service, the Crown Prosecution Service, the courts and the police. We have different computer systems, and they should be compatible. One of the main aims of the central direction of investment, or at least advice on how Departments should spend money, is to make sure that different computer systems are compatible, so that information can be exchanged electronically.
Mr. Dennis Skinner: Does the Minister agree that, while this will give the Government great power to carry on their Big Brother technique and to find out about the man in the street, the man in the street will not be able to find out where the Tory party gets its money?
Mr. Freeman: I have already explained that the initiative is not about creating greater powers for the state in relation to individual citizens. There is no question of a Big Brother, whether socialist or Tory. The ordinary citizen would not tolerate that, and nor would Parliament. Therefore, any plans for the dispatch of data between Government Departments or even involving third parties, which is not contemplated in our plans, that will assist the citizen, have the citizen's approval and are protected by law, should surely be welcomed.
Mr. Patrick Thompson: I congratulate my right hon. Friend on the progress that he has announced for the electronic delivery of Government services, and I welcome his comments about personal contact. Will he confirm that the CCTA, which is based in my constituency, has been involved with the

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"government. direct" initiative, and will be involved in future in terms of the announcement and electronic delivery?
Mr. Freeman: I am happy to confirm that, and I pay tribute to the work of the CCTA, which started life as the Central Computer and Telecommunications Agency about 25 years ago. I also pay tribute to my hon. Friend for his work in support of the CCTA. It is a valuable resource of experience and advice for all central Government Departments, and I hope that its work expands.
Mrs. Anne Campbell: Is the Minister aware that many of the initiatives that he would like to promote are already happening and well advanced? Is he also aware of the Cambridgeshire Childcare Links project, which was launched by my hon. Friend the Member for Peckham (Ms Harman) at Hinchingbrooke school in the Prime Minister's constituency a few weeks ago? That service aims to provide for parents who wish to return to work information on child care, jobs and training and social security benefits.
Will the Minister ask his right hon. Friend the Secretary of State for Social Security whether he is prepared to co-operate with Cambridgeshire Childcare Links to provide helpful benefits information that will allow parents interactive access as to their entitlement to benefit?
Mr. Freeman: I shall certainly pass that to my right hon. Friend the Secretary of State for Education and Employment. I am well aware of the hon. Lady's support for local services in Cambridge. Not long ago, I had the pleasure of launching one such service in Kettering.
Mr. Mark Robinson: I welcome my right hon. Friend's assurance that personal contact will not be replaced by some sort of virtual reality system. Will he assure the House that there will be efforts throughout the civil service to ensure that the process to simplify guidance and instruction about how to apply for benefits will be continued, to ensure that it is compatible with this new information technology era?
Mr. Freeman: I am grateful to my hon. Friend. I emphasise again the importance of personal, caring and, in some cases—when it is to do with, for example, the Child Support Agency or the national health service—compassionate and understanding assistance, which is by no means incompatible with being a civil servant. That is what the House would expect—that personalised, proper service—and it must be against a background of regulations that are simple and written in the Queen's English.
Mr. Jim Cousins: Does the Minister accept that the history of the Government's involvement so far with large-scale information technology contracts is one of poorly defined contracts, large-scale expenditure, cost overruns and poor performance? Will he therefore assure the House that, if he proceeds down that road, it will be on the basis of carefully costed and piloted projects, which produce genuine improvements of service to ordinary people?

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Will he also assure the House that his proposals are not a device for undermining the Royal Mail and the network of the nation's 20,000 post offices?
Mr. Freeman: It is certainly not our intention to undermine the Royal Mail, but I am glad to see it progress with the development of its own services; it should be congratulated on that. However, there are other ways in which Government Departments can communicate directly and in which the citizen can communicate with Government and vice versa. In the same way that Government embrace the quill pen and the letter, so we should embrace information technology.
I can confirm what the hon. Gentleman says about the importance of relying on properly costed pilots. For the past 50 years, all Governments, of whichever shade, have sometimes had projects that have overrun and been badly thought out. Others have been a great success—I am talking about information technology now. We must learn from that experience. That is why I propose a programme that is cautious. It tests what the citizen wants and what is feasible, pilot by pilot; and substantial money, committed either by the private or by the public sector, should not be given until that has happened.
Mr. Robert G. Hughes: Does my right hon. Friend agree that he is to be particularly congratulated on harnessing the unique expertise of the Government communication agency with that of the big players in IT, and that that will deliver quality services in a way that will be beyond the imagination of many people—and, if I may say so, in a way that seems beyond the imagination of the Opposition spokesman, the right hon. Member for Bishop Auckland (Mr. Foster)? Is this not another move that shows that the character armour of this Government is open government and good-quality services to customers, whereas the character armour of the Labour party is rotten public services and secrecy?
Mr. Freeman: My hon. Friend was a distinguished junior Minister serving in the Cabinet Office, and he will know that it is extremely important to think long term and to have a strategic vision about how to deliver services better to the citizen. It is incumbent on all of us as Ministers to ask: what does the citizen want, how should the service be delivered, and how can we harness modern technology? I am sure that you would agree, Madam Speaker, that Parliament and even Whitehall sometimes appear to be still in the 19th century in terms of their procedures, whereas the private sector has welcomed with open arms 21st-century technology. Government should do likewise.
Mr. D. N. Campbell-Savours: With the caveat of the Government's failure to move on the question of freedom of information, may I unreservedly welcome the statement, which is enlightened, points the way forward and, in many measures, reflects Labour policy, which goes down effectively the same route?
In that spirit of camaraderie, may I draw the Minister's attention to Cumbria county council's application to the Millennium Commission in relation to the Genesis project, after several years of work by me in my office here, on the university of the Lakes project, and the
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county council's own work? The Minister referred to the commission in passing when he said that it was considering IT bids more sensitively. Our application on the Genesis project is in exactly this area of IT transfer, and is being dealt with by the commission over the next few days. Will he put in a good word for us, because we want to win the bid and to show the whole country that we can make this system work in Cumbria?
Mr. Freeman: I will make sure that the millennium commissioners are aware of that. It is important that local government should be involved in this initiative, and I have made sure that the central IT unit has talked to local authority associations to find out how we can trial some projects in their field of responsibility, too.
Mr. John Whittingdale: I welcome my right hon. Friend's statement, but will he bear it in mind that it is only in the past 10 years that pupils have been educated in the use of information technology, and that there is widespread technophobia among those who did not learn about computers at school? Does he agree that adult education colleges will have an invaluable role to play in providing courses to help overcome that problem?
Mr. Freeman: There are some technophobes in Whitehall, as there are in Parliament; perhaps people over the age of 40, or perhaps even 30, might constitute the greater number. My hon. Friend the Minister for Science and Technology is doing exactly the right thing. He has launched "IT for all", which is aimed at familiarising those members of society—young and old—who find it difficult to comprehend how to use modern information technology. I greatly welcome his initiative, which I know will succeed.
Mr. Barry Jones: Notwithstanding the right hon. Gentleman's "vision thing", will he accept that many millions of our fellow countrymen and women will not be excited by his statement? Will he consider my elderly constituent, Mrs. Williams of Pentre, who, when she goes into the post office, will be intimidated by his vision? Is not the timing of his statement somewhat gimmicky, in view of the imminent general election?
Mr. Freeman: No, that is not a fair charge. I have tried to present a sensible and balanced conclusion of two years' work. Frankly, anyone looking back at reports of the proceedings of the House will, I am sure, find that the Government committed themselves to large-scale use of the Royal Mail and that a number of hon. Members, and perhaps their constituents, were afraid that they might lose the communications. We must embrace modern technology; the private sector does, as do many Governments around the world. Given his background, I hope—indeed, I know—that the hon. Gentleman will not be counted as a computer Luddite.
Mr. Ian Bruce: Was my right hon. Friend as disappointed as I was that those on the Labour Front Bench were so backward in welcoming the announcement, especially as the Leader of the Opposition got into such a mess when he announced a deal with BT? Is the right hon. Gentleman perhaps worried that BT will spend its money on this scheme rather than leave it for Labour's windfall?

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The piloting of schemes is clearly important, to see whether people will use high-street kiosks. I wonder whether my right hon. Friend has any announcement to make in that regard about the bid that I have made for my constituency to be one of the pilots.
Mr. Freeman: I am sure that we shall be involved in several dozen pilot schemes in the coming months and years. It is sensible to test precisely what the citizen wants and whether the technology works. I am sure that my hon. Friend will persist in his demands. His comments about Government and Opposition underline a central point: unlike the Opposition, who have the relative freedom to announce an idea, the Government have to examine it, consult on it, test it, think about it and then produce their response. They do not have the same luxury as the Opposition.
Mr. Andrew Miller: The Minister will be aware of my support for his view of the benefits that information technology can bring to cross-departmental activity. Against that background, will he explain, first, what steps he is taking to ensure that the allocation of contracts, especially in the context of privatisation, are not overly concentrated with one company or another? Secondly, will he say whether he agrees with the European Informatics Market, whose board includes a number of hon. Members from both sides of the House, that there ought to be primary legislation on data protection as a result of the European directive and of changes in technology? Finally, even with eight weeks to go until the general election, I would prefer to see the Minister at the Dispatch Box rather than a hologram.
Mr. Freeman: Clearly the Government must implement the European directive—we have about 12 months to do so—and we are urgently considering the form in which it should be implemented. There are a number of options, and several Departments are involved. The hon. Gentleman raises an important point about monopolies by individual IT suppliers. This must be watched, as we do not want several Departments to be reliant on a single supplier of hardware or software.
Mr. Simon Coombs: Does my right hon. Friend share my disappointment that the Millennium Commission was unable to approve the bid by the National Association of Citizens Advice Bureaux for a linked computerised system which would have greatly assisted the association in providing information similar to that which we are discussing? In that context, can he say whether it will be possible to place "government. direct" computer terminals in the association's bureaux?
Mr. Freeman: I share my hon. Friend's disappointment at the fact that the NACAB was not successful in its millennium bid. I very much hope that it will qualify for assistance from a redirection of the Millennium Commission's funding after 2001. We are trialling the provision of IT in one citizens advice bureau in Spennymoor in Yorkshire—[Interruption.] I do not know my geography. Modern IT would have corrected my statement that Spennymoor is in Yorkshire, and made it County Durham.
Mr. Michael Fabricant: Does my right hon. Friend agree that, just a few years hence,
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political historians will look back to this day and say, first, that it was a landmark day, and secondly, that the Labour party was a group of Luddites? Labour criticised my right hon. Friend's announcements and doubted his integrity in communicating with private companies. Does he agree that it is marvellous that, on this very day, the Cable Communications Association has announced that schools will be able to give access to the Internet to all their children for just £1 per child per day?
Mr. Freeman: The House will welcome not only what BT has done, but what the cable companies have done in terms of supplying modern IT to schools. The more primary and secondary schools that are connected, the better.
Mr. Edward Leigh: I welcome the statement, but a problem during the past five years has been that every hon. Member has been inundated by people whose lives have been wrecked by the inflexible computer technology and bureaucracy of the Child Support Agency. What worries me is that the very people who want to come into contact with government—an old-age pensioner at a local post office, a distraught ex-wife trying to get a CSA payment or a young labourer thrown out of work—are the very people who find it difficult to cope with these systems.
At the same time, government is being fanned out increasingly to agencies, there is a lack of parliamentary control, and all agencies are now required to have strict performance guidelines. I fear that, whatever my right hon. Friend has said, we will have fewer humans facing the public and more computers providing more inflexibility and bureaucracy, with the result that more people will be denied their basic human rights.
Mr. Freeman: I am sure that my hon. Friend is wrong. He referred to the Child Support Agency, which I am afraid has, in its past practice, relied on several different sources of information. Computers have not been talking to computers—in other words, those affected by the legislation have received conflicting information at different times, without having someone to talk to personally. In a number of cases—particularly where the work of the agency has been removed to remote parts of the United Kingdom—ordinary citizens have been unable to talk to someone about their problems. We can and should embrace modern information technology without depersonalising it. Frankly, we can reduce, not increase, bureaucracy if we do it sensibly.
Mr. Fabricant rose—
Madam Speaker: I will allow the hon. Member for Mid-Staffordshire (Mr. Fabricant) to make a point of order to correct what he has said.
Mr. Fabricant: I am grateful, Madam Speaker—you have anticipated my point of order. It was a slip of the tongue; the charge would be £1 per pupil per year.

Packaging Waste
4.14 pm
The Minister for Construction, Planning and Energy Efficiency (Mr. Robert B. Jones): I beg to move,
That the draft Producer Responsibility Obligations (Packaging Waste) Regulations 1997, which were laid before this House on 29th January, be approved.
I must first apologise that the Secretary of State is not present, but, as I am sure hon. Members are aware, the Environment Council is meeting in Brussels today and tomorrow. However, his absence gives me the opportunity to speak on the subject. As I chaired the Environment Committee's inquiry into recycling, it is a real pleasure to be associated with an issue that has been a matter not only of controversy but of considerable fascination for entire industries and for many pressure groups.
I should start by putting the regulations in context. We need to obtain better value from our waste, in the interests of the environment, of United Kingdom competitiveness and of the consumer. That is the central objective of the Government's waste strategy. Our strategy, however, is particularly relevant to packaging waste.
Each year, we create 8 million tonnes of packaging waste, and—although it is the largest recyclable element in each of our dustbins—about 2 to 3 million tonnes of it goes to landfill. That practice is simply not sustainable. We cannot continue to divert ever more of our countryside to providing more landfill capacity. Landfill generates methane, which is a major contributor to global warming. Moreover, I think that all hon. Members know that the process of finding and planning new landfill sites is extremely difficult. I am particularly aware of that difficulty, because it is covered by one of my ministerial responsibilities.
Above all, it is important to harness the long-term economic benefits available from treating waste as a secondary raw material rather than simply as a costly liability. Therefore, the system that we are proposing has two principal objectives. The first is to implement the Government's challenge on producer responsibility for packaging waste. The second objective is to enable the United Kingdom to implement recycling and recovery targets in the European Community directive on packaging and packaging waste.
The producer responsibility challenge is about using the market to deliver an environmental objective, and requires that the price that the consumer pays should reflect a contribution to the costs of dealing with a product as waste. Producers have obligations to recycle and recover waste in proportion to the number of goods that they place on the market. In packaging, that obligation would create an incentive, first, to minimise the amount of packaging needed for the purpose; secondly, to ensure that one reuses packaging whenever possible; and, thirdly, to find more efficient and cost-effective methods of recycling and recovery—for example, by finding new markets for recyclate.
Broadly, by 2001, we are aiming to double the amount of packaging waste—paper, glass, plastic, steel and aluminium—that we recycle or recover. We are currently achieving about 30 per cent. recovery of packaging, and we need to increase that to 50 per cent.—the minimum
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target set by the EC directive. As the United Kingdom has relatively little waste-to-energy capacity, we expect most of the recovery to occur through materials recycling.
Our initiative will bring real benefits to local communities, local authorities, voluntary bodies and everyone concerned with recycling. By 2000, we aim to have convenient and close-to-home recycling facilities for eight out of 10 households—in some cases through new kerbside schemes, and elsewhere through a big expansion in bank systems. The principal means of achieving that goal will be through collective business schemes, of which the prototype—Valpak—is well advanced. Valpak reflects a substantial commitment by more than 100 leading businesses which have subscribed to its start-up costs.
Mr. Barry Sheerman: Is not there a concern in the industry—which the Minister must have heard expressed very loudly in the past couple of months—that Valpak is okay, but that it is not yet up and running properly? It seems that some of the key players, especially those in the retail sector, are already leaving the Valpak framework, thereby threatening it. Unless those retailers can be persuaded to come back into the scheme and to support it strongly, it will not be possible to secure the objectives desired by the Minister, by myself and by everyone who is interested in the subject.
Mr. Jones: I understand what the hon. Gentleman is saying; it is important to keep the retailers on board. There is every incentive for them to stay on board, because they could not deliver their part of the recycling targets on their own. They have to work co-operatively with someone. In view of the administrative overheads and the need to have the system up and running, it makes much more sense for them to stay in the Valpak framework, or whatever alternatives come forward, rather than to try to go it alone.
Mr. D. N. Campbell-Savours: I have no doubt that the Minister has received correspondence from the Paper Federation. One thousand jobs in my constituency are wrapped up in the industry. The federation says that although it supports the scheme and wants it to work, it is worried that if things go wrong, there will not be an adequate review procedure. The federation says that it cannot necessarily wait two years if employment in the industry generally is being threatened. Can the Minister say something today that is helpful to the industry and which reassures it that the Government, of whatever persuasion—obviously my own people have views on these matters as well—will keep an eye on the industry and on employment within it, to ensure that the scheme is working properly and is not damaging areas of it?
Mr. Jones: This is pioneering legislation, as no doubt the hon. Gentleman and the industry recognise. It is extremely important, therefore, that we keep the matter under close review and if necessary, make alterations. That is why the review process, about which I shall say something later, is part of the overall package. The hon. Gentleman talks about a period of' two years. He should remember that we are talking about 1998 and that we are already almost three months into 1997. Bearing it in mind that 1997 is the year for the collection of statistics and

