Commons Sitting of 20 November 1997

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
Oral Answers to Questions
  DEPARTMENT OF TRADE AND INDUSTRY
  The President of the Board of Trade was asked—
  DEPARTMENT OF TRADE AND INDUSTRY

    Export Promotion
    Mr. Goggins: What measures her Department is taking to support British companies in respect of export promotion. [15389]
    Mr. Barry Jones: What new policies she will initiate to improve the prospects of those industries which export abroad. [15396]
    The Minister for Small Firms, Trade and Industry (Mrs. Barbara Roche): Madam Speaker, I apologise for the absence of my right hon. Friend the President of the Board of Trade, who is currently fulfilling an important engagement in Australia, where she will open the "UK Now" exhibition and promote United Kingdom companies.
    My right hon. Friend announced on 4 November the publication of the Export Forum's report, "Towards an Export Initiative". We welcome the thrust of the forum's recommendations, and are looking forward to responding positively in a number of areas identified by the report.
    Mr. Goggins: An increasing number of small local companies are beginning to look abroad for markets for their products and services. LE-AL Furniture in my constituency recently fitted out the parliamentary buildings in Bratislava. What are the Government doing to support and encourage such companies?
    Mrs. Roche: We very much encourage small companies. On behalf of the House, I warmly congratulate the company in my hon. Friend's constituency on its fine efforts. Such companies can truly win for Britain.
    My recently launched "Vision for Business Links" should raise the quality of help and advice given to exporters, including first-time exporters. It will encourage all businesses to make contact with their local business link for expert help and advice.
    Mr. Jones: Does my hon. Friend agree that, at £4 billion per annum, British Aerospace is a magnificent exporter? Does she also agree that £120 million launch aid investment in the proposed A340–600 project will add
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    to British exporting success, create jobs and maintain our leadership in wing design over our German competitors? Even at this late stage, will she ensure that her Department seeks launch aid for that project, bearing it in mind that 2,800 of my constituents who make the Airbus wings deserve that vote of confidence?
    Mrs. Roche: I know of the strong interest that my hon. Friend takes in this matter. He led a delegation from the Broughton site to a meeting on 30 October. The Minister for Science, Energy and Industry was impressed by the quality of the presentation given by that delegation. No final decision on the provision of launch aid has been made, and discussions between British Aerospace and the Government continue.
    Mrs. May: Is the Minister happy with the current level of the exchange rate? What representations have she and other Ministers at the Department of Trade and Industry made on this issue to the Chancellor and the Prime Minister on behalf of British industry, especially British exporters? Is she aware that all the appearances under the sun by the Secretary of State for Trade and Industry at export exhibitions will not make up for the severe damage that is being done to United Kingdom exporters by the Government's exchange rate policy, and by the inordinate delay in granting export licences owing to problems in the DTI?
    Mrs. Roche: The hon. Lady has asked me a number of questions. I shall be as courteous to her as I can, because she is that most important of parliamentary institutions, my pair.
    We ascribe great value to our exporters, and our most important aim is long-term macro-economic stability. The Government are absolutely committed to helping exporters, as is illustrated by what we did in regard to trade fairs at the beginning of our administration. The best thing that we can do for our exporters is move away from the bust-and-boom policies of the last Government.
    Mr. Swayne: May I point out to the Minister that the pairing system is not particularly valuable, given the shift system that appears to be in operation on the Government Benches and in her Department?
    What action does the Department propose to defend British chocolate manufacturers against protectionism in Europe, and the activities of British Labour MEPs?
    Mrs. Roche: This Government and this party are determined to bat for Britain in any way that we can. Let me also tell the hon. Gentleman that the party of which he is a member, and which formed the previous Government, did a great deal of harm to our business interests by taking the attitude that it took on Europe. We are now reversing that, and making sure that we put British interests at the top of our agenda in order to help British business.
    Mr. Mackinlay: Will my hon. Friend raise with the President of the Board of Trade the urgent need for an initiative to attract British investment in Poland, Hungary, the Czech Republic, Slovakia and Slovenia? Compared with its German counterparts, United Kingdom Ltd. is very sluggish and tardy in investing in that market of some 60 million to 70 million people. Some leadership

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    and initiative from the Department would be welcome, and it would also pay enormous dividends if we could show the way and demonstrate that central Europe is not on the other side of the moon.
    Mrs. Roche: I am grateful to my hon. Friend, who has made an important point. He will be pleased to learn that we have had meetings with our opposite numbers in some of those countries. We see great opportunities for British companies of all sizes there.