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notification, the review of the operation will occur early on. That is a reflection of the fact that we know that we are breaking new ground.
Mr. Michael Meacher: Will the Minister, on the central point of this debate, address himself to the key issue? Contrary to the agreement that seemed to have been reached on 15 December 1995, the regulations will permit retailers to use transit packaging arising in their own back yard, to meet their obligations. That will increase the pressure on other packaging industries upstream and will undermine the viability of Valpak. How does the Minister justify that?
Mr. Jones: The hon. Gentleman must have missed what I said about retailers a moment ago. Retailers cannot fulfil their obligations simply from their own back yard packaging. They do not have packaging arising in all the categories that we are talking about, so they could not meet all the targets. The hon. Gentleman said that that was the key point of the debate, but I believe that there are a number of key points. If I can make a little progress, I shall highlight them. I believe that one of the main points of the debate is to ensure that we do not go down the road that some other countries have traveled—particularly the Germans—of creating a monster that is environmentally damaging as well as extremely costly.
I was talking about Valpak. Perhaps I should also tell the House that there is a second scheme, aimed at the dairy industry, called Difpak, whose members have recently announced their intention to proceed. Such schemes are run entirely by business. Any business that joins an approved collective scheme is entirely exempt from the regulations, as long as the scheme achieves the aggregate recycling and recovery obligations of its members. I hope that the House agrees that that is a substantial encouragement to join a business—run scheme.
The regulations impose three main obligations. First, there is a registration obligation: businesses must register with one of the environment agencies and must provide packaging data by 31 August 1997 at the latest. In other words, they must choose whether to carry out their obligations individually or to join a collective scheme. Secondly, from 1998 onwards, there is a recovery and recycling obligation. Businesses must take reasonable steps to recover and recycle specific tonnages of packaging waste, which are calculated to take account of the amount of packaging flowing through, the function that they perform in relation to the packaging—that means, for example, whether they convert packaging or fill packaging—and the UK targets, which are 52 per cent. recovery and 16 per cent. recycling for each material by 2001.
Sir Jim Lester: Some small companies are concerned about whether they might be discriminated against if they do not join one of the major schemes. Will my hon. Friend confirm that there will be no difference of approach in regard to individual companies that seek to register on their own and those that choose to do it together?
Mr. Jones: That is true—the smallest companies are exempt from the regulations, although the slightly larger ones will be caught as the phasing comes in. I can confirm that if people want to go it alone and create their own
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scheme to recover their packaging, they will be free to do so, provided that they do it effectively. If the business is in a scheme, the scheme carries out the tasks.
Thirdly, there is a certifying obligation. Businesses and schemes must certify annually that they have recovered and recycled the required tonnages of packaging waste.
The Environment Agency, in England and Wales, and the Scottish Environment Protection Agency will monitor compliance with the regulations and will have enforcement powers comparable with those that they exercise in relation to their other responsibilities. Businesses following the individual route will need to pay a registration fee to the appropriate agency of £750, while schemes will pay a fee in relation to their membership.
The primary purpose of the regulatory regime is to discourage free riders. Industry told us clearly that that was a basic requirement if the initiative was to succeed. It is therefore important that the enforcement role of the agencies is credible and effective. Much of the agencies' effort will be devoted to education, promotion and assisting industry, but enforcement will be necessary. A public register of businesses and schemes will list all those who have registered and who have self-certified performance of their obligation.
The agencies will also have an important role in relation to data—aggregating information from businesses, to provide a more accurate national picture of how and where the 8 million tonnes of packaging is created. That role also responds to an important industry request for much better data, which are essential to ensure a fair distribution of obligation, as well as to ensure that the United Kingdom is on course to achieve its targets.
I now refer to small businesses. While we have accepted the industry's request for a shared approach, many people have also accepted that it is neither efficient nor profitable to place an obligation on every business, such as the 200,000 or so small shops. The regulations therefore apply initially only to businesses with a turnover of more than £5 million. We estimate that 4,000 businesses with a key role in the packaging chain will be affected. In the year 2000, the threshold will drop to a turnover of £1 million, and we estimate that 9,000 businesses will be affected, including wholesalers who, from that year, will pick up the selling obligation of the small shopkeeper. We believe that large and medium-sized businesses are best placed to ensure that the system is up and running as smoothly as possible.
One of the key features of our approach is that it is based on recycling and reprocessing, not simply collection. If we briefly consider what has happened in Germany, the advantages of our approach become clear. The German householder has five separate dustbins; each German household is served not only by the municipal collection lorry, but by a separate lorry run by the Duales System Deutschland—DSD. The two are not co-ordinated, and there are extremely high targets for recycling and recovery.
The consequences are well known: in its early years, the German system was collecting vast quantities of waste, for which it has struggled to find a use. Today, there is still a significant trade in exporting plastic waste, often with a dowry, to third-world countries, where reprocessing is a euphemism for environmental degradation. The current cost of the German approach is £1.7 billion per annum—an approach that we have wholeheartedly rejected.

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When the Select Committee, under my chairmanship, published its report on recycling in 1994, we drew particular attention to the issue. I hope that the House will forgive me if I quote from the press notice that launched our report:
"On the subject of recycling targets, we recommend that the aim of local authorities and other bodies should not just be the collection of recycled material. Collection should be viewed as the first stage of the recycling process; it is equally important to develop market demand and adequate processing capacity. We believe that this should be taken into account by the Department of the Environment and the European Union in the formulation of policy, in order to avoid the surplus of collected material as resulted from the German DSD scheme."
By contrast, we have taken great pains to build our approach on the views of business, and we have harnessed the expertise of those with practical knowledge of the industries involved. That is the basis for the regulations. By allowing for business choice, they provide the stimulus of competition. By providing for business self-assessment and self-certification, they offer a deregulatory approach to monitoring and compliance. By providing for exemption for an approved business compliance scheme, they encourage business to develop cross-sectoral co-operation, efficiency and incentives. By focusing on the reprocessing end of the cycle, they ensure that we do not collect material that cannot be used and that the full range of businesses involved have an incentive to find new markets for recyclate.
Mr. Sheerman: I and most people who know anything about the subject would agree with the Minister about not wanting to go down the German track, because we do not want that sort of bureaucracy, but at least in all the other systems that I have seen, there is a regulator who conducts audits and checks that the recycling is being done. Is the Minister sure that the Environment Agency has the capacity and the ability to check, audit and control?
Mr. Jones: I have every confidence in the Environment Agency, which does a good job in respect of all its responsibilities. I have never heard anybody suggest that the agency is incompetent in this respect. I am interested in the hon. Gentleman's comment about not wanting to go down the German route—that contrasts with the remarks of the hon. Member for Oldham, West (Mr. Meacher) who, when speaking to the Environmental Services Association not long ago, praised the way in which the Germans operate.
Mr. Meacher: That is a complete falsehood—I have never said that this country should adopt the German method. It is far more expensive per capita, I have never supported it and the hon. Gentleman should withdraw—
Mr. Deputy Speaker (Mr. Michael Morris): Order. Before appealing to the Minister, the hon. Gentleman should rephrase the word "falsehood".
Mr. Meacher: I am glad to do so. The Minister would not wish to impute to me something that I certainly did not say.
Mr. Jones: We always welcome conversions on the road to Damascus.
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For all those reasons, we believe that the costs of the UK approach will be substantially below those of any of our major competitors. We estimate that by 2001, if collective business schemes are successful, annual costs will be at the low end of the range set out in the cost compliance assessment—that is, around £270 million. Furthermore, we believe that those costs should be viewed essentially as transitional costs, necessary to provide improved recycling infrastructure which, as it becomes available, will be readily deployed by industry. Rising landfill costs and greater use of secondary raw materials, with their long-term advantages to the UK economy, mean that, in the long run, costs will fall. A sustainable approach to packaging waste is, in competitiveness terms, a real plus.
Even putting to one side the UK's policy in that respect, I remind hon. Members that doing nothing is not an option. This is an issue of grave concern to UK packaging manufacturers and exporters seeking to trade with member states that have adopted barriers to trade under the guise of environmental protection. It was for that reason that many in the industry pressed us to negotiate a directive that provided a clear single market framework for the free circulation of packaging, while ensuring that each member state met certain minimum recycling and recovery objectives.
We are now using the directive to safeguard UK interests. We and others have formally challenged the Danish can ban, which restricts the sale of beverages to refillable containers—for a local brewery based in Copenhagen, that requirement is easy to meet, but it is a substantial barrier to any UK exporter. We are urgently considering the latest German proposals on refillable containers, which raise similar issues. The notification procedure that the directive requires gives us a real opportunity to challenge such barriers to trade, and it is encouraging that several member states have already withdrawn or modified their proposals as a result of that procedure, or in anticipation of it. However, for the directive to work effectively, we must be confident that we in the UK can achieve the recycling and recovery targets that it sets.
The regulations now before the House are, as I said, based on a number of principles established in negotiation with industry, starting with the producer responsibility group and continuing with other bodies. There are few trade associations with a substantial interest in packaging that have not played a part in putting together that approach. Even more important, many business leaders have given up substantial management time to develop proposals that will make this a success.
Businesses as diverse as Procter and Gamble, Courtaulds, David S. Smith, Tesco, British Glass, British Polythene Industries, Marks and Spencer, Guinness, Coca-Cola and Carnaud Metal Box have given substantial management time and effort. The business leaders who are members of the advisory committee are continuing to help devise solutions to the difficult issues that we have encountered.
Inevitably with such a process, rapid progress was made early on in agreeing the broad approach, but there has been difficulty in the detail and in finding a solution to issues where sectoral interests differ. In that context, I pay special tribute to Sir Peter Parker who, as president of the Industry Council for Packaging and the Environment, chaired a

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critical meeting on 15 December 1995, which agreed a formula for the shared obligation and the principles on which the current regulations are based.
However, in a process that involves so many sectors of business, it would be wrong not to acknowledge that there are issues of importance to specific sectors, which remain outstanding concerns. As with any new system, there are fears of the future. Will there be adequate recycling capacity? Will some businesses have to pay much more than others to obtain waste for recycling? Will the ones that hold waste co-operate, or do we need a separate waste holder obligation?
Mr. Archy Kirkwood: I entirely agree that it is an important process and that we are still in the early stages, dealing with global and strategic issues, but I have a direct constituency interest—250 jobs hanging, if I may put it that way, on coat-hangers and the production thereof. Can the Minister say yet whether, as in other European countries, fabricated plastic coat-hangers will be exempt from that process, at least at this stage?
Mr. Jones: The regulations do not lay down that degree of detail. They are broad definitions, and it will be for industry, working with the Environment Agency, to ensure that what happens in practice reflects the spirit of the measures that we are placing before the House. I can give the hon. Gentleman what I regard as a commonsense view on that, but I would not necessarily regard it as a definitive view, because plastic coat-hangers can exist for any of several different purposes. They might be sold and therefore be ordinary products, or they might be given away free with dry cleaning or be included with the suit or shirt that one buys in a shop, in which case they are packaging, as cardboard stiffening, pins and so on would be.
As I said, it will be important to answer several questions. One of those is: will all the parties play an equitable part in accessing waste from the domestic waste stream? Another might be: do the activity percentages in the regulations fairly reflect what each part of the packaging chain actually does?
Many of those concerns can be answered only when there are better data and when the system has begun to function. I assure the House that we shall keep a careful watch on the way in which the regulations work in practice and will keep them under careful review, to ensure that nonsenses do not occur. The staged build-up to the directive targets should ensure that no one's burden is unreasonable in the early years. I know that there are some fears, but I hope to reassure hon. Members that some of them are unreasonable.
Mr. William O'Brien: I join the Minister in paying tribute to Sir Peter Parker for the work that he has done in bringing us to this stage.
Does the Minister envisage a conflict with the advisory council or within the industry? He mentioned shared responsibility, but he also mentioned the market. It is difficult to see how we can have shared responsibility in a market scenario. Is the Minister aware of any anomalies or problems in such a situation?
Mr. Jones: I believe that, in the various parts of the chain, the shares have been sorted out very much along
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market lines. If, subsequently, it turns out that those shares are different, or if technology brings a different perspective to our debates on the matter, that too may change. I have learnt in politics the essential truth of the philosopher's question, that only one statement is true at all times and in all places
"And this too shall change."
Nothing is set in stone; nor should it be.
It is important to reassure those who have expressed some of the more unreasonable fears. One of them relates to the relative size of the retailer obligation, and to whether retailers will be able to meet their obligations from their own waste. Let us consider a large household name retailer. The obligation laid down by the regulations for such a business is likely to be for between 100,000 and 200,000 tonnes—in other words, between 3 and 5 per cent. of the entire United Kingdom recycling and recovery obligation will have to be met by that one business. It will have access to waste in its own back yard, but that source is unlikely to supply much more than half its needs. It will have very little of some of the materials that it needs, such as glass, aluminium and steel. In short, the largest players in the retail and pack filler sectors have large obligations, and will have no alternative but to co-operate with others, either in a scheme or in some other way, to satisfy the obligation.
As I said, ensuring that the regulations generate a successful UK initiative on packaging waste will be a process of dialogue for the Government, the agencies and business. There will inevitably be issues that need to be reassessed in the light of experience. That is why the Government have given a clear commitment to supporting the work of the advisory committee in carrying out a thorough review of the system once it is in operation, and to considering any recommendations that it makes. The work load of the committee for the review is already being mapped out. We are happy that it should look at issues of perceived inequity, such as the situation in the construction industry, and the proposal that all business users of packaging should be required to sort and separate waste.
For their part, the Government have pledged to keep under review the need for the regulations. As the amount of recycling increases, I have no doubt that we shall be able seriously to consider reducing their scope. Many businesses have written to me on this point, and I am certain that, whatever their concerns, given all that we have discussed and negotiated, the overwhelming majority of UK businesses want to adopt the regulations now. That message has also emerged from what has been said here today.
I also have no doubt that if success is to be achieved, it will come only by working with the market and with the businesses that are most closely involved. As the Secretary of State has said, the market is the only force powerful enough to deliver the objective of sustainable development. I therefore have no hesitation in asking the House to approve the regulations.
4.41 pm
Mr. Michael Meacher: I wish to make it clear immediately that the Opposition—soon, no doubt, to be the Government, if Wirral, South is anything to go by—strongly support the principle of increased

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recovery and recycling of packaging waste. However, the issue has been handled by the Secretary of State in a manner that can only be described as shambolic.
At the outset, the right hon. Gentleman failed to take control of the issue and tried to hive off all responsibility to the industry. Given the diversity of business interests involved, that led, not surprisingly, to protracted wrangling and uncertainty. Then the right hon. Gentleman tried to reconcile the differences at the notorious meeting of 15 December 1995. If the Minister thinks that agreement was reached then, I have to tell him that there is still a great deal of disagreement about what is supposed to have been agreed on that occasion. Even after that, the calculation and assignment of legal obligation remains extremely complex and an unnecessary burden on business. Contrary to what the Minister said just now, we cannot even be sure that the terms of the European directive can be met.
The regulations that are now finally being introduced are more than eight months late, beyond the European Union deadline, following repeated delays. The statutory guidance that is so essential to the technical implementation of the scheme has still not been produced. The whole handling of the regulations has been a masterpiece of muddle, mismanagement and market excesses.
The fundamental flaw, as many in the industry have said, is that the principle of shared responsibility, which the Government purport to endorse, is incompatible with the free operation of market forces, which the Minister ended his speech by praising and which the Government certainly encourage.
At the 15 December meeting, it was clearly accepted and laid down that the share of the legal obligation attributed to each sector would correspond roughly to the share of the overall cost of recovery and recycling that each sector would bear. That key principle breaks down if those who have substantial obligations for packaging supplied to domestic consumers—that is, the retailers—can discharge a large part of their obligation by recovering and recycling commercial and industrial waste supplied to them by UK packers and fillers for which they have no producer responsibility obligations.
It would be wrong to say—I am not saying it, contrary to the Minister's assertion—that retailers can evade all their obligations in this way. I readily accept that retailers have the largest obligation, at 47 per cent., but it is a reasonable estimate—confirmed to me by the industry—that retailers can discharge as much as two thirds of their obligation by this means. Thus, they will be able to limit their share in the cost of the obligation to recover and recycle used packaging from the household waste stream to about 15 per cent. of the total. It is difficult to see how that can be a fair allocation of "shared" responsibility. It is in clear defiance of the third principle of the 15 December agreement, which is:
"Each sector must play an equitable part in relation to the domestic waste stream".
Moreover, that produces a series of other distortions elsewhere in the packaging chain. It will put many companies, particularly small and medium ones, at a serious competitive disadvantage—to answer an earlier Conservative intervention. They produce or supply the
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transit packaging, but because they are prevented from gaining access to it, they will have to discharge their obligations by recovering other, more expensive, material. Figures shown to me suggest that the wholesaler could face a cost of compliance of up to two and a half times as much as his retailer with an equivalent turnover.
For the same reasons, the regulations will make it less likely that packaging chain members with large quantities of non-obligated transit packaging will join in a collective or shared approach. That will undermine the viability of Valpak. Some major retailers, Tesco for one, have already made it clear that they will not participate. That will burden multi-material collective schemes, which are supposed to be the Government's preferred approach, with more difficult-to-recover materials and thus increase the cost of achieving compliance for their members. That in turn will generate a large cross-material subsidy between paper and other materials; some have estimated that it could amount to as much as £45 million a year. That will seriously disadvantage the paper industry.
It is surely evident that what is wrong with the regulations is the fact that the Secretary of State wanted to have his cake and eat it. He wanted, for reasons of party dogma, to leave it all to industry to decide and to wash his hands of any direct involvement or display of leadership.
Mr. Robert B. Jones: We have made it abundantly clear that we want to work with industry to ensure that it evolves a scheme of which it feels it has ownership. We do not want to go down the German road. I know that the hon. Gentleman is about the only person left on the Labour Front Bench who openly believes in a command and control economy, but that is not how we want to proceed. That is why we have worked with industry to come up with a decent set of regulations, for which it has a sense of ownership. I know that the hon. Gentleman is an enthusiast for the German system, but it has been disastrous.
Mr. Meacher: The hon. Gentleman has such a taste for projecting his prejudices and insults that he simply does not listen to the facts. He should not say what I have already clearly refuted. I repeat that I have never supported the German scheme.
Mr. Jones: Will the hon. Gentleman give way?
Mr. Meacher: No, I shall not give way. I have never supported the German scheme. Germany's level of recovery and recycling is better than ours, but I have never supported the German green spot scheme. If the Minister suggests that I have, I shall give way to him.
Mr. Jones: I shall quote the hon. Gentleman verbatim from his speech to the Environmental Services Association. He said:
"We accept that a sensible regulatory regime, as in Germany or Japan, will be the best contribution to a thriving sector."
Mr. Meacher: That in no way suggests that we accept the German scheme. The scheme that the Secretary of State has introduced is to be repudiated because it leaves the problem entirely to industry to resolve, with companies quarrelling among themselves endlessly,

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failing to resolve the problems or to display any leadership. He should have introduced a sensible regulatory regime that listens to industry but in which the Government then make up their mind in the light of their consultation with industry. That is certainly how we would proceed.
When the shared responsibility approach was finally decided on—it is unique to the UK and has resulted in a complex and previously untried set of legal arrangements and obligations—the Secretary of State went along with it. When that approach was then distorted by the exercise of market powers by certain sections of the industry, he tamely assented to it. That is why this whole exercise is now in such a mess. It is all due to the right hon. Gentleman's abdication of responsibility and chronic lack of leadership.
In two months' time, the Government will be swept away. They may be swept away by a landslide, but they will certainly be swept away. In view of the mess created by the regulations, I want to make it clear that things cannot simply be left as they are or merely referred to the Advisory Committee on Packaging for consideration during the two-year review. That would not be sufficient. If we were to do that, we would entrench cherry-picking, undermine Valpak and other multi-sector schemes, and weaken the shared approach. It would also make it almost impossible for many obligated companies to use the individual compliance route. The Government have insisted that that route be kept open so that the field is not tilted in favour of exemption schemes, but unless something is done, individual compliers will find it almost impossible to obtain the necessary reprocessing certificates, except at prohibitive prices.
Another difficulty if things are allowed to remain as they are under the regulations is that there is no plan to ensure that the necessary collection, storing and reprocessing capacity is available to meet higher targets in future years. That problem has now been made more acute by the standstill over the past year while industry waited to see exactly what obligations the Secretary of State would impose and by his recent increase in exemptions to the £5 million turnover threshold. The effect will be a huge increase in the need for reprocessing capacity in a few years' time, which will not be met in advance by market forces.
Basically, we now need a mechanism to ensure that obligated companies, whether individual compliers or companies in exemption schemes, are matched with reprocessers producing recycling certificates. We need a requirement that only such certificates are acceptable evidence of compliance, and that such certificates will be issued only for a company's obligation tonnage in each material for which it has an obligation. The objective of the proposals would be to prevent expensive cross-material subsidy and to prevent small and medium companies being put at a competitive disadvantage by restricting access to their own waste products. The purpose would simply be to restore the pre-eminence of the shared approach principle, in which the Government claim to believe but which they have done nothing to prevent being undermined. It would also strengthen the position of Valpak as a multi-sector scheme, which we should like to consolidate.
I therefore give notice that an incoming Labour Government will seek an early review of the regulations to find the best means of securing those objectives.
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That is very much in line with the proposals set out in early-day motion 299, which has now been signed by more than 95 hon. Members from both sides of the House.
I appreciate that that is only an interim solution and that longer-term solutions must await a more thorough review by the advisory committee or an equivalent body. Several such longer-term questions need to be asked. First, is waste minimisation being sufficiently encouraged? That is not directly addressed in the regulations, except in the sense that less packaging means less obligation. Secondly, would it be sensible to have a split target—one that maximises recovery of commercial and industrial waste, which is relatively clean and easy to collect—and then add to that a separate domestic stream target? Thirdly, do the regulations sufficiently encourage re-use or positively discourage it?
There are other concerns, too. Hon. Members will know that local authorities have made forceful complaints. They are disturbed that they will be placed in a subordinate position to the private sector, especially where retailers set up rival schemes. The local authority recycling advisory committee has let it be known that retailers will threaten existing recycling infrastructures if they take control of car park schemes and reduce the viability of local collection rounds.
Despite all those substantial reservations about the regulations, I repeat that the Opposition strongly support the general principle of increasing recovery and recycling of packaging waste. Indeed, one might argue that the regulations do not go far enough. Under the regulations, Britain aims to recycle only fractionally over a quarter of our packaging—virtually the minimum allowed under the EU directive. By contrast, Germany—if I dare to quote a more successful country, without necessarily supporting the mechanism that it uses—already recycles more than three quarters, and the Netherlands recycles half.
Furthermore, we need to set targets to reduce packaging. Over the past year, packaging in Germany has decreased by 12 per cent. while in this country, INCPEN, the Industry Council for Packaging and the Environment, predicted a 4 per cent. increase in food packaging between 1993 and 2000. Despite all our reservations, we do not want further delays in view of the short time scales within which the recovery and recycling targets must be met. Further delays would only increase uncertainty in the industry and further undermine Valpak's viability. We are therefore content to allow the regulations through, but on the strict understanding that they will require urgent review along the lines that I have made clear.
4.58 pm
Sir Roger Moate: That was a rather muddled speech from the hon. Member for Oldham, West (Mr. Meacher). He was on strong ground when he expressed the valid concerns widely held outside the House about the possible advantages to the retail sector, but he spoilt his speech with his extraordinary and excessive abuse of the Secretary of State, and his failure to understand that the scheme has the great advantage—there are disadvantages, which I shall deal with—of having been developed in co-operation between Government and industry.

By expressing criticism, the hon. Gentleman was criticising those many people to whom he also paid tribute. He went on to promise a review, which we all

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welcome, but the Minister said that there would be a continuous process of review, even before the implementation of the regulations. There are strong points to be made, but the hon. Gentleman was rather muddled, and spoilt the strength of his case.
I am sorry that the debate is to be so short, as it is of enormous importance. I shall try to be brief. The paper mills in my constituency recycle about 1 million tonnes of paper a year, and there is a steel mill that recycles 1 million tonnes of scrap metal every year, so I can claim that we are in the forefront of UK recycling.
Years ago, as many hon. Members who had paper mills in their constituency knew, the paper industry was in decline. In recent years it has become a growth industry. That is because, previously, the industry was entirely dependent on imported raw materials—pulp. Now there has been massive new investment. More than £500 million has been invested in north Kent alone, protecting thousands of jobs and worth billions of pounds to UK Ltd. in terms of import saving. All that has happened because now we have our own indigenous raw material—recycled paper. There has been an industrial revolution, and it is quite an exciting story. It is estimated that the paper industry wants another 2 million tonnes a year to support further investment.
As well as that strong constituency interest, I must declare my interest as parliamentary adviser to the Paper Federation of Great Britain. I am also one of those who believe passionately in the need for the UK to achieve maximum recycling of waste materials—paper and board, glass, metal and plastics—as raw materials for further industrial production. By that I do not mean incineration in large-scale, expensive, subsidised waste-to-energy power stations.
With that belief I, like almost everyone else, warmly welcome the aim of the measure. It might therefore sound churlish to use this occasion to express serious concerns about the regulations. We have been told that we currently recover just over 2 million tonnes out of 8 million tonnes of packaging waste. The target is to raise that to almost 4 million tonnes in about three years. That is an ambitious target. We must find a way of using an additional 2 million tonnes of recycled waste materials. I agree entirely with my hon. Friend the Minister and with the hon. Member for Oldham, West that we had to avoid the system adopted by the Germans and the massive disruption caused to the market by the green point system. We had to avoid such a radical and sudden change in the system.
It was right to welcome the principles on which the Government embarked—to work with industry to develop a scheme for shared responsibility among all parts of the packaging chain. There should be no cross-subsidy between different packaging materials. The scheme was to be worked up co-operatively with industry. I pay tribute to the work done by the Secretary of State, and to many leaders of industry, who worked extremely hard over a period of years, giving up a massive amount of management time to produce the scheme.
However, I wonder whether all those who worked so hard envisaged the outcome—38 pages of mind-boggling regulations. I do not believe that that is what they had in mind. The Minister told us that 4,000 businesses must
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comply this year. In 2000, 9,000 businesses will have to comply. A recent survey showed that two out of three businesses are not even aware that the new regulations will come into force. When those business men try to read the regulations, their eyes will not only glaze over, but be double-glazed over, because the regulations are extremely difficult.
Mr. Piers Merchant: Schedule 4 charts the great amount of detailed data required from companies, including the type of packaging. Does my hon. Friend agree that that will put a heavy burden on many companies, and that, in many cases, the cost and complexity of gathering all that information will be greater than that of complying with the VAT regulations?
Sir Roger Moate: I congratulate my hon. Friend on having got as far as schedule 4. As he said, not only are the regulations complex; they are costly. My hon. Friend the Minister referred to a cost of £270 million to £280 million. That is the lowest estimate that I have heard, and it does not surprise me that he should give us the lowest. We have heard other figures, between £300 million and £600 million, and up to £1 billion, as the compliance costs on British industry. Those costs will have to be met by British industry in a relatively short time, so we should not underestimate their seriousness. The scheme might be good value, and better value than other schemes, but we must understand that it will be introduced at great cost to British industry.
There was a meeting at the House in January with representatives of the British Fibreboard Packaging Association. Like me and everyone else, they support the aims of the measure. I quote their summary of the worries expressed by much of industry. They state:
"Our main ares of concern are the burdensome complexity of the Regulations; their high cost; the risk that they will distort historical trade patterns and put UK industry at a competitive disadvantage to its EU counterparts; and, most importantly, that they may even reduce rates of recovery and recycling rather than increase them … Specifically, the draft regulations now allow any business with packaging waste on its own premises to use that waste to meet its recovery obligation at a much reduced cost compared to those businesses which have no waste arising."
It is understandable that such organisations should be concerned, as 75 per cent. of the product that their members manufacture is already recycled.
We also had representations, again expressing widespread concern, from the Association of Convenience Stores, which represents the owners and managers of 11,000 retail shops around the country. They, too, are worried that the cost of the proposals will fall disproportionately on small grocery businesses. People will ask how small shops can handle 50 tonnes of packaging material, which will be the requirement in the year 2000, but it takes only a small volume of glass to reach that level, so a group of shops might well fall in that category. We must take care to tailor the regulations correctly.
Why have all those concerns suddenly arisen, when we have had years to work up the regulations? I think that it is because of the sheer difficulty of translating into reality the splendid idea of shared responsibility. It is easy for a superstore, with masses of cardboard boxes at the back door and bottle banks at the front door, to meet its 47 per cent. obligation. However, a producer of cardboard boxes, who has no waste left on his premises, can discharge his obligation only by paying out hard cash.

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I think that I am right in saying that about half of the 8 million tonnes of packaging waste ends up with the retailer. That gives the retailer a disproportionate amount of power. It is therefore all the more important that retailers should play a part in the co-operative arrangements.
Part of the problem is that the costs arise because we do not have outlets for all the waste materials. They currently have no market value. We must ensure that industrial demand is created for those raw materials as soon as possible, which would place a higher price on the materials, reduce compliance costs and might then make the regulations unnecessary. In the meantime, we must ensure that they operate as intended. Bureaucracy should be kept to a minimum and everyone in the chain, including the major retailers, should co-operate to ensure that the system works. One estimate is that, under the present arrangements, the paper packaging industry alone would subsidise other packaging materials to the tune of £45 million a year. That cannot be fair.
I ask my hon. Friend the Minister to assure the industry that the regulations will work as originally intended. I urge him to repeat his promise of a review in order to meet the challenge posed by the hon. Member for Oldham, West. The regulations must be reviewed before they come into effect to ensure that they will work fairly. We have time: my hon. Friend has said that we are gathering information. Let us use that information to allay the fears that have been expressed. Will my hon. Friend confirm also that he expects the larger retail groups to enter into the spirit of the new Valpak and other co-operative arrangements to ensure that the burden does not fall unfairly on other sectors? Will he reiterate his assertion that the large retailers will not be able to use their surpluses of waste paper materials, such as corrugated paper, to subsidise their obligations regarding other categories of waste materials, such as glass and metals?
I sincerely hope that we shall not create a new, artificial market for waste certificates that is backed up by a large bureaucracy, as occurred with milk quotas. It is absolutely vital that, following the passage of the regulations—we welcome the measure—the new system should be scrutinised constantly to ensure that it leads eventually to a free market solution and not to a costly corporatist burden on British industry and the British people.
5.11 pm
Mr. William O'Brien: Most of the remarks of the hon. Member for Faversham (Sir R. Moate)—particularly the second half of his speech—supported what my hon. Friend the Member for Oldham, West (Mr. Meacher) said. My hon. Friend said that there must be a partnership between Government and industry to ensure that the regulations are applied equitably and that changes are made if and when they prove necessary.
In Committee, it was intended that the Environmental Protection Bill should empower the Secretary of State to introduce regulations. I submitted an amendment on Report, insisting that the regulations should come before the House before they were applied. It is vital that we debate important issues such as this, but I believe that the regulations have taken too long to come to this place.
The House must approve the regulations if we are to meet the significant and tight targets set by the European Union, of 50 per cent. recovery and 25 per cent. Recycling
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by 2001. The industry debated loud and long about finding an equitable basis for sharing the legal obligations across the packaging chain, and arrived at a compromise solution at its meeting on 15 December. The industry commenced consultations in 1993. The present regulations are not perfect but, as the Minister said, they must be passed tonight. They are pioneering measures.
Mr. Nicholas Winterton: I am grateful to the hon. Gentleman for giving way and for agreeing with most of the remarks of my hon. Friend the Member for Faversham (Sir R. Moate), who spoke from his great experience in the paper and board industry. Should not the hon. Gentleman emphasise that we must not distort the market in respect of these regulations? It would be unfortunate if, as my hon. Friend said, certain large retailers were allowed to use their packaging to subsidise other areas of their recycling responsibility. That would have an unfair impact on other sectors of the paper and board industry.
Mr. O'Brien: I made that point when I intervened on the Minister. He assured me that the market shares the responsibility to collect or recycle certain materials within the recovery chain. I therefore assume that the issue has been resolved, and I shall address it only briefly in this debate.
We must ensure that all sectors of the industry have a common goal of minimising the total cost of the national recovery scheme. Agreement was reached on 15 December 1995 regarding the four principal areas of concern in the packaging chain: the packaging raw material manufacturers, the converters, the packer/fillers, and the retailers.
Agreement was reached on 15 December on the basis of a majority; it was not a unanimous decision. Concern has been expressed since that meeting, and it was comforting to hear the Minister confirm that the regulations are not set in stone and will be reviewed as and when that proves necessary. The purpose of shared responsibility is to reduce the likelihood of any one group being able to profit at the expense of the rest, thereby inflating the total cost of the scheme. That concern has been expressed on more than one occasion.
Mr. Sheerman: There is no wicked scenario: companies will make commercial judgments within their sectors. Unless there is regulation to control their activities, the issue will never be resolved fully and companies will continue, quite rightly, to pursue their particular commercial interests. We have a dog's breakfast of regulation because a dog's breakfast is better than no breakfast at all.
Mr. O'Brien: We must establish who will regulate the regulations. I believe that that is the duty of the Environment Agency, but the Minister and the Department must take some responsibility for ensuring that the regulations apply fairly and equally across the industry.
I remind the House that the all-party group on sustainable waste management has held many meetings to consider these issues and has listened to speakers representing all sides of the industry. We must address this controversial matter. The Minister's assurances are

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encouraging, but we must ensure that he delivers on them. Some packaging manufacturers claim that the regulations are inequitable because retailers and supermarkets may carry an unfair and insufficient share of the obligations. Reference has been made to the involvement of retailers and their ability to use transit packaging, predominantly paper and board, to help to discharge their responsibilities. They could easily use the cardboard boxes and paper packaging in their back-yards to fulfil their obligations, whereas, in many instances, those materials should be returned to the supplier in order to distribute the responsibility fairly throughout the industry. Some of the supermarket chains could offset their responsibilities without joining a multi-material collection scheme.
In an Adjournment debate that I secured on 15 January, I suggested that the number of companies excluded from the regulations must be kept to a minimum and that all businesses, people and commercial undertakings involved with packaging must be encouraged to join Valpak or some such scheme. Time will tell whether the £5 million cut-off point is satisfactory. It must be stressed that the regulations should not be a burden on small businesses and that it will be in their interests to join a collective industrial scheme to ensure that their legal obligations are met. The Minister referred to registration. I think that it would be more economical for small businesses to come together for legal advice and in other situations that could develop in the industry.
It is paramount that all kinds of waste must be included in recovery and recycling principles. I refer particularly to plastic and glass. If we are not careful with the regulations, some businesses might have to pick up the most expensive part of recycling and recovery while others will achieve their targets at the least expense. Wood in packaging will also have to be addressed—if not today, in future. That matter was raised in the Adjournment debate, but it has not been settled. As a matter of fact, we have not yet had an interpretation of packaging. The Advisory Committee on Packaging will have to address that, too. Some retailers may find paper and board easier to recover than other materials, and I hope that the advisory committee will monitor that. It must also ensure that the directive's targets, implemented by the regulations, are achieved in a free-market scenario.
The Minister referred to the legislation as pioneering. There may therefore be some conflict in the application of the directive in the market. It would be helpful if the advisory committee were to publish a report from time to time on how the industry is going under the regulations. Is that within its responsibilities? If so, how often could it publish such reports? Would they be available to hon. Members in the Library or the Vote Office?
If the industry is to achieve its goal, it must do so without imposing excessive costs. Reference has been made to some parts of the industry having to meet excessive costs of £40 million or £45 million. Indeed, packaging recovery in some European Union member states has carried excessive costs. The German scheme has been mentioned. I am advised that, in Germany and Austria, citizens pay about £20 a year in inflated product costs so that certain targets can be reached. That point was made in exchanges earlier. The Government are suggesting a cost to United Kingdom citizens of between £5 and £11 a head a year. If such a target is set,