    Formula One Racing
    Mr. Wilkinson: What assessment she has made of the effect of participation by British companies in formula one motor racing on the capabilities of the motor manufacturing industry in the United Kingdom. [15390]
    The Minister for Science, Energy and Industry (Mr. John Battle): Participation in formula one is of fundamental importance to the highly successful motor sport segment of the motor manufacturing industry in Britain. The motor sport segment also makes a valuable contribution to the technical capacity of the wider motor industry.
    Mr. Wilkinson: If British participation in formula one was so important to the British motor manufacturing industry, why did the crucial meetings about the European Union directive that would have banned tobacco promotion at formula one events involve the Prime Minister, the Secretary of State for Health, Chancellor Kohl, the British ambassador in Brussels, representatives of the Cabinet Office and of the Department for Culture, Media and Sport, Mr. Ecclestone and Mr. Mosley—but not to my knowledge, and not according to press reports, any representatives from the Department of Trade and Industry? Could this be just another case of the phantom President in action—or rather, inaction?
    Mr. Battle: This Government are rather more capable of joined-up thinking between Departments than the previous Government. The Department provided factual information about the motor sport industry and its vital contribution to the economy. Let me add that 50,000 people work full time in that sector, supporting some 30,000 who work in engineering.
    Mr. Jim Marshall: Does my hon. Friend agree that the trade unions have also made a great contribution to the success of the British motor industry? Does he also agree that contributions to political parties from trade unions tend, on the whole, to be more benign than those from rich individuals?
    Mr. Battle: Let me say first that formula one, and the whole motor sport industry, make a major contribution to Britain industrially. That involves suppliers in junior formulas, rally, training cars and carting—suppliers right through the supply chain. Their contribution is vital. Many people work in the sector. I would only add, in response to my hon. Friend's question, that I should
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    like to see the Conservative party deciding now to join us in publishing donations that are above £5,000. Why cannot that be done so that we know where they stand?
    Madam Speaker: Order. That does not relate at all to the question.
    Mr. Townend: Did the Minister have time to read today's press reports, which show that Mr. Mills still has strong links with formula one racing? Should not that rule out any further involvement by the Minister for Public Health in those matters on the ground of conflict of interest?
    Mr. Battle: I understand that the permanent secretary has confirmed that there are absolutely no problems. It is a bit rich for the Conservatives to raise matters in this way when they will not even publish annual accounts although they have been requested to do so by their party members.

    Post Office Network
    Mr. Barnes: What plans she has to strengthen the viability of the post office network; and if she will make a statement. [15391]
    The Minister of State, Department of Trade and Industry (Mr. Ian McCartney): The future of the post office network is an issue which we are considering as part of our review of the Post Office.
    Mr. Barnes: The review, which will extend commercial provisions in post offices, will be welcome, especially in many rural areas of my constituency. Would it not also help if more post offices could be agents for the Driver and Vehicle Licensing Agency? Post offices in my constituency, such as those in Ashover and Danesmoor, would find it valuable to be able to provide such a service instead of having to wait until an agency becomes available, which is how the present system operates.
    Mr. McCartney: I thank my hon. Friend for his comments. I wrote to him on 18 August advising him that Post Office Counters Ltd. is the agent for the DVLA and that, for reasons of cost, that organisation limits the number of post offices providing its service to 4,000 nationally. Consequently, Post Office Counters Ltd. gives the best possible geographical coverage within the limits that are set for it by the DVLA. I can confirm to my hon. Friend that the Government are fully committed to maintaining a nationwide network of post offices. As a consequence of that, and as part of a review, we shall seek to find ways and means to secure additional business in a range of areas for post offices in rural areas in particular. That is unlike the previous Government, who just wanted to privatise the Post Office and close it down.
    Mr. David Heath: Will the Minister look in particular at the interests of the small rural sub-post office? Will he perhaps go a little further than his answer suggested by seeking ways to extend the range of services that sub-post offices can provide? In particular, will he seek an

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    acceleration of the introduction of information technology systems in sub-post offices to enable them to participate in much wider provision for rural populations?
    Mr. McCartney: Almost 60 per cent. of villages in the United Kingdom have a post office but only 5 per cent. have a bank. This week, a ground-breaking agreement was reached between the Post Office and the Co-operative bank which will give basic banking services to all post offices. I repeat that, as part of the review, we are keen to see the introduction of new services in post offices throughout the United Kingdom. My offer to the hon. Gentleman is that, when the review and the way in which we intend to take it forward are in the public domain, I shall welcome from all hon. Members ideas on how to encourage new businesses in rural areas. Post offices should be seen not simply from the narrow angle of post offices but as small businesses in their own right. We are committed to promoting that.
    Mr. Prior: Given the Government's commitment to giving the Post Office greater commercial freedom and growing liberalisation in Europe, is the Minister considering the introduction of private capital to the Post Office?
    Mr. McCartney: We have already introduced private capital. A few weeks ago, we gave permission for a joint venture involving the catering services company Quadrant. That will ensure the introduction of private capital into what will become one of the largest and, we hope, the most successful contract catering organisations in Europe, providing services not just to the Post Office but to a range of public and private sector companies which can take advantage of the change.