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a monitoring exercise must be undertaken to report on progress in achieving it. We should receive progress reports on how the advisory committee is viewing the legislation and the regulations.
My hon. Friend the Member for Workington (Mr. Campbell-Savours), who was in his place at the beginning of the debate but had to leave, asked me to pass to the Minister a number of questions from his mailbag. Due to the shortness of the debate, I shall not read them out.
Mr. Robert B. Jones: If I hear from the hon. Member for Workington (Mr. Campbell-Savours), I shall be delighted to try to assist him in any way I can.
Mr. O'Brien: I am sure that that will meet my hon. Friend's concern. He had to leave to attend a Committee, so I said that I would make the points on his behalf.
I support the regulations, but stress that hon. Members who have an interest in the way in which they work out before the two-year period ends should be provided—if not directly, through the Library—with progress reports from the advisory committee.
5.24 pm
Dame Peggy Fenner: My hon. Friend the Member for Faversham (Sir R. Moate) has been hearing from small businesses. I have the honour of being chairman of the all-party retail industry group. My hon. Friends will be aware that, under the regulations —the hon. Friend the Member for Oldham, West (Mr. Meacher) referred to it—retailers have 47 per cent. of the recovery obligations. With the packers and fillers, that comes to 83 per cent. of the responsibility for recovery of packaged waste.
The British Retail Consortium, the Food and Drink Federation and the alcoholic drinks industry have issued a joint statement in support of the regulations. A number of distinguished members of the all-party sustainable waste management group have worked over the years on how we are to survive, given our packaging methods, and how we are to achieve recovery and recycling. Whatever criticisms and concerns are expressed, everybody must support the regulations. My hon. Friend the Member for Faversham referred to small businesses in the retail industry. I should like to make two points about them.
I, too, have had correspondence with the Association of Convenience Stores which, as my hon. Friend the Member for Faversham said, comprises 1,500 retail member companies. It supports almost 11,000 local stores and 101,000 employees. The association is very worried that the regulations will be a burden on its members. Although businesses that handle less than 50 tonnes of packaging waste a year or have annual turnovers of less than £5 million will be exempt until 2000, the threshold will then be lowered to a turnover of £1 million. In today's market, that is not such a sum, and it could be achieved by a fairly small business. Some concern has been expressed by small retailing groups that burdens will bear disproportionately on small retailers.
The British Retail Consortium has been undertaking some research to try to correlate the financial turnover in different kinds of retailing businesses with the amount of packaging handled by such sectors. Not much research at present helps small retailers in that respect. If the BRC

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research indicates that unnecessary burdens will be experienced by small retailing businesses, it will provide the advisory committee with details so that the committee can consider the appropriateness of changing the threshold.
Although I am reassured in part by the comments of my hon. Friend the Minister about the continuing review, I hope very much that he will emphatically reassure small retailing businesses that the threshold particularly will be one of the factors that are taken into account by the Advisory Committee on Packaging during the two-year period when it considers the burdens that will be placed on the smaller sections of the retailing business.
5.29 pm
Mr. Barry Sheerman: The regulations aim to achieve the dual objective of a continuing improvement in our recycling capacity without harming our competitiveness. That can be achieved, but in seeking a balance between regulation and a free market we are bound to have problems.
At some stage, the Government should say, "This is the objective, and we have to achieve it." I believe that much of the delay has been caused by the difficulty of getting full agreement, given that everyone in the sector is competing for an advantage in the market. I am not criticising any of the players for the delays and the difficulties. I would rather that regulations were laid today than we had no regulations at all. I back my hon. Friend the Member for Oldham, West (Mr. Meacher) on that point.
We must ensure that the regulations remain on course. When I mentioned the Environment Agency in my intervention, it was not a disparagement or a criticism. We must ensure that the agency is fully equipped and resourced to carry out its policing and auditing role. Many of us who are interested in this area, and many in the private sector who will be affected by the regulations, do not want to criticise the Environment Agency, but we want to know whether it has the necessary resources.
There is a parallel with the Environment Trust, which was established by the same Secretary of State for the Environment. The problem was whether, with only a chairman and a part-time secretary, it could deliver a system that worked. The evidence up to now is that they are having great difficulties making the system work. I put that in the Minister's mind, although by the time anything happens, the changes will be made by a Minister with a different political complexion.
It is important for industry to know that we are on track to achieve the two objectives: good recycling and meeting targets. Unless we are geared up, I suspect that we shall not meet the targets for the end of the century. We should develop expertise in this country, which we could sell to the rest of the world. There is a great market in waste management. It requires an understanding of the pressures and the best ways of using the different technologies—not just recycling—to tackle the problems of waste management in a sophisticated urban economy. That is a great challenge and we could have a competitive advantage over other European countries. We must seize that advantage and find the right balance.
My hon. Friend the Member for Oldham, West has never been a great admirer of the German system, but he believes in a good regulatory regime. All of us who know
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anything about this business know that the right balance is to have a good regulatory regime and to listen to the private sector, which ultimately has to make a profit.
5.33 pm
Ms Joan Ruddock: I apologise, Mr. Deputy Speaker, but the Whips who assist us had calculated that I would be speaking slightly later. I apologise for the delay. [Interruption.] I did not hear the Minister, who made a remark from a sedentary position. I congratulate my hon. Friends on their important contributions to the debate, which were based on knowledge of the subject and were supportive of the remarks of my hon. Friend the Member for Oldham, West (Mr. Meacher).
The draft regulations in the European directive have satisfied no one. There has been enormous delay in bringing them to the House. As we have heard from Members on both sides of the House, the regulations contain nothing that we can wholly praise. As my hon. Friend the Member for Huddersfield (Mr. Sheerman) said, we are left with a dog's breakfast which we have had to acknowledge is better than no breakfast at all.
The Minister made much of the consultation that the Government have had with industry. My hon. Friend rightly criticised that consultation as being incomplete and imperfect. It excluded the other obvious players in the field: the whole of the waste management industry, local government and the voluntary sector. It is not reasonable to consult and pursue ideas about regulations on packaging without involving those important key players.
Under these arrangements, the retailer may displace existing local authority schemes and efforts. The provisions will not lead to a new recycling tonnage, and could affect the economies of scale that local authorities are able to make. That is enormously important: Labour local authorities have been at the forefront of recycling, albeit at the low levels that we have achieved in Britain.
The Minister said that it was important to use market mechanisms, and that only the markets could deliver. The arrangements in the directive are unlikely to lead to the creation of those markets. The producer responsibility mechanism is almost wholly geared to generating or rearranging the supply side of recycling. A number of Conservative Members represent the paper and board industry. They will know that the newsprint recycling industry is already suffering from a glut. What is needed is not just a rearrangement of the supply side, but the setting of post-consumer recycled content quotas which would ensure effective markets. Nothing that the Minister has said leads us to believe that that will happen.
Throughout the regulations, there is little interest in creating markets for recycled goods. More significantly, there is a lack of any mechanism for waste reduction. The Minister said that the Government's intention—I hope that I quote him accurately—is to minimise the amount of packaging produced and to encourage as much re-use as possible. Neither I nor any of the expert commentators whom I have consulted have been able to find where in the regulations those mechanisms are established. Indeed, the regulations are likely to legitimise the status quo by encouraging increases in waste overall, even though the percentage recycling target may be achieved.
I want to comment on European comparisons. Much has been made of the system in Germany, which has been vilified. We all acknowledge the difficulties and the lack

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of appropriate markets created in advance of the arrangements. Virtually every other European nation is ahead of the United Kingdom in the packaging sector. In every type of packaging material, the leaders usually recycle at least twice the amount recycled in Britain, so there is no room for complacency in regard to packaging regulations.
In view of the short time at our disposal, I shall not repeat the points made by my hon. Friends. A little humility from Ministers would not go amiss, given the massive delays in the United Kingdom's compliance with the European directive. No one is satisfied, either in the House or outside. We shall not oppose the regulations as we know that in government we shall be able to revise them in the interests of business and the community at large.
5.39 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. James Clappison): With the exception of the contribution from the Opposition Front Bench, the debate has produced what I regard as a wide measure of agreement and a warm welcome for the scheme. It involves the important principles of producer responsibility, shared responsibility throughout industry and dialogue between Government and industry, which we have been keen to see throughout the whole process. That has resulted in what we consider to be a low-cost, efficient approach to waste recovery which combines a light regulatory touch with deterrence to those who seek a free ride.
My hon. Friend the Minister of State was right to say at the outset that these are pioneering regulations. We shall need to listen to the concerns that are expressed to us as the regulations unfold, and it was for that purpose that we established the Advisory Committee on Packaging under Sir Peter Parker. I am sure that the committee will want to take on board many of the views expressed today by hon. Members on both sides of the House.
My hon. Friend the Member for Faversham (Sir R. Moate), who drew attention to the great success of the paper industry in recent times, made some important points. I believe that he was particularly enlightened in stressing the great advantage of the scheme: the fact that it was developed through co-operation between Government and industry. That is a fundamental point. As for the points of detail on which my hon. Friend sought reassurance, I believe that I can give him that reassurance. As I have said, we shall keep the process under review and we shall require information before the regulations are implemented. This year will be devoted to the gathering of information and registration and the regulations will come into force in 1998–99.
My hon. Friend also mentioned larger retailers. My hon. Friend the Minister of State said a little about that in his opening speech. I emphasise again that we expect
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large retailers to be part of the collective schemes and to play their part in them. We think it unlikely that large retailers will be able to come anywhere near fulfilling the whole of their obligation—which, as has been said, amounts to 47 per cent.—through the waste collected at their back door; we believe that they will therefore find it necessary to join a collective scheme.
My hon. Friend the Member for Faversham raised the question of material cross-subsidy. One of the criteria against which applications for schemes will be considered for registration by the Environment Agency is the minimisation of the potential for such cross-subsidy. That will be an important consideration during the competitive scrutiny of prospective compliance schemes. I hope that I can reassure my hon. Friend further by revealing to him the attitude of Sir Peter Parker, who has said in a letter to my right hon. Friend the Secretary of State that he considers it
"important to ensure that all sectors play an equitable part in relation to the domestic waste stream".
I am sure that Sir Peter will approach his chairmanship of the advisory committee very much in that spirit.
My hon. Friend the Member for Faversham was concerned about small businesses, as was my hon. Friend the Member for Medway (Dame P. Fenner). They will know of the thresholds applying to small businesses. There is a turnover threshold of £5 million, rising to a £1 million threshold by the year 2000. We shall be keen to listen to the voice of small business, as I am sure the advisory committee will be as well.
In a balanced and authoritative speech, the hon. Member for Normanton (Mr. O'Brien) also rightly emphasised the need for co-operation and the need for all four principal parties in the waste chain to be involved. The hon. Member for Huddersfield (Mr. Sheerman) made what I interpreted to be a not entirely unwelcoming speech. Given that background, it is a shame that Opposition Front Benchers had to resort to nit picking. They expressed their confidence in the outcome of the election, which is something of a ritual for Opposition parties. I believe that the result will be the same as it has been on so many occasions in the past, but I must tell the hon. Member for Oldham, West (Mr. Meacher) that I also believe that if his dreams were to come true and his party were to form a Government, the hiving-off process that he envisages would be overtaken by another process of hiving off which might affect the hon. Gentleman himself. Certainly, we do not regard it as hiving off—
It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14B(1).
Question agreed to.
Resolved,
That the draft Producer Responsibility Obligations (Packaging Waste) Regulations 1997, which were laid before this House on 29th January, be approved.

Elections (Candidates' Expenses)
5.44 pm
The Parliamentary Under-Secretary of State for the Home Department (Mr. Tom Sackville): I beg to move,
That the draft Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1997, which was laid before this House on 11 th February, be approved.
Mr. Deputy Speaker (Mr. Michael Morris): I understand that with this, it will be convenient to discuss the following motion.
That the draft Local Elections (Variations of Limits of Candidates' Election Expenses) (Northern Ireland) Order 1997, which was laid before this House on 12th February, be approved.
Mr. Sackville: On occasion, the Government propose to the House that we upgrade the limits for money that can be spent by candidates at local and parliamentary elections. That has normally happened every two years, but, partly as a result of the very low inflation that the Government have achieved, it has happened after three years on this occasion. The limits will be increased by 6.95 per cent.
I have racked my brains as to what else can be said on the subject, but I have failed to find anything, so I shall limit myself to commending the orders to the House.
5.45 pm
Mr. Doug Henderson: I am not sure whether the Minister was complaining that he could not rack any more, or whether he had done too much racking and could not find anything; but the House will have heard what he said.
It does not surprise me that the Government wish to nod the order through promptly. I do not intend to speak for long, but it must be said that the public expect some transparency in the way in which we deal with election funding. The order is important, because it regulates the amount of funding that any candidate who contests the next general election, or elections in Northern Ireland, can spend. It is important for that to be dealt with on the Floor of the House, where a little more attention is paid to the matter than might be the case in Committee—although not much more, I suspect, looking around the Chamber.
Mr. Barry Sheerman: The Minister could find very little to say, because he could not or would not address the fact that room for manoeuvre is very restricted. If we were able, as we are not, to talk about the £40 million war chest that the Tories have obtained from devious sources, and are going to use—
Mr. Deputy Speaker: Order. The hon. Gentleman is right: he is totally out of order.
Mr. Henderson: I am rather glad that I took that intervention, and learned the mood of the House. I might otherwise have been tempted to move a little further than the precise terms of the order.
The Opposition support the order. We recognise the need to uprate the amount of money that candidates can spend in line with inflation. Nevertheless, Mr. Deputy
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Speaker, I beg your indulgence so that I may comment on some of the inadequacies of the order. It deals only with expenditure at local level in electioneering.
Nowadays—in contrast to the days, 50 years ago or more, when Parliament first drew up orders such as this—the expenditure incurred by a local candidate pales into insignificance compared with the amount incurred by parties nationally in a general election campaign. It seems to me a little crazy that we can examine only the expenditure that a candidate can incur at a local level, and cannot consider how much is incurred by his political party at national level.
Hon. Members will make their own judgment on how any political party can best get its general election message over. Some may believe that it is still more effective to tramp around the streets, knock on doors or charm the locals in a club, but others—I include myself in this category—think otherwise. We recognise the importance of those factors, but by-elections are different, in that only a small margin of votes may be at stake, with a large effort concentrated on them. In a general election, that kind of campaigning, which is relatively cheap, is not so effective, and does not influence public opinion in the same way as the bashing of political parties on billboards, direct mailing—which is very expensive—or saturation propaganda in newspaper advertisements.
If we believe that that second group of factors has become more and more important in persuading people in our political system, it strikes me as logical that regulations governing the amount that any political party can spend in an election should also focus on the ability of parties to raise funds for campaigning purposes.
I am told by Library staff that a candidate can spend an average of £8,000. There were 651 candidates at the last general election, which means that the total was £65.2 million. That pales into insignificance compared with the war chest of £40 million which this morning's newspapers tell us the Conservative party will have at its disposal in the election. The House needs to conduct a review of the way that political parties and elections are funded. It is not enough to regulate what is happening locally, although that is important. It is crucial to look beyond that, at how public opinion is influenced and how political parties raise funds to influence public opinion.
The British people would not want rich people similar to Ross Perot in America, Berlusconi in Italy—[Interruption.]—or Sir James Goldsmith, as the Government Whip mutters—because it is not right that those who are phenomenally rich should be able to build up a political party and move into the political spectrum with virtually no support among the people. The vast majority of people will not agree with that, and that is why they will fully support a review of the regulations.
It is not possible at this time, eight weeks before a general election, to undertake a major review of the matter, but the next Parliament should look not only at how political parties are regulated and how much expenditure they can incur locally, but at national provisions as well. That is the way to ensure long-term democracy, and the British people will expect serious politicians to support it.
Like the Minister, I have trawled my brains on the order. I support it, because the change is necessary. However, it is also necessary for the House to signal a long-term review of the funding of political parties and

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election campaigns, to make sure that the public and democracy are protected and that the rich cannot just move in and buy political power.
5.52 pm
Mr. Archy Kirkwood: The order is nonsense. I agree with much of what the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) said. Everybody understands that election thresholds should be valorised each year. The last variation order was presented on 13 March 1994, and this one simply catches up with the increase in the retail prices index over that time. If everybody accepts that inflation should be reflected in the base limit for expenses for candidates, why not recognise that in the RPI and amend the 1983 legislation so that, as a new electoral register is produced each February, the RPI will automatically calculate a new threshold limit for expenses?
It is a complete waste of parliamentary time for a poor Minister to have to sit in a darkened room and rack his brains, although goodness knows what that must look like. Even the official Opposition spokesmen have trouble trying to find something to say. I say "snap" to that. Why do we do it? Why not have annual RPI uprating for the new register each February? That would spare us the agonies to which Ministers and Opposition spokesmen are subjected.
5.53 pm
Mr. Barry Sheerman: I was tempted to oppose the order after studying it in detail. We are debating an important subject. What could be more important to democrats than the representation of the people? One of the finest aspects of our electoral system is the tight control of expenditure by candidates. Members of other legislatures, such as that in the United States, look with a mixture of astonishment and admiration at our system, and at the tight control of how much each candidate can spend in an election.
You are a well-travelled Member, Mr. Deputy Speaker, and you will know that, under the United States' system, there is no limit on what a candidate can spend. One of the great dangers of the US system and those of many other countries is that a very wealthy person can almost purchase votes because of the intensity of his campaign. That is especially the case if the ability to spend is linked to the ability to buy television and radio time. Hon. Members can count their blessings not only that is there a strict limit on individual expenditure but that, nationally, there is a strict attitude to political broadcasts on radio and television. Long may that continue and prosper.
The one issue in the order that impinges directly on representation of the people is that each candidate is restricted to expenditure of £8,000. But a party with enough money to take all the billboards in my constituency and all the advertising space in my local paper makes nonsense of that by undermining the legislation. By taking space on billboards alone, that party can double the allowable expenditure for each candidate. That faces me, and I have perhaps one of the best, well-oiled electoral machines in the country. Huddersfield Labour party has no equal in the land for membership and commitment, and it uses every modern technique to maintain Labour's majority. I have no concerns on that score.
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My constituency is surrounded by marginal seats, but the Conservative party will spend so much in my constituency, to which many people come from outlying constituencies for shopping and entertainment, that it will dwarf my £8,000. In the election campaign, possibly £50,000 will be spent on poster sites alone and another £100,000 will be spent on advertising. Given that reality, the order is nonsense.
In a full debate on the nature of our democracy and on the impact of the representation of the people legislation, we would examine in detail not only the principles but the fact that the system is unfair to parties with fewer resources than others. That comes down to the grass-roots issue of one candidate having an unequal chance against other candidates. I fear that that will go on, because we have allowed a great difference.
When I entered politics, I stood for my first seat, in 1974, in Taunton. At that time, not only was expenditure much lower, but the propensity for big poster campaigns and national advertising, even by the Conservative party, was far less pronounced. Now I read of £40 million, and of more money flooding in from China and the far east and from all kinds of dubious sources to the Conservative coffers, and I fear that that will lead to the undermining of our electoral system.
I am not surprised that, before this important debate, the Minister sat in a dark room scratching his head and thinking of something to say. He does not care about our parliamentary democracy, but the Opposition do.
5.59 pm
Mr. Jim Dowd: Thank you, Mr. Deputy Speaker. I speak somewhat earlier than I had expected, after the Minister's sparkling introduction.
The orders are the result of the periodic review of election expenses and, as has been stated, could hardly be more straightforward, particularly the Northern Ireland one. As the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) pointed out, they are the product of an almost automatic process, and are before us this evening to ensure that they have effect in time for the electoral festivities, which are but a few weeks away.
The Northern Ireland order merely repeats exactly the provision for the rest of the United Kingdom according to the different procedure. I did have a couple of questions, assuming that a Minister with responsibility for Northern Ireland might be here. Although one is not, I shall read them anyway, and perhaps the Minister could arrange for the responses to be sent on.
Mr. Sackville indicated assent.
Mr. Dowd: I see the Minister nodding. I am grateful for that.
The questions relate to giving some indication of when and how the other remaining regulations relevant to elections in Northern Ireland—the Representation of the People Act (Amendment) Regulations and the Northern Ireland Local Elections (Amendment) Regulations—will be processed. If I could have that information, I should be grateful.0
Despite the slight lapse into hyperbole by my hon. Friend the Member for Huddersfield (Mr. Sheerman), I am sure that the Huddersfield Labour party is an

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excellent fighting machine. It is certainly a consistently successful one, as his presence here this evening and over many years representing Huddersfield testifies, but he strikes at some pertinent points. The limitations for expenses are a fiction, because they control nothing but individual candidate expenses.
To some degree, the whole legislative framework under which we operate our elections, both parliamentary and local, fails to recognise anything other than candidates. It fails to recognise the existence even of political parties and the machinery they have, whether they are genuine political parties or the inventions of rich individuals.
Although the order calculates in considerable detail the theoretical maxima allowed to be spent by individual candidates at the general election, the whole world knows that they give little indication of the amounts that will actually be spent, particularly during a general election. Taking the 362 county constituencies and the 297 borough constituencies in the UK at the time of the next election, and an average electorate of about 67,000, as my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) said, that would imply maximum expenditure of £5.5 million in total, if a party were to contest every seat in the UK, and I do not think that that is entirely probable.
However, it is authoritatively reported that Sir James Goldsmith, the well-known grocer who has been mentioned, plans to spend some £20 million on his Europhobic adventure at the general election. In addition, today we have read reports, again alluded to already—I will not elaborate on them, lest I incur your wrath, Mr. Deputy Speaker—of £40 million from a variety of highly dubious sources being deployed by the Conservative party in a frenzied last-ditch effort to buy an election that it richly deserves to lose.
Only one small part of that money will appear on official returns to returning officers—although it is a failed effort, anyway—but, as my hon. Friend the Member for Newcastle upon Tyne, North has already stated, the whole issue of party funding is a source of continuing scandal and shame to the Tory party. Our action to date in refusing donations from overseas nationals and in
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revealing the source of all donations of more than £5,000, together with our commitment to review the regulations governing the funding of political parties, stands in marked contrast to the Tory party's disreputable conduct in this matter, where we have also witnessed the questionable use of official overseas visits, paid for by taxpayers, to raise money for the Conservative party.
Mr. Sheerman: Did my hon. Friend read the reports in the McAlpine memoirs this morning that the Prime Minister himself played an active role in that fund-raising activity?
Mr. Dowd: I did indeed, as did many other people. The revelations by the former treasurer of the Conservative party—this is not just some minion at central office, but the person who was responsible for spearheading the fund-raising campaign—add to the shame and scandal that attach to the Conservative party. It is grossly out of touch with public sentiment. The public want more openness, transparency and honesty in relation to the funding of political parties and where those funds come from.
We cannot oppose the orders. They are self-evidently sensible. As I have said, I have great sympathy with the point of the hon. Member for Roxburgh and Berwickshire about whether this is the best use of parliamentary time, given that all we are doing is taking the last orders and multiplying the figures by the retail prices index. The House can be confident that, if the British people give us the opportunity in a few weeks' time to form the Government, the Labour party will take the whole question of party political funding far more seriously than the Government ever have.
Question put and agreed to.
Resolved,
That the draft Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1997, which was laid before this House on 11th February, be approved.
Resolved,
That the draft Local Elections (Variations of Limits of Candidates' Election Expenses) (Northern Ireland) Order 1997, which was laid before this House on 12th February, be approved.—[Mr. Sackville.]

Directors' Emoluments
6.5 pm
The Minister for Competition and Consumer Affairs (Mr. John M. Taylor): I beg to move,
That the draft Company Accounts (Disclosure of Directors' Emoluments) Regulations 1997, which were laid before this House on 6th February, be approved.
The Companies Act 1985 requires all companies registered in Great Britain to provide information on directors' remuneration in the notes to their annual accounts. The information that companies are required to provide is set out in schedule 6 to the Act. The purpose of the disclosure is to permit shareholders and other users of the accounts to satisfy themselves that the directors, in setting their remuneration, are acting reasonably.
The Government believe that a statutory disclosure requirement continues to be necessary for all companies to safeguard the interests of shareholders. The purpose of the regulations is to bring the schedule 6 requirements into line with best practice in this sector, as set out in the recommendations of the study group on directors' remuneration chaired by Sir Richard Greenbury.
Hon. Members will recall that the Greenbury study group was asked to make recommendations on the determination and disclosure of directors' remuneration and to prepare a code of practice for use by the United Kingdom's larger listed companies. When the report was published in July 1995, it was welcomed by the Government as a very helpful contribution towards improving the accountability of directors to their shareholders. We particularly welcomed the report's emphasis on aligning the interests of directors and shareholders by linking pay to performance.
The Greenbury report focused on listed companies and its main recommendations were aimed at listed companies, investor institutions and the London stock exchange. Its key recommendation on disclosure of directors' remuneration was that a report should be sent to shareholders each year explaining the company's approach to executive remuneration and providing full disclosure of all elements in the remuneration of individual directors. The London stock exchange incorporated that recommendation into its listing rules in December 1995.
The Greenbury report also made two specific recommendations to the Government on disclosure of directors' remuneration: that the Government should remove from companies that make full disclosure of their directors' remuneration the obligation to show it in £5,000 bands and that the Government should review the present requirements for disclosure of information on directors' pensions. The regulations implement both recommendations. They also meet the commitment given to the House by my right hon. Friend the President of the Board of Trade that the provisions in the Companies Act relating to disclosure of directors' remuneration would be amended so that they were consistent with the listing rules.
The regulations lay down a basic disclosure rule, which is set at a level appropriate for unlisted companies, leaving it to the listing rules to require more detailed disclosures by listed companies. For example, the regulations require disclosure of aggregate emoluments and those of the highest-paid director, whereas the listing rules require disclosure of the remuneration of each director.
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The Government accept that it would not be appropriate for unlisted companies, whose shares are not publicly traded, to be subject to the very detailed disclosure recommended for listed companies by the Greenbury report. This applies particularly to very small companies, where frequently all the shareholders are also directors of the company; indeed, the regulations propose a specific exemption from many of the disclosure requirements for such companies.
I deal now with the details of the new disclosure requirements in the regulations. The first substantive regulation covers the aggregate emoluments of directors. The new provisions retain the present requirement on all companies to show the aggregate amount of directors' remuneration, but they follow the Greenbury recommendations by requiring companies to provide information on each element of directors' remuneration.
Companies are therefore required to disclose figures on basic pay, annual bonuses, share options, long-term incentive schemes and company contributions to money purchase pension schemes. This will provide more useful information to readers of company accounts by allowing them to see how companies structure their directors' remuneration packages, but should not mean extra work for companies since the individual figures are needed to compile the overall total.
The second substantive regulation relates to the disclosure of the emoluments of the highest-paid director. The regulations raise the aggregate emoluments threshold for disclosure from £60,000 to £200,000. The threshold of £200,000 relates not to the pay of the highest-paid director but to the pay of the board as a whole. Nevertheless, such an increase will be welcome to many private businesses whose directors do not earn huge amounts, while continuing to catch the very highly paid.
Companies in which aggregate emoluments total £200,000 or more will be required to provide a breakdown of the highest-paid director's remuneration. We have, however, dropped the requirement to show the emoluments of the chairman when he is not the highest-paid director and the requirement to show the number of directors within each pay band of £5,000 since we do not believe that these disclosures provide users of the accounts with important information.
Mr. Jim Cousins: Why has the Minister reached that conclusion? It is extremely important that shareholders in larger companies and the wider public are fully informed about the entire structure of directors' remuneration. The Minister's proposal means that only in the case of the highest-paid director, where the aggregate emoluments exceed £200,000, will there be an individual disclosure. That individual disclosure could be vital in the case of company chairmen and, indeed, all company directors. That surely is the purpose of the stock exchange's insistence on such disclosures.
Mr. Taylor: As the hon. Gentleman rightly said, the stock exchange asked for far more in relation to listed companies. Under the regulations, we try to achieve a disclosure requirement that is manageable for all corporations. The Companies Act and schedule 6 apply to all companies, and we want the general requirement to be appropriate to a small company and the stock exchange listing rules to be appropriate for listed companies. That seems to be the proper balance.

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The general domestic law that we are debating goes further than European law. With regard to listed companies, Greenbury goes further than either and is to be implemented by the stock exchange to the extent that it goes further than the domestic law.
We do not believe that small companies should be put to a great deal of trouble in evaluating, say, a share option scheme where there is no trade in the share, but at least a reader of the accounts will be put on notice. In a case such as that to which the hon. Gentleman referred, if a shareholder reads the accounts and is startled by or dissatisfied with the emoluments of the highest-paid director, it is open to him to attend the annual general meeting and call for the chairman of the remuneration committee—this is also a requirement—to give information about others, too. I am sure that, in a well-ordered company, the chairman of that committee would do just that at the AGM.
Mr. Cousins: I am following the Minister's arguments extremely closely, but how many individual shareholders find their way to companies' AGMs, be those companies large or small? If a significant proportion of individual shareholders—leaving aside the institutional ones—were to find their way to companies' AGMs, those meetings would all have to be held in the Birmingham exhibition centre.
Mr. Taylor: It is not for me to give a general instruction or warning to or in any way coerce shareholders to attend AGMs; many will probably read the annual report and accounts and find that nothing in them motivates them to attend. However, if they are concerned and wish to ask a question, they can do so.
One of the most important improvements made by the regulations will be the disclosure of information on directors' pensions. The current disclosure rules require companies to include contributions paid in respect of directors under any pension scheme in their disclosure of directors' emoluments. Disclosing company contributions to money purchase schemes gives an accurate picture of the value to the director and the cost to the company of the benefits accrued. We have therefore retained the use of this figure in the regulations although, in line with our general policy that companies should disclose each element of directors' remuneration, we have required companies to disclose such contributions separately.
We do not believe, however, that the present disclosures are always meaningful in the case of defined benefit schemes—pension schemes—where the level of company contributions may be misleading if, for example, a contributions holiday is in force or the director has received a big pay rise and is close to retirement.
The regulations therefore simply require companies to disclose the number of directors who are accruing benefits under defined benefit schemes as a marker to users of the accounts. Companies where aggregate emoluments for the board total £200,000 or more are additionally required to disclose the accrued pension benefits of the highest-paid director.
The regulations underpin the listing rules on listed companies by setting out a basic rule that uses compatible definitions. With minor exceptions, listed companies will have to make only a single set of disclosures to comply with the Companies Act and the current stock exchange listing rules. The pension disclosure rules are a case in point.
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The regulations and the listing rules will adopt a common policy in their treatment of the two types of pension scheme and will use compatible definitions. The listing rules will, however, build on the regulations by requiring listed companies to provide, in respect of defined benefit schemes, the amount of the increase over the financial year in each director's accrued benefit and either the transfer value of that increase or sufficient information to enable a reasonable assessment of the transfer value to be made. We believe that this is important information in respect of listed companies, but that it would not be appropriate in the case of unlisted companies. The shares of such companies are not widely held by the general public and it would be unreasonable to require them to employ an actuary to value pension entitlements for the purpose of the annual accounts.
The draft regulations follow the current statutory rules in requiring very small companies to provide information only to shareholders and not also to Companies House. In the case of the disclosure of directors' aggregate emoluments, small companies will be permitted to provide a single figure covering all types of remuneration, and will not be required to provide a breakdown by type of remuneration. Small companies do not have to provide information relating to the emoluments of the highest-paid director.
The regulations meet the Government's commitment to make the statutory disclosure rules on directors' remuneration consistent with the Greenbury recommendations. In doing so, they will provide more useful information to shareholders than is currently required without increasing the disclosure burden on companies. They deserve the support of the whole House.
6.19 pm
Mr. Stuart Bell: I am sure that the regulations will receive the support of the whole House, and that the serried ranks around us will, if need be, pour into the Division Lobby to support the Minister. I congratulate him on having mastered a complex measure, on giving the House the benefit of his knowledge and on the concise way in which he put his views to the House.
The Minister touched only briefly on the Greenbury report. The regulations are an attempt to remove the so-called overlaps between the Companies Act 1985 and the stock exchange's requirements, caused by its adoption of the Greenbury recommendations. However, according to a press release from the office of the President of the Board of Trade, dated 30 April 1996, the statutory instrument is designed to amend the Companies Act 1985 disclosure rules on directors' pay and pensions. Therefore, it does not simply remove so-called overlaps, but brings the requirements into line with the stock exchange listing rules—in other words, the requirements will be given full statutory backing, rather than the present self-regulatory backing of the stock exchange. The Government may talk of "overlap" or "underpin", but in reality they are putting on the statute book appropriate regulation dealing with directors' pay, pensions, share options and incentive schemes in line with the policies of the new Labour party.
The regulations apply to all companies, including listed companies, but the application of the rules will vary depending on whether the companies are listed, unlisted or small companies. In our view, however, the regulations

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are needlessly complex as they seek to separate out self-regulation through the stock exchange listing requirements and statutory regulation through the Companies Act. The Government have come up with an instrument which, first, seeks to maintain self-regulation and secondly, introduces statutory regulation. That is what comes of not having a clear mind.
Easing administrative burdens, raising disclosure thresholds, dropping many existing obligations on unlisted companies, cutting the costs of disclosure and striking the right balance are all favoured objectives of the Department of Trade and Industry, but they can lead to complex regulations that obfuscate rather than clarify where the Government wish to go. The danger—the unforeseen consequence—is that it might be more difficult for shareholders to scrutinise what company directors are doing.
One result of the regulations will be to raise the bar for companies listed on exchanges other than the London stock exchange, and we welcome that. They will now have more stringent disclosure requirements, as they are to be put on a par with the requirements of the London stock exchange. Building on the Greenbury recommendations, the aggregate gains of directors of publicly listed companies, from share option schemes and long-term incentive plans, will have to be disclosed. Those for the highest-paid director will be disclosed separately.
The stock exchange listing rules require that the gains of each director under any share option scheme operated by a listed company be disclosed. However, unlisted companies do not have to disclose gain from share options or the value of any shares that directors have received under long-term incentive plans. That is said to be because of the difficulty in valuing shares of unlisted companies, but as Lord Haskel pronounced in another place, the Government had no difficulty in estimating a value for London Underground, which is not a quoted company. The Government themselves are the biggest customers of the financial consultants who specialise in the work of valuation.
It would not seem to be particularly onerous to lay down a framework for the valuation of shares in unlisted companies. The value of shares in unquoted companies does not elude the Inland Revenue when it comes to calculating their value for the purpose of inheritance tax. I am glad to see the Minister for Small Business, Industry and Energy in his place. His presence raises a smile among us all on a very dull Monday evening; it is always a pleasure to have him with us. I repeat that the value of shares can be and is calculated by the Inland Revenue for the purpose of inheritance tax. Difficulties there may be, but insuperable they are not. If the Minister wishes to intervene, I shall gladly give way.
The Minister for Small Business, Industry and Energy (Mr. Richard Page): The hon. Gentleman might agree that the calculation of the value of privately owned companies is an art form, rather than a science.
Mr. Bell: I agree, but having been a trustee of an estate, I can say that the Inland Revenue has means of calculating such values, and succeeds in doing so.
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The unlisted company appears to have a further advantage. The current anonymous banded disclosure obligation is to be replaced by a simpler requirement to show a single figure—the aggregated emoluments paid to directors. At present, the salary of the highest-paid director must also be disclosed if aggregate emoluments exceed £60,000. That threshold will be raised to £100,000. The existing obligation to show the emoluments of the chairman separately if the chairman is not the highest-paid director is to be dropped, as is the requirement to show if any director has waived his emoluments.
Mr. Cousins: My hon. Friend, like me, represents a constituency in the north of England, where we have recently seen two of our major regional utility companies—Northumbrian Water and Northern Electric—taken over by foreign companies, one French and one American. They have now become subsidiaries of companies located outside Britain. Given that it is far from clear whether Northern Electric will continue to be listed, does he agree that the proposed changes in the regulations provide an incentive to de-list, which is wholly unhelpful to people in the north of England, who wish to know some of the proper details about the governance of companies such as Northern Electric? He will be aware that I have no hostility to American companies, which play a great part in our region.
Mr. Bell: My hon. Friend, who has major American-owned companies such as Procter and Gamble in his constituency, makes two valid points. The first concerned whether the regulations cover subsidiary companies in this country, and the second was that although the regulations extend the stock exchange listing requirements to other stock exchanges in this country, they do not extend them to exchanges outside this country. The globalisation of our markets is reflected in the stock exchange, in that new exchanges such as Nasdaq are not covered by the rules. The Minister may wish to address the matter of whether the regulations cover subsidiary companies when he replies, or at a later stage.
The paradoxical effect of the changes would be to reduce the available information about directors' remuneration in unlisted companies. The aspects of the regulations that cover unlisted companies are contrary to the rules of transparency and accountability which everyone in the City agrees are elements of good corporate governance.
A propos small and medium-sized enterprises, I note that the regulations provide yet another definition of a small company. A small company may be defined as one that meets two of the following criteria: a turnover of not more than £2.8 million; a balance sheet total of not more than £1.4 million; or not more than 50 employees. We welcome simplification and disclosure exemptions for small companies. Moreover, the Government have not, as before, accidentally bound themselves in more red tape.
The Minister spent a little time talking about pensions, and I shall do the same. The replacement of paragraph 7 of schedule 6 to the 1985 Act is designed to force disclosure of discretionary increases in directors' pensions in excess of what they would have been entitled to, on the basis of their contributions or the fund's performance. He also mentioned Sir Richard Greenbury; we have not spent much time in the debate discussing him or his study group