    Working Time Directive
    Mr. Lock:: If the provisions of the working time directive will apply to British employees of private companies.[15392]
    Mr. Ian McCartney: Yes. The directive covers all sectors of activity, both public and private, with the exception of those involved in the following activities or sectors of activity: air, rail, road, sea, inland waterway, lake transport, sea fishing, other work at sea, and doctors in training.
    Mr. Lock: Does my hon. Friend agree that paid holiday is a basic right, which should be available to all civilised people in a civilised country, and that it is a scandal that the previous Government failed to bring that most basic right into United Kingdom domestic law, leaving 8 million people without paid holiday? Does he agree that the directive, which will bring paid holiday to 8 million low-paid workers, will be welcomed? Is it not a shame that the directive has not yet been introduced because the previous Government attempted instead a futile challenge in the European Court of Justice?
    Mr. McCartney: My hon. Friend is right. The previous Government tried to turn Britain into sweatshop Europe, as a consequence of their inactivity. I give a commitment that we shall end the exploitation. It is time to end the imposition of long hours for low pay, and to ensure that
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    workers have the right to minimum paid holidays and decent working conditions. That is one of the reasons why we are on the Government Benches and Conservative Members are on the Opposition Benches.
    Mr. Ruffley: Do Ministers support European Commission proposals to extend the scope of the working time directive by ending exemptions from it?
    Mr. McCartney: The hon. Gentleman knows full well that consultation is taking place—the European Commission has issued a consultation paper, to which we shall respond. At the end of the consultation, we shall ensure that the British Government put the case in relation to those sectors. One thing is absolutely certain: we have made a priority decision to end the previous Government's opt-out on the working time directive and the young workers directive and to make resources available. We shall participate in the consultation process in respect of those sectors that are excluded, to ensure that workers in Britain will be covered in the same way as workers in Europe

    Minimum Pay Rates
    Mr. Fabricant:: What consideration she has given to setting separate minimum pay rates for different regions of the United Kingdom; and if she will make a statement. [15394]
    Mr. Ian McCartney: The Government intend to introduce a single national rate.
    Mr. Fabricant: The Minister will be aware from his Department's figures that, if the minimum rate is not set quite low, as it is in the United States, it will cause wholesale unemployment, so does he agree with the recent recommendations of the Minister without Portfolio to the Chancellor of the Exchequer that there should be wholesale exemptions, by both industry and class of worker—or does he disagree?
    Mr. McCartney: What a brass neck—a Conservative Member coming here and being an apologist for low pay. In the hon. Gentleman's constituency, 5,000 families earn so little that they have to rely on in-work benefits, and 100,000 people in the west midlands earn less than £2.50 a hour. We won the last general election on the principle of a national minimum wage, no separate sector rates and no derogations for companies. It will be a national minimum wage. Within 90 days of taking office, the Government created the Low Pay Commission and soon we shall publish the Bill implementing the national minimum wage. It is a priority policy on which we are proud to have fought the election.
    Mr. Alan W. Williams: May I ask Ministers not to have any exemptions from the minimum wage? My constituency in Wales, north-east England and Northern Ireland have the lowest-paid workers—we are at the bottom of the pay league. The minimum wage will do a power of good to thousands of my constituents. We want a minimum wage with no exemptions, because exemptions create just loopholes for big and small business.
    Mr. McCartney: My hon. Friend is absolutely right and that is why we fought and won the general election