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on directors' remuneration, which published its recommendations on 17 July 1995. Sir Richard recommended that listed companies' remuneration committees should report each year to shareholders on behalf of the board, and that pension entitlements earned by each director during the year should be a part of that report.
According to the regulations, directors' pension benefits can be calculated on an accrued benefit basis. They also provide for the disclosure of sufficient information to calculate the capital value of directors' pensions if that information has not already been disclosed. Therefore, for listed companies, the current requirement to show aggregate pension contributions in respect of directors is to be altered. When the pension scheme is a defined contribution one, the company must show the number of directors covered by it, the aggregate contributions in respect of directors and the contribution for the highest-paid director. The Minister called that "underpinning".
The regulations' treatment of aggregation seems to be at odds with the stock exchange's listing rules. Moreover, there seems to be a logical defect at the regulations' heart. It is said to be too costly for companies to provide by name the amount of each element in the remuneration package of each director—although that is required by the stock exchange—and cheaper to aggregate than to provide figures for each director. However, as an aggregate can be arrived at only by adding together component parts—which must therefore be available and to hand—it is, if anything, more expensive to aggregate than to give legal force to the stock exchange requirements.
I have wandered down the byways of technicality, which is inevitable in so complicated an instrument. Moreover, the regulations deal with complex matters that may not be dealt with adequately on the Floor of the House. However, company pension schemes have massive tax advantages and privileges, which mean that the entire community contributes significantly to the private benefits that directors obtain through pension schemes. A significant slice of the £600 billion occupational pension scheme derives from the public purse because of tax exemptions. Therefore, there should be maximum transparency and accountability. Only time will tell—in the on-going debate on corporate governance and director and shareholder responsibility—whether the regulations meet those criteria.
At face value and on first examination, the regulations dealing with pension entitlement do not seem to be adequate. They fail to give full effect to the Greenbury recommendations on disclosure of the value of entitlements, and instead propose a simplistic statement on the amount of pension accrued yearly. There is also a danger that directors will be able to tuck away out of the sight of shareholders and employees—not to mention taxpayers—a huge part of their emoluments. As we shall see, in some cases, emoluments can amount to hundreds of thousands of pounds' worth of benefit.
The House is quiet today. In the run-up to a general election, it is good that most hon. Members are already out preparing for the dreaded day. However, Conservative Members who survive the electorate's relentless onslaught at the general election should not be surprised if a new Labour Government build on the regulations' legislative framework, on the basis of our commitments on corporate
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governance and of any recommendations produced by Sir Ronnie Hampel's review of the Greenbury and Cadbury recommendations.
Sir Ronnie Hampel is chairman of ICI, and he has agreed, on behalf of the Confederation of British Industry, to review the Greenbury and Cadbury recommendations. In the words of his brief, he is
"to ensure that the original purpose is being achieved, proposing amendments to and deletions from the Code as necessary."
The Hampel commission is expected to publish a draft report in July 1997, and a final report at the end of the year. However, for new Labour, the criterion will be enhancement of shareholder value in the framework of the stakeholder economy. The Hampel recommendations will be studied within that framework.
Our proposals are clear from our document "Vision for Growth", which was approved last autumn by party conference.
Mr. John M. Taylor: The hon. Gentleman has taken us into some very interesting territory—that new Labour, as he called it, will build on those controls. If indeed the Opposition want to go further—perhaps by implementing salary controls—now would be an absolutely ideal time to say so.
Mr. Bell: If I heard the Minister right, he is on about salary controls. He might explain to the House why there is such a vast difference in pay between directors of privatised utilities and those who work for them. He might also tell us why 160,000 people have lost their jobs in the privatised utilities since privatisation.
Mr. John Marshall: If the hon. Gentleman is talking about pay differentials and implying that some of them are unjust, is he saying that he would legislate on them?
Mr. Bell: The hon. Gentleman tempts me into byways that, in the interest of brevity, I had not planned on travelling. Why does not the Minister tell us what he thinks of water company directors and senior managers who, since privatisation, have awarded themselves £24 million in executive share options? Why does he not mention the payments to those on the boards of National Power, PowerGen and National Grid, who, in 1994, were given £5.3 million—more than eight times the £646,000 paid to the board of the Central Electricity Generating Board before privatisation? Those figures must astonish the hon. Member for Hendon, South (Mr. Marshall).
Mr. Marshall: Will the hon. Gentleman give a straight yes or no answer on whether he would legislate on those matters? If he would not legislate, why is he so willing to talk about them?
Mr. Bell: Talking about such matters on the Floor of the House is the essence of our parliamentary democracy. The regulations deal with aspects of corporate governance. Those aspects arise from the Greenbury recommendations, which were accepted by the former President of the Board of Trade, the current Deputy Prime Minister, who said that there would be legislation—which we are considering today. We are saying that we shall

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build on the regulations, based on the Hampel commission's recommendations and on the consultation that we have conducted in the City of London.
Therefore, the answer to the question asked by the hon. Member for Hendon, South is yes, a future Labour Government will build on the regulations, in the same terms as the regulations—[Interruption.] I can tell him that a Secretary of State in a new Labour Government will exercise the powers
"conferred on him"—
or her—
"by section 257 of the Companies Act 1985(a) and … all other powers enabling him"—
or her—
"in that behalf"
to lay regulations before Parliament. So I not only give the hon. Gentleman a commitment that we shall build on the regulations' provisions on corporate governance, but I have told him the means by which we shall do it.
The clear proposals in our document "Vision for Growth" deal with the role of independent non-executive directors and with shareholder democracy. In response to the hon. Member for Hendon, South, an incoming new Labour Government
"will also give shareholders a greater effective say over remuneration packages granted to executives by giving them a legal right to vote on remuneration packages at the annual general meeting prior to implementation, as well as the right to re-elect the remuneration committee."
The role of institutional shareholders should also be enhanced. Merely encouraging or requiring institutional investors to vote is not by itself enough. The key issue is one of transparency in voting behaviour. That is why new Labour would require institutional shareholders to draw up and publish a clear code of conduct for their voting policy and to make available disclosure of their voting records.
Mr. John M. Taylor: Would the hon. Gentleman go so far as to make voting compulsory?
Mr. Bell: We shall, of course, await the recommendations of the Hampel commission; the Minister may find his answer in those recommendations. We shall consult the commission, but any changes that we feel should be made will be made not by primary legislation but, as I have told the Minister, by delegated legislation.
The Minister touched on the next issue briefly; Baroness Miller of Hendon also touched on it in a debate on Friday in the other place. I refer to the reason why we had Greenbury in the first place, which was the so-called fat cat syndrome. There was anxiety in the public mind about the huge amounts being paid to top directors and top chairmen.
I have a friendly remark for hon. Members who may be absent tonight because they are on the hustings already. I refer briefly to a statement made last week in the Wirral, South by-election. One voter, Mr. Keith Howard of Bebbington, who is a newsagent, said in an interview in the Financial Times that he was disillusioned with the way in which the Tories had allowed fat cat utility bosses to make huge personal fortunes while small business men had to struggle to make a living. He said:
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"I voted Tory last time, but I am going to teach them a lesson in the by-election."
He added words that may be prophetic. He said:
"You never know, I might teach them a lesson in the General Election too."
The regulations are a very modest measure from a very modest Government. They are not in keeping with the changes in corporate governance, accountability and transparency for which the City of London is looking. To quote a little poem:
"Though the mills of God grind slowly, yet they grind exceeding small;
Though with patience He stands waiting, with exactness grinds He all."
On 2 May, this Government will be well and truly ground.
6.42 pm
Mr. Jim Cousins: This matter is important and significant. It is disappointing that there should be so few hon. Members here to debate such an important matter. We have created a great mass of individual shareholders. New shareholders have sometimes been created as a result of privatisations; others have come about as a result of changes in the funding of pension schemes or the introduction of personal equity plans.
Investors in such schemes now take their responsibilities extremely seriously. We have the clearest possible sign of a new era of shareholder activism in which shareholders, however small their individual investment, intend to be active on matters that affect the control and governance of the company and on significant issues that affect, for example, environmental matters.
On his deathbed, Goethe uttered the phrase, "More light!" There has always been some confusion about what Goethe meant. Was he referring to something ontic, profound and philosophical, or to something mundane relating to the circumstances in which he found himself on his deathbed? In terms of the regulations, the issue of more light is both philosophical and practical.
I take a great deal of heart and comfort from what my hon. Friend the Member for Middlesbrough (Mr. Bell) said about the issue. He has given a clear sign that he regards the changes being made tonight as a modest and conditional advance at best, as a retreat in some important ways and as a range of matters that we shall have to revisit when we have the advantage of the Hampel report later this year. I very much welcome and take heart from that.
There have been enormous payment abuses in some of our great companies and institutions. It was as a result of those scandals and the loss of public trust in the governance of those companies that the Greenbury committee met to deal with directors' pay. That move began in the financial markets themselves.
Some of the things that the Minister has said tonight are inexplicable. How can aggregation be simpler than giving individual explanations of directors' and company chairmen's emoluments when, to arrive at an aggregate, one must have available the details of individual pay and benefits? The aggregate is a sum total. How can it be said that it is simpler to provide the aggregate and not the individual amounts, when the aggregate is constructed out of information about the individual amounts?
Mr. John M. Taylor: I remind the hon. Gentleman that the regulations will become part of the general law

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of England, which means that they will apply to small companies and to large companies. Aggregates are much easier for small companies because the valuation of pensions and share prices in small companies is more difficult than it is in large companies where that information is available. If a company is a listed company, it will have to produce not merely the aggregate but the breakdown. That seems to be quite logical.
Mr. Cousins: My reply to the Minister is extremely simple. He draws a distinction between listed companies and unlisted companies. He seeks to lead the House towards the view that, if a company is not listed, it must be small, insignificant and trivial, and that it must involve a small group of family members or a small network of people, all of whom know each other's business and who are their own audience. That is simply not the case, as the Minister perfectly well knows.
Mr. Taylor: I am not attempting to delude anyone. Company law is quite clear. Within the Companies Act 1985, there is a definition of a small company and a medium company. Anything above that, the hon. Gentleman can choose to call a large company. There is a distinction between listed and unlisted companies. If he is asking me whether there is such a thing as an unlisted large company, I will tell him that there are such companies, but not very many.
Mr. Cousins: Those unlisted large companies include Vauxhall, Ford, Virgin and Eagle Star insurance. They are highly significant companies which have a great part to play in the affairs of our country. There is one significant feature about those unlisted companies. Some of the major ones are subsidiaries of companies that have their main financial and governance base outside this country.
Mr. John Marshall: Eagle Star insurance is a subsidiary of BAT Industries, which is a British-registered company. Does the hon. Gentleman accept that the vast majority of unregistered companies are very small—normally too small even to consider the alternative investment market?
Mr. Cousins: It is true that a great many unlisted companies are small companies, but I have drawn attention to an extremely important point: some substantial, important and influential companies are not listed. A practice is growing—one of the examples that I have given illustrates it precisely—of buying in shares in order to de-list. For whatever reason—I do not intend to explore the reasons in any individual case tonight—that practice is growing and it avoids the openness and the accountability that comes with meeting the stock exchange rules.
I attempted to raise this point earlier with my hon. Friend the Member for Middlesbrough, and I now put it directly to the Minister, who I hope will respond to it. We now have many more significant examples in the utilities sector of water and electricity companies being purchased by companies located outside Britain. I do not necessarily object to that; the practice is increasing owing to the competition for share value in the markets—it has a product and a result. The rules should allow disclosure of the emoluments of individual company directors in large companies that have their main governance home outside this country.
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It is now an almost weekly event for utility companies which were originally based in this country to have their corporate governance directed by companies located outside Britain. There are already some significant examples, including Vauxhall and Ford. The least that we should do is to ensure that companies whose corporate governance is in this country cannot evade disclosure by having their base outside the country and drawing upon the corporate governance practices of different regimes when establishing what they need to disclose. The Minister has said it himself: in some important respects, our practice of corporate governance disclosure is running ahead and setting a standard of practice for the rest of the world. That is not something to be ashamed of and go back on, but something to develop and exploit.
Mr. Marshall: The hon. Gentleman has referred to Ford and Vauxhall and has said that their UK executives should be subject to more stringent disclosure than their United States executives. He also said that disclosure in the UK is ahead of other countries. Does he seek to encourage motor car companies to locate in Britain by saying that their executives in this country will be subject to more rigid rules than in other countries? Is that designed to encourage overseas companies to come to this country?
Mr. Cousins: The hon. Gentleman's intervention significantly gives the game away. If it is the intention of the Government or any of their supporters to create two entirely different regimes of corporate governance with different standards of disclosure—one for companies based in this country and another for companies based abroad—an enormous perverse incentive has been created for the relocation of central company decision making in other foreign governance regimes. We should be seeking to establish a corporate governance regime that applies to all the major operators in the country and sets standards of practice here for the rest of the world to follow.
I think that I already have the answer to the question that I am putting to the Minister. I think that the Minister is happy for there to be major unlisted companies—located sometimes abroad, sometimes in this country—that will not have to follow the regime of disclosure that the House is discussing tonight.
Mr. Bell: Does my hon. Friend agree that the corporate governance in the US is more transparent than in our country? The other day, Michael Eisner of Disney had to answer to shareholders for his remuneration. Would it not be pleasant to see more of that in our own country?
Mr. Cousins: My hon. Friend is right. If any significant company in this country were exposed to the sort of shareholder activism practised by a major American pension fund such as the California state employees' pension fund, it would be horrified at the degree of accountability that is enforced there—not just through attendance at annual general meetings, but through constant and rigorous scrutiny of activities and developments. In many important ways, the California state pension scheme provides an example to the world of intelligent, well-directed, inspired shareholder activism. In many important ways, the draft regulations do not take us towards that objective, but rein us back. At best, they represent one cheer for shareholder democracy. As my

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hon. Friend the Member for Middlesbrough has said, when we have a new Government who understand the way in which the financial and share-owning markets of today work, we shall revisit the issues and shed more light on them.
6.56 pm
Mr. John M. Taylor: The hon. Member for Middlesbrough (Mr. Bell) said that the House was depleted in number tonight because some of his colleagues were already on the hustings. If so, they had better beware the Representation of the People Act 1983, lest they should have started incurring election expenses already—but that was a topic for the previous debate. As always, the hon. Gentleman was a generous debating opponent; it is always a pleasure to debate with him, even though we do not always find large measures of agreement. He was good enough to say that the subject was technical and that it might be necessary to come back to some of the issues later—and I do not mean on the Floor of the House. If any of my colleagues who have followed the debate, from either side of the House, feel that I do not address all the technical issues in my winding-up speech, they should feel free to write to me. I promise to address the points that they raise.
The hon. Member for Middlesbrough seemed to have doubts about offering different treatment for listed, unlisted and the smallest companies. It is natural to provide different treatment for those companies because they are different. It is right that a higher level of disclosure should be called for from listed companies than from unlisted companies.
I shall try to deal with the argument advanced by the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) as directly as possible. He postulated the theory—in fact, he did not merely postulate it as we know that it already happens—of a utility that is privatised, or floated, and subsequently taken over by an overseas company. In such a case, full information relating to the remuneration, shares and share options of directors of the utility at the time of the takeover bid will be published in accordance with the rules of the takeover panel.
After the takeover, if it happens, the utility is likely to become a wholly owned subsidiary of the overseas parent. It will be subject to the same rules as any other unlisted UK company—it must disclose the emoluments of the directors in aggregate and, if the aggregate figure exceeds £200,000, the emoluments of the highest-paid director. If any directors lose office as a result of the takeover, the accounts must show the aggregate amount of any compensation paid, including the money value of any non-cash benefits.
After the takeover, it is unlikely that the directors of the utility will hold share options in the utility as all the shares are likely to have been acquired by the parent company as part of the takeover process. In other words, the subsidiary would be reduced to having one shareholder. Greenbury is about disclosure of information about directors to shareholders, and the single shareholder will know all about the directors because it will own the subsidiary for which they work—indeed, it will almost certainly set their terms of employment. The remuneration of the directors of the utility following the takeover,
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including any special features which could conceivably extend to share options in the parent, will be a matter for the parent company as sole shareholder. The directors of the subsidiary will of course no longer have the ability to determine their own remuneration. The parent company will have full access to relevant information, without needing to rely on statutory disclosures.
The hon. Member for Middlesbrough said that, as a trustee—presumably of an estate or settlement; I know not what and it is not my business—he found that the Inland Revenue had been swift to seek a valuation of unlisted shares in certain circumstances, such as a sale or disposal for capital taxes. In the event of a disposal, a valuation is required; that is almost certainly a proper part of revenue law, but it is quite another matter to require the value of those shares to be calculated every year for accounts purposes. That would be expensive for unlisted companies and we are not in the business of making life more difficult for unlisted companies. The hon. Gentleman might also want to reflect on the fact that changes to company law requiring shareholders to vote or to declare their voting record will require primary legislation.
I am under injunction from the silent ones to move on—I know their authority in this place and there will be no second-guessing from me. In conclusion, I simply want to say that I am no supporter of fat cats; I have no appetite for such matters and the Prime Minister has declared similar sentiments. Whereas we are well up with the European average—in fact, we are roughly typical of the European average—for executive pay, we are well below the levels seen in the United States of America.
The hon. Member for Middlesbrough says that he will build on Hampel, but it is we who will be watching the developments on Hampel. As another successful exercise following the comparable successes of Cadbury and Greenbury, we shall be here to deal with them as we are doing tonight.
Question put and agreed to.
Resolved,
That the draft Company Accounts (Disclosure of Directors' Emoluments) Regulations 1997, which were laid before this House on 6th February, be approved.

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

SOCIAL SECURITY
That the draft Jobseeker's Allowance (Workskill Courses) Pilot Regulations 1997, which were laid before this House on 28th January, be approved.
That the draft Jobseeker's Allowance (Project Work Pilot Scheme) Regulations 1997, which were laid before this House on 5th February, be approved.
That the draft Jobseeker's Allowance (Project Work Pilot Scheme) (No. 2) Regulations 1997, which were laid before this House on 5th February, be approved.
That the draft Jobseeker's Allowance (Contract for Work) Regulations 1997, which were laid before this House on 13th February, be approved.
That the draft Social Security (Jobseeker's Allowance and Mariners' Benefits) (Miscellaneous Amendments) Regulations 1997, which were laid before this House on 17th February, be approved.

CONTRACTING OUT
That the draft Contracting Out (Functions of the Registrar General in relation to authorising re-registration of births) Order 1997, which was laid before this House on 11th February, be approved.

RATING AND VALUATION
That the draft British Gas plc. (Rateable Values) (Scotland) Amendment Order 1997, which was laid before this House on 11th February, be approved.
That the draft Non-Domestic Rating (Chargeable Amounts for Small Hereditaments) Amendment Regulations 1997, which were laid before this House on 12th February, be approved.
That the draft British Gas plc (Rateable Values) (Amendment) Order 1997, which was laid before this House on 12th February, be approved.

AGRICULTURE
That the draft Farm Woodland (Amendment) Scheme 1997. which was laid before this House on 12th February, be approved.
That the draft Farm Woodland Premium Scheme 1997, which was laid before this House on 12th February, be approved.

NORTHERN IRELAND
That the draft Education (No. 2) (Northern Ireland) Order 1996, which was laid before this House on 3rd December, be approved.—[Mr. Carrington.]
Question agreed to.

PETITIONS

  Child Pornography
  7.3 pm
  Mrs. Anne Campbell: I am pleased to present this petition on behalf of the members of the Cambridge Student Methodist Society and the Action for Children Campaign and other citizens of the United Kingdom. They have collected 1,000 signatures, including Mr. Graham St. John-Willey of the Action for Children Campaign, Chris Marsh of Queens' college, Cambridge, and Kim Jensen of Newnham college, Cambridge. The petition states:
  To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
  The Humble Petition of Members of Cambridge Student Methodist Society with Action for Children Campaign and other Citizens of the United Kingdom,
  Sheweth
  That we, the undersigned, hereby:

  1. express our deep concern at continuing reports that citizens of developed nations travelling abroad may be encouraging the use of children in prostitution and pornography;

  2. affirm our commitment to the principles of the United Nations Convention on the Rights of the Child which seeks to protect children from sexual exploitation; and

  3. call upon Her Majesty's Government to seek to play an active role in bringing about concerted international action to tackle this problem and in particular to examine ways of ensuring that individuals involved in such exploitation are brought to justice within the United Kingdom.

  Wherefore your Petitioners pray that your honourable House do introduce legislation to ensure that citizens of the United Kingdom who commit serious sexual offences against children abroad can be prosecuted in this country.
  And your Petitioners, as in duty bound, will ever pray, etc.
  To lie upon the Table.

  Doorstep Milk Delivery Service
  7.4 pm
  Dr. Gavin Strang: I rise to present a petition in support of the United Kingdom doorstep milk delivery service. The petition states:
  To the House of Commons.
  The Petition of Citizens of the United Kingdom,
  Declares that
  The UK doorstep milk delivery service is part of the fabric of our community. It provides a unique service to consumers, a valuable community contact and employment for many thousands of people; It is important that consumers retain the opportunity to choose to have milk and other foodstuffs delivered to their door by the doorstep delivery service; The milk-round provides an important social service, calling direct to people's doors and providing vital contact for those who have difficulty in leaving their home; It is important that a thriving doorstep delivery service is maintained, for the benefit of the whole community.
  The Petitioners therefore request that the House of Commons take steps to help ensure the continuance of our doorstep delivery service.
  And the Petitioners remain, etc.
  To lie upon the Table.

  Cyprus
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Carrington.]
  7.6 pm
  Mr. John Marshall: One of the difficulties with arranging Adjournment debates is that, normally, they start at 10 pm or just after and one prepares for the day accordingly. This evening, there is an annual meeting in one of the wards in my association and when I knew that I had been drawn for tonight's Adjournment debate I cheerfully hoped that, without difficulty, I would be standing and addressing the people of the Child's Hill ward at 8 o'clock this evening. However, by Thursday, I had discovered that there was no prospect of my being able to do so. Little did I believe, however, that I would be speaking at six minutes past 7 o'clock.
  This is not the first time that I have taken part in an Adjournment debate on Cyprus. Indeed, the last time my hon. Friend the Member for Edmonton (Dr. Twinn) and I spoke on this subject, the mayor in exile from Famagusta and his deputy were both in the Strangers Gallery and one of our colleagues was not exactly commended by the Chair for pointing out that fact. This evening, we can commend the mayor in exile from Famagusta for his patience and courage in fighting the events since 1974 and for his determination that his people will eventually be rehoused in their own homes.
  I have instituted several Adjournment debates on Cyprus. I feel rather like one of Elizabeth Taylor's former husbands, who said that he knew what to do, but did not know how to make it interesting. I first visited Cyprus in 1977. At that stage, I was struck by the cruelty that had deprived more than 100,000 Cypriots of their own homes. I was struck by the tragedy that had meant that families were prevented from living in the homes that had been in their families for generations. I was appalled by the harsh reality that individuals could see their own homes, be it in Famagusta or Nicosia, but not have the opportunity to live in them. I was also impressed by the resilience of the economy and the speed with which the tourism industry had recovered from the events of 1974.
  I remember three events especially. In 1979, when I was in Cyprus, I was entertained to a mezze in Charlie's bar in Nicosia, and the man who was giving the lunch said that he had been obliged to flee from the Turks in 1974. His whole family had fled, but his father had taken slightly longer than the rest because he wanted to flee with the title deeds to his home. I remember his words: "And a lot of good it did him, because he has died without the opportunity to go home."
  I remember on another occasion standing on the green line in Nicosia and looking over to Turkish-occupied Nicosia. I saw a shop there—a tailor's shop. There was the tailor's dummy, as it had been in 1974. There was cloth in the window—affected a bit by the sun, but there it was, as it had been in 1974, so sudden had been the retreat. People had retreated at the speed of lightning to preserve their lives.
  I shall also remember attending, in 1995, with my hon. Friend the Member for Edmonton and the hon. Members for Knowsley, South (Mr. O'Hara) and for Tooting (Mr. Cox), the annual event outside Famagusta where thousands of citizens of free Famagusta demonstrate
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  against the fact that they are unable to live in their homes. As we walked together towards the Austrian colonel, we could see the lights in Famagusta. On the left, the lights were all on; to the right there was complete darkness. That darkness was what had been Varosha, the kernel of the Cypriot tourist industry until 1974, now deserted.
  As that demonstration of thousands of people looked towards Famagusta, some individuals could see lights on in their family homes, which they had left in 1974, and they knew that those lights were not lights that had been left on in 1974, but lights that had been put on that evening in 1995 by a Turkish settler or perhaps by Turkish troops. They knew that many of those homes were occupied by squatters.
  What would your emotions be, Madam Deputy Speaker, if you were to move towards your constituency in Plymouth tomorrow morning and see lights on in your home and know that it had been occupied by someone and you were not allowed to live there, or even to go into that street? You would be full of distress. So it must be for someone who, for more than 20 years, has known that their home has been occupied by another family but has had no right to go there.
  The world condemns ethnic cleansing—with all its associations with the evil regimes of the 1930s and the early 1940s—wherever it takes place. I remember my father saying, "Apartheid is wrong because we are all God's children." Cypriots are all God's children, and they deserve better of this world.
  There are those in Foreign Offices worldwide who are concerned with realpolitik, and they recognise the impact that the Cyprus problem can have on the European Union and the North Atlantic Treaty Organisation. Cyprus has had a long-standing desire to enter a closer relationship with Europe. I remember being told that in 1979. The European Union has a long-standing commitment to start negotiations within six months of the end of the intergovernmental conference, but some are now asking, "With whom should the European Union negotiate?"
  I believe that the European Union can negotiate with only one group—the legitimate Government of Cyprus. Others have said that a divided Cyprus cannot join the European Union—despite the precedent that the European Community was created with a divided Germany. More important, those who argue that a divided Cyprus cannot join the European Union are in effect saying that Turkey has a right of veto over Cyprus's application to join the European Union.
  If we grant to Turkey the right of veto over Cyprus's application to join, we cannot be surprised if there is a tit-for-tat reaction by Greece—would any Greek Government survive if they saw Turkey vetoing Cyprus's application? Turkey is not even a member of the European Union. Would any Greek Government survive if they did not react similarly to the applications by Poland, Hungary and the Czech lands? As one who wishes the European Union to expand to Cyprus and those democracies, I say it is wrong to suggest that anyone should have a right of veto over whether the legitimate Government of Cyprus and the people of Cyprus join the European Union.
  To say that, in the absence of a settlement, there will be no accession of Cyprus to the European Union provides an inducement to those in the north not to settle. There is no evidence that Turkey wants Cyprus to join, and Turkey should not be presented with a lever to prevent Cyprus from joining the European Union.

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  There should be no link between a settlement of the Cyprus problem and Cyprus's application to join the European Union. We should recognise the fact that Cyprus qualifies for membership because of its democratic credentials, economic philosophy and financial prudence. Indeed, if Cyprus were in the European Union today, it, Luxembourg and the United Kingdom would be about the only countries to fulfil the Maastricht financial criteria. Perhaps, according to those criteria, Cyprus might almost be regarded as too sound to join the European Union.
  The division of the island since 1974 has been a tragedy, especially for those in the north. The beaches of the north were once the most hospitable in Europe, but they have been deserted by western European tourists since 1974. The hotels of Varosha have been destroyed and, instead of being a haven for tourists, have become a home for stray dogs and rats. The north-south divide has been accentuated in Cyprus; incomes in the north have been depressed, whereas the south has prospered due to the resilience of the economy, the tourism industry and the hard work of everyone who works there.
  In northern Cyprus, the population has been transformed. There are 30,000 troops in northern Cyprus today, and that—as befits me—is a conservative estimate. Other estimates suggest 35,000 or more. We should remember that we have never had more than 15,000 troops in Northern Ireland, facing the might of the IRA. There are twice as many troops in northern Cyprus as we have ever deemed it necessary to station in Northern Ireland. As Keith Kyle has recently pointed out, there were 104,000 Turkish Cypriots in northern Cyprus in 1960. Today, there are 198,215. Bearing in mind the fact that some people have left northern Cyprus, that means that more than half its population consists of settlers from Anatolia, instead of native Greek Cypriots.
  One of the tragedies of the ethnic cleansing of 1974 lies in the fact that a whole generation of Cypriots has been denied the chance to mingle with each other. Rauf Denktash and Glafcos Clerides, the two leaders of their respective communities—the latter, the President of Cyprus who volunteered for the RAF in the second world war—were contemporaries who knew each other as young men. The tragedy today is that young Turkish Cypriots and Greek Cypriots cannot play football together or go to the cinema or even drink coffee together. Instead, they have to come to London if they want to meet one another.
  Another tragedy is the group of enclave people in Northern Cyprus—the small number of Greek Cypriots who said, "This is our home; this is where we were brought up; this is where we want to live." That may be so, but it is also where they have suffered. No one should be pushed around or punished for wanting to stay in the village where his family has lived for generations. I know that the late Lord Finsberg went to see the enclave people on behalf of the Council of Europe and was shocked by the treatment meted out to them.

  The legacy of 1974 has been especially cruel to the relatives of missing persons. I have only once spoken on the same political platform as the right hon. Member for Chesterfield (Mr. Benn), but he and I, my hon. Friend the Member for Edmonton and the hon. Members for Knowsley, South and for Hornsey and Wood Green (Mrs. Roche) all spoke in Trafalgar square at the annual rally against the continuing occupation of Cyprus by Turkish troops. It was very moving to see mothers
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  showing pictures of their sons taken in 1974, wives showing pictures of their husbands and children showing pictures of their parents. They still do not know, 23 years on, what has happened to their loved ones. It is surely wrong that these people, many of them in the evening of their lives, should still be in that position.
  There has been much discussion of the Cypriot Government's decision to buy 20 Russian S300 ground-to-air missiles. We must acknowledge that Cyprus is one of the most heavily militarised islands in the world. Why are there 35,000 Turkish troops in the north? Are they there to intimidate the local population? If so, they should not be there. If not, their purpose is purely aggressive.
  Cyprus is only a few minutes' flying time from Turkey. Every country needs to be able to defend itself. We do of course regret the perceived need for the missiles, but we must all defend the right of the Government of Cyprus to self-defence. We can understand why the missiles have been ordered, and we must hope that the attempts to create peace will come to fruition before those missiles are fired.
  Since I last spoke on this subject in the House, there has been a great deal of activity. The Foreign Secretary has been to Cyprus. I am sure that we all welcome the fact of his visit, and the fact that he said that there should be no right of partition or secession under a Cypriot agreement. Sir David Hannay has been busy; Ambassador Muratov of Russia has said that there will be a meeting of the permanent members of the Security Council in mid-March to discuss Cyprus; and Madeleine Albright, the United States Secretary of State, has also made it clear that she wants a settlement to this tragic problem. If the chances of success are related to the amount of diplomatic activity going on, those chances are much better now than they have been for a very long time.
  This has been called the year of Cyprus. There must certainly be hope—23 years is far too long to wait. Many have died without the chance to see their homes again. Many still do not know the fate of their loved ones, and many have been unable to visit family graves for 23 years. Whole generations have grown up as citizens of a divided island. No Cypriot under the age of 30 can remember talking to his Greek or Turkish counterpart. The wait has been too long.
  The people of Cyprus should not despair. Her friends in this House will continue to ensure that the problem receives the oxygen of publicity. Who in 1974 would have forecast that the Berlin wall would be knocked down? Who then would have guessed that Israel and King Hussein would sign a treaty of peace? Who in 1974 would have guessed that Nelson Mandela and the leaders of the National party in South Africa would be part, at least for a short time, of the same Government? It is said that God works in a mysterious way his miracles to perform. May 1997 be the year of miracles; may those miracles begin in Cyprus long before 1 May.
  7.26 pm
  Dr. Ian Twinn: I congratulate my hon. Friend the Member for Hendon, South (Mr. Marshall) on raising this subject on the Adjournment. We had expected to find ourselves sitting here for half an hour at the end of the day listening to him with the Minister nodding in agreement, so this is a wonderful chance for us to have our say. It was typical of my hon. Friend to rise from his sick bed to set out the hopes and fears of the Cypriot people so clearly.

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  A great deal is said about Cyprus's past, about the divisions, the human rights problem, and the security problems for both communities—not to mention the missiles. In the end, however, there is only one objective to consider: the possibility of a just and lasting solution that will allow both communities on the island to live together in peace. The message with which we must concern ourselves is a simple one, but the path to that simple solution is a minefield, as the Labour Front-Bench spokesman recently discovered to his cost recently—when he suggested a rotating presidency, he found other things rotating rather quickly above his head.
  We cannot allow ourselves the colonial luxury of dictating a solution to Cyprus: any solution must come from the hearts and souls of the people of both communities, who all want a solution and a prosperous island in which all can live together peaceably. It is not for us to dictate policy or to argue the details of Cyprus's history. There are two sides to all the arguments over that history since independence, and over Turkey's history.
  In all fairness, both communities have good points to make about why better security arrangements are needed in Cyprus once we have a solution. Both communities have severe worries about what has happened in the past, especially in terms of security. Turkish Cypriots rightly think back to what happened in the early 1960s—for many of them 1963 was a year of horrors. Similarly, the coup, the invasion, the occupation and then the division of Cyprus in 1974 are a cause of nightmares for whole families of Greek Cypriots. There have been serious human rights violations in Cyprus, which need to be dealt with by the international community as well as by both Cypriot communities.
  I have no doubt that the solution to the Cypriot problem is the one to which Mr. Denktash, President Clerides and other Cypriot leaders have agreed—a bi-zonal, bi-communal, federal solution for the whole of Cyprus, with one Government but with administrations that look after the interests of the two communities. It is not for the House of Commons to say what those arrangements should be, but it is for us to take action. That action should be taken in 1997 to bring about those solutions. After all, we are a guarantor power and it will for ever be a blot on our international reputation that we took no action in 1974-we allowed Turkey to respond to the Greek military coup and we all know what followed while Great Britain sat back with its troops on the island—in Britain's as well as Cyprus's interests, and in the interest of British and world peace.
  We have no right to sit back and do nothing now, and I am glad that that view is shared by my right hon. Friend the Prime Minister, by my right hon. and learned Friend the Foreign Secretary and by the Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for Boothferry (Mr. Davis), who is taking such an active role in seeking a solution.
  As my hon. Friend the Member for Hendon, South said, action has already been taken. The Foreign Secretary has visited Cyprus for the first time since independence. He also spoke to the Cypriot community in London this week at a meeting of Conservative Friends for Cyprus, with more than 20 hon. Members and parliamentary candidates throughout the country, demonstrating our interest in ensuring that we get a just and lasting solution.
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  This is not a party political issue. The deputy leader of the Labour party addressed a similar meeting in London and we give him due credit for that. To balance our Conservative Friends for Cyprus, the Labour party has the National Committee for Cyprus, run by the hon. Member for Mansfield (Mr. Meale). The House has an all-party group of which the hon. Member for Knowsley, South (Mr. O'Hara) is an active member, as are the hon. Members for Tooting (Mr. Cox) and for Hornsey and Wood Green (Mrs. Roche). We are an active group and we try to find ways of using the powers and authority of this House to move the argument forward. We do that in conjunction with the Cypriot community, to which we are grateful for keeping us briefed.
  It is interesting to note how the political parties of Cyprus, which are all represented formally in this country with their own branches and organisations, work together across the political divide. We have as much in common with AKEL, the Cypriot communist party, EDEK, the socialist party, the Democratic party of Mr. Kyprianou, and the Democratic Rally party of President Clerides. We work together to ensure that the voice of Cyprus—the voice for justice, human rights and the interests of all Cypriots, whether Greek or Turkish—is heard. We pay great tribute to those in the Cypriot community who have tirelessly sought to attract the attention of hon. Members of this House and of the other place to put that case forward.
  After 23 years, however, Cyprus is still divided. In truth, we have not made much progress. The outlines of a federal solution were agreed between the two communities many years ago but we still face the prospect of a divided island. It is a scar across Europe: a European country with two allies as fellow guarantor powers—Turkey and Greece—who cannot agree with each other, with us or with the people of Cyprus about how to proceed.
  It may seem strange for some hon. Members to hear those such as me extolling the virtues of the European Union to resolve the problem, but I believe that a secure future for Cyprus lies within the European Union. That is one reason why my hon. Friend the Member for Hendon, South and I are keen to support the concept of the European Union. We want a wider European Union encompassing all the people of Europe so that we can live together in peace and help each other with our problems. We have a duty to help Cyprus, and to help it to become part of the European Union.
  My hon. Friend has already outlined our concerns about whether Turkey should be allowed a veto. Of course it should not be allowed a veto on who joins an organisation of which it is not a member. We all know that it would he infinitely preferable, in the words of my right hon. and learned Friend the Foreign Secretary, if we had a united Cyprus by the time Cyprus joins the European Union. It would be in Europe's interests and those of both communities. It would be particularly in the interests of Turkish Cypriots, because the economic and security advantages that could be put in place by that solution would boost their living standards and sense of security.
  Before I sit down, may I make a plea to my right hon. Friend the Minister of State? While we are proud of what the British Government are doing, and are keen that our voice should be heard in Europe and that our European partners should support our objective for Cyprus, we also realise that this is a world problem, which could ruin

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  world peace. Cyprus is part of Europe; it is in the Mediterranean, but it is also close to Africa and the middle east. We do not want security problems in that region. It is in nobody's interest, least of all that of the United States. We understand the close relationship between Turkey and the United States. Over the years, they have worked together for peace in many ways.
  None of those of us who make the case for Cyprus is anti-Turkish. We regard Turkey as a valued ally within NATO. That is the route that we should go down. However, we need to ask our friends in the United States to increase their influence on Turkey, to raise Turkey's place on their agenda from the lower end of their top 10 world problems to the top, so that America tells Turkey that there will be a solution and says that it will put its full weight behind achieving a solution in 1997. That is the sort of action that we expect from the House of Commons and which our friends across the water in the United States also want. I hope that we can all work together so that by the end of 1997 we can feel more confident about peace in the Mediterranean.
  7.37 pm
  Mr. Edward O'Hara: I welcome the opportunity to say a few words in this debate. Having noted it in my diary, I expected merely to come along and support the hon. Member for Hendon, South (Mr. Marshall), whom I congratulate on securing this debate on the important topic of Cyprus and on his admirable resume of the different aspects of the problem.
  I endorse the hon. Gentleman's remarks about Famagusta, which has poignant memories for me. In the past I secured a debate on the subject of Famagusta, which is a tragic waste of what should be the jewel of the Mediterranean. The town could be a test-bed for a solution and for demonstrating that Greek and Turkish Cypriots could learn to live again in harmony. I also agree with the hon. Gentleman about the missing people. He will recall that last year I promulgated a private Member's Bill suggesting that a commission of inquiry should be set up to delve into the fate of the missing people. It is heartbreaking to see, at any demonstration of Greek Cypriots that one attends, those aging ladies clutching to their breasts photographs of their loved ones as they were in 1974. In all human decency they should be allowed before they die to know the fate of their loved ones. That is all that they demand.
  I endorse the remarks of the hon. Member for Hendon, South about the enclaves. I would add that when young Greek Cypriots in the enclaved areas finish primary school, they have to leave the area to pursue secondary and further education and they are not allowed back. That is a violation of human rights and as good an instrument of ethnic cleansing as one will ever get.
  I agree with many of the remarks made by the hon. Member for Edmonton (Dr. Twinn). We are members of different political parties, but he is right that Cyprus is not a party political issue among us: as he said, we work together across the parties in the House and with all the political parties of Cyprus. We are not conscious of political affiliation when we address the problem.
  I agree with the hon. Member for Edmonton also when he says that we should not dictate to the Cypriots how they should come to a solution, but as a guarantor power we have an enormous legal and moral responsibility to do
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  all that we can to secure a situation in which the two sides can reach an agreed, just and lasting solution to the Cyprus problem.
  I have been concerned about the torrent of literature that I have received in the mail recently from various organisations identifying with the Turkish and Turkish Cypriot cause, all of which looks back with hatred and anger to the position 30 years ago—a generation even before the invasion of 1974. That distresses me because it helps no one. We should say to all the Cypriots—Greek Cypriots and Turkish Cypriots—that we should look not backward in anger, but forward with hope of a future together in prosperity for all Cypriots.
  There is a danger in the present situation. There were three awful murders on the dividing line in the summer of 1996, when an unarmed Greek Cypriot, Tassos Isaak, crossed the barbed wire, as has been done many times, to demonstrate his demand to return to his rightful homeland and was beaten to death by people wearing Turkish Cypriot uniform. Indeed, I am told that he was beaten so violently about the head with iron bars that his eyes popped out of their sockets. That gruesome murder was recorded on television.
  The next week, in demonstrations following the funeral of that unfortunate young man, a relative of his, Solomos Solomou, climbed a flagpole from which a Turkish flag was flying. Perhaps he should not have been doing that, but it was a peaceful demonstration. Again, recorded on videotape and seen throughout the world, a person in Turkish uniform could be seen taking careful aim and shooting him—not in the knee, elbow or ankle to bring him down from the flagpole which he had climbed only to the height of a few feet, but in the head. As he lay on the ground clutching his head, one could see more shots being fired at his head. Soon afterwards there was a third case of a person being shot, but I will not give the gruesome detail of that.
  I have given those awful details because they illustrate the fact that the present situation is fraught with the danger of even more bloodshed than there was in the 1960s or in 1974.
  The House should never forget the legitimacy of the Turkish invasion of 1974, and the illegitimacy of the Turks' continued stay, occupying northern Cyprus. In 1974 there was an attempted coup d'état against the lawful Government of Cyprus, supported by the Greek military junta. The junta fell as a result of its action in fomenting the coup. The attempted coup lasted several days and, after it failed, the lawful Government were restored.
  Under the treaty of guarantee, the Turkish Government had the right to intervene to restore the status quo, but once the status quo was restored the Turkish army did not have the right to stay. It is well to have it established once again on record in the House that the continued occupation of northern Cyprus by the Turkish army is therefore illegitimate.
  The most important step that could be taken towards a speedy solution of the Cyprus problem is the demilitarisation of the island. One recognises that one could not tell Turkey to take its 35,000 troops away immediately, but a scaling down could begin immediately. President Clerides has made the offer to demilitarise on the southern side of the island, in return for

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  demilitarisation in the north, and to support the costs of an international peacekeeping force with no ethnic Greek or Turkish troops on the island.
  Demilitarisation is urgently needed. We have seen the consequence of the S300, to which the hon. Member for Hendon, South referred. While there is an excess of armaments on Cyprus, the potential for armed conflict will continue to exist.
  As the hon. Member for Edmonton implied, when we speak of human rights in Cyprus, we are not talking only about the human rights of Greek Cypriots, although of course they are at stake; we are talking of the human rights of Turkish Cypriots, too, and of Maronites—the human rights of all lawful citizens of the Republic of Cyprus. When we speak of the interests of the Cypriots in the context of entry into the EU, we are not talking of the interests of Greek Cypriots alone. We are speaking even more of the interests of Turkish Cypriots, because their economy has suffered grievously since 1974.
  Finally, I echo the concluding remarks of the hon. Member for Edmonton when he referred to the need for peace and stability in the Mediterranean. I remind the House also that although the Cyprus issue is separate, it cannot be disconnected from the issue of relations between Greece and Turkey in the Aegean. There is an extremely volatile situation there between two members of NATO which daily carries the risk of armed conflict, and an escalation of that conflict does not bear thinking about. That situation in the Aegean will never be resolved until the situation in Cyprus is resolved. Like all hon. Members, I hope that, with the renewed interest and activity in Cyprus, the year 1997 will be the year of Cyprus, when we achieve a just and lasting solution that brings prosperity to all in Cyprus.
  7.49 pm
  The Minister of State, Foreign and Commonwealth Office (Mr. David Davis): I thank my hon. Friend the Member for Hendon, South (Mr. Marshall) for giving us the opportunity to discuss events in Cyprus once again, and I congratulate him on his eloquent contribution this evening. I hope that the people of Child's Hill ward will forgive my hon. Friend's absence: we are grateful to them for allowing him to be here this evening. I understand that he has also lifted up his bed and walked in order to attend, so we are doubly grateful for his presence.
  Many of the subjects mentioned tonight have been covered in previous speeches in the House. I have responded to them, and all my answers given at the Dispatch Box stand. I shall not repeat them tonight. My hon. Friend mentioned the need to make debates and speeches on the same issue exciting. I shall not endeavour to be as exciting as any husband of Elizabeth Taylor—
  Mr. John Marshall: But more successful.
  Mr. Davis: I shall aim at least for greater longevity.
  I shall try to be measured in my response, as I believe that that is the most constructive contribution that I can make to both the debate and the Cyprus question in future.
  We last debated the subject shortly before my right hon. and learned Friend the Foreign Secretary visited the island in mid-December. During that debate, I said that, if 1996
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  could be described as a year of danger, 1997 might be seen as a year of opportunity: time for a serious effort to settle the Cyprus problem. We had some cause for encouragement: both President Clerides and Mr. Denktash told the Foreign Secretary in Cyprus that they, too, viewed 1997 as an important year. Mr. Denktash said publicly that he believed that a settlement could be achieved with give and take on both sides.
  For all that, 1997 has not yet brought much cheer to those who want to see a settlement in Cyprus. The first two months have been difficult. I shall devote most of my remarks this evening to developments during that period, and to the conclusion that I believe that we should draw from them: this is a time neither for bright optimism nor for deep gloom but, as my hon. Friend the Member for Edmonton (Dr. Twinn) said, for action.
  In the first week of this year, the Government of Cyprus announced their plan to buy a Russian surface-to-air missile system, to which several hon. Members have referred. The quick reaction from the Turkish side was both threatening and bellicose. Neither move has helped to promote a climate congenial to progress on a settlement. Rather than intensifying it, the result has been to divert energy and attention from the serious efforts needed to achieve a settlement. It has no doubt also given great encouragement to those in both communities who want to derail those efforts.
  There has been much talk about the defensive nature of weapons and the right of states to defend themselves. I do not question that right. However, I do seriously question whether this missile purchase was the right decision at this time of some opportunity in Cyprus—especially when the United Nations Security Council has again underlined its concern about the excessive levels of military forces and armaments in Cyprus.
  After that unpromising start to 1997, can things get better? I believe they can, but only with readiness on both sides to stop looking for excuses and start looking for solutions. I do not think that anyone doubts the determination that the United Nations, the United Kingdom, the United States—to which my hon. Friend the Member for Edmonton referred—the European Union and others have shown in recent months in a methodical and concerted effort in support of a settlement. They have worked to build a basis of understanding on which the leaders of the two communities can engage. However, it is that engagement that will count in the end: no matter how committed our supporting efforts and encouragement, only the parties themselves can make the decisions that will underpin a comprehensive political settlement.
  For that reason, I hope that, in the crucial months ahead, both leaders will engage seriously and positively with the United Nations Secretary-General's special representative and all those who visit Cyprus to support his mission. I hope that both leaders will focus with determination on how to move quickly to face-to-face negotiations, and beyond that to the goal of a comprehensive agreement.
  What are the prospects of success? I mentioned the visit to Cyprus in December by my right hon. and learned Friend the Foreign Secretary. He had detailed talks with both leaders, and set out in his press conference afterwards a list of 10 points that he believed constituted the best basis for making progress. The points draw on

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  positions established over many years of efforts to achieve a settlement, and I believe that they reflect a significant degree of common ground in setting out the general shape of an acceptable settlement.
  However, neither side yet has a clear route map of how it will move towards that settlement. The international community—the United Nations, supported by the United Kingdom, the United States, the European Union and others—has a crucial role to play in helping to draw that map. However, in the end, it will be up to the Cypriots whether they wish to use it. Should they choose to do so, we are under no illusions: difficult choices and compromises lie ahead for both sides in a number of areas. For example, how will a bi-zonal, bi-communal federation look in practice? How should political equality be expressed in the new constitution? How will the powers of the two zones be defined? What powers should the presidency be given? What arrangements should be made for those who became refugees in 1974? Fundamentally, what security arrangements will there be to underpin a settlement?
  We can put the questions, and we may even suggest some answers, but the Cypriots are the only people who can provide those answers. Security is a case in point. In his 10 points, my right hon. and learned Friend said:
  "the security of each of the two communities and of the settlement as a whole will be achieved by means of international guarantees and by such measures of international collective security as may be agreed by the parties."
  As ever in Cyprus, the statement has been construed in some quarters as calling for the dilution of the 1960 treaty of guarantee; in others, it has been described as unqualified support for it. The statement actually reflects the simple fact that a settlement will need to be based on security arrangements with which both sides can be comfortable. Beyond that, it reflects implicitly that the present situation provides no real, lasting security. At best, it provides a short-term and inadequate comfort blanket, wherein each community's security is obtained at the cost of the insecurity of the other community.
  By way of conclusion, I mention once again the European dimension. I make no apologies for retreading ground that we have covered in previous debates. It is important that the issues are clearly understood. The European Union factor is a comparatively new and positive development. It offers a real opportunity, but how can that opportunity best be taken?
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  Few disagree that the best solution is for a political settlement to precede the accession negotiations. In those circumstances, negotiations would be joined by the Government of a bi-zonal, bi-communal, federal Cyprus. The date for negotiations to start has been agreed by the European Union, and that commitment will be honoured. However, we remain convinced that the negotiating process will be much easier and the path to accession much smoother if, by then, a settlement is assured or in sight.
  Again, let me make it absolutely clear—in direct response to the comments of my hon. Friend the Member for Hendon, South—that nobody, I repeat nobody, outside the European Union can, whatever the circumstances, veto Cyprus's accession to the Union. It is not impossible for a divided Cyprus to enter the European Union, but no one should assume that negotiations by a divided Cyprus would be simple or straightforward.
  In that context, I want to spend a few minutes on the question that arose at last week's General Affairs Council in Brussels about the participation of the Turkish Cypriot community in Cyprus's accession negotiations. We were, of course, disappointed that it proved impossible to reach agreement among all member states on the question, and that, as a result, the structured dialogue meeting with Cyprus that was scheduled for 25 February had to be cancelled. It was a particular pity, because we felt that it was rather straightforward and uncontentious simply to express the hope that a situation would be achieved in which all Cypriots could participate in the negotiation process.
  Clearly, a settlement before the negotiations started would achieve such an aim. It is a separate question—and one that we cannot judge now—what other circumstances might permit Turkish Cypriot participation in the accession negotiations. We wanted the GAC message to encourage the Turkish Cypriot community to see EU accession as an opportunity. What we seek to achieve is what the March 1995 Council envisaged: that accession should benefit all communities in Cyprus, as I have heard reflected in this debate.
  The events of last summer and the developments in the past few weeks reminded us how easily steps backwards can be taken. The arguments for steps forward should be all the more compelling. That is why the Government will persevere and persevere in their efforts in support of a settlement.
  Question put and agreed to.
  Adjourned accordingly at one minute past Eight o ' clock.