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    on a policy of a national minimum wage. There will be no sectoral, regional or company derogations and it will be available from day one of employment. There will be a national minimum wage in this country. It is a priority policy of which the Labour Government can be proud. The 18 years of Tory government led to the largest differentiation between low-paid workers and those at the top. The Conservative party is the party of the few and we are the party of the many.
    Mr. Fallon: In that same letter to the Chancellor, the Deputy Prime Minister wanted to exempt seamen, the Minister of Agriculture, Fisheries and Food wanted to exempt some fishermen and the Minister without Portfolio wanted variations by region, by size of business and by sector. Why does the hon. Gentleman think that a national minimum wage is workable when the rest of the Government do not? What is the point of setting up the Low Pay Commission when Ministers are secretly deciding those exemptions behind its back?
    Mr. McCartney: Tory Members cannot accept that they lost a general election on this issue. The position is clear. There will be a national minimum wage with no regional, no sectoral and no company derogations and it will be available to workers from day one of employment. We established the Low Pay Commission within 90 days of taking office. It is independent and is responsible for giving advice to the Government about the starting rate of the minimum wage. We await its report, which we have asked it to produce by the end of May 1998. As a consequence of that, this country will have a national minimum wage. Only Tory Members still oppose a minimum wage. The Conservative party was the party of the fat cats. The Conservative Government drove down wages. We won the general election on the clear and simple premise that there would be a national minimum wage.
    Mr. Pike: Does my hon. Friend agree that thousands of people in Burnley and east Lancashire who are on low pay or poverty pay will welcome what he has said and the fact that, for the first time for many years, they will get a fair day's pay for a fair day's work?
    Mr. McCartney: My hon. Friend is correct. This is one of the most popular policies promoted by the Labour Government. That is why Tory Members are isolated. A large proportion of business in Britain now supports, in principle, the concept of a national minimum wage. Businesses throughout Britain are flooding the Low Pay Commission with evidence in support of a national minimum wage. The only people in Britain who are still apologists for poverty pay are Tory Members. I repeat that that is why they are in opposition and we are in government.

    Low Pay Commission
    Mrs. Virginia Bottomley: What representations she has received on the work of the Low Pay Commission. [15397]
    Mr. Ian McCartney: I have received a number of representations on the work of the Low Pay Commission. It is well advanced on its programme of consultation to
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    obtain views of employers, employees and other interested organisations and individuals on the national minimum wage through written evidence and by holding meetings.
    Mrs. Bottomley: Does the hon. Gentleman agree with the President of the Board of Trade, who said that wide-ranging exemptions would be well nigh unworkable and inconsistent with the idea of a national minimum wage? When considering all the submissions from industry, would the Minister care to look at the response of the British Hospitality Association, which is responsible for 2 million jobs—one fifth of the new jobs—and which gives many young people an opportunity to work? That association talks about the dangers of a minimum wage.
    Mr. McCartney: Having listened to the right hon. Lady's contribution, I can see why she was named the poorest Minister in the worst Government in living memory. I made it clear about 30 seconds ago, or less, that there will be a national minimum wage with no sectoral derogations and no opt-out for companies and it will be available from day one of employment.
    The Low Pay Commission has already received over 350 individual items of evidence about the minimum wage. It is on a regional tour of England and will visit Scotland, Northern Ireland and Wales. There is consensus among its members to produce workable proposals for the establishment of a national minimum wage. The Low Pay Commission is a success. It shows that employers, working with employees, can come forward with proposals to end poverty pay.
    Mr. Winnick: Does it not make my hon. Friend's blood boil—it certainly does mine—that the strenuous objections to a minimum wage come from Conservative Members who not only receive a parliamentary wage, but in almost every case get extra money from outside sources? How can they possibly justify denying fellow citizens a decent wage when so many people in this country, especially in the west midlands, earn a starvation wage? It is a scandal. Conservative Members should be thoroughly ashamed of wanting to deny those people justice when they earn so much money themselves.
    Mr. McCartney: My hon. Friend is right. In fact, during the last Parliament, many Conservatives were part-time Members of Parliament. Some of them would not ask a question unless they were paid for doing so. The truth is that Conservative Members show double standards and hypocrisy. For 18 years, they drove down pay for the most vulnerable in the community. Now, this new Government intend to reverse that trend and introduce a national minimum wage, which will be a saviour for low-paid workers.
    Rev. Martin Smyth: The Minister has included Northern Ireland in his remarks so, as an elected Northern Ireland Member, I do not think that I can be criticised for pressing the point. 1 trust that the Low Pay Commission will not be following our American cousins and recommending the lowest minimum wage.
    Mr. McCartney: The Low Pay Commission was in Northern Ireland this week, taking evidence. Its task

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    is that, by the end of May next year, it must make proposals for the establishment of a national minimum wage. At that stage, we shall consider its proposals. Surely the most important point is that, within 90 days of the general election, we established the Low Pay Commission, which is now out in the country taking evidence and working with low-paid workers and employers to try to formulate proposals for the introduction of a minimum wage.

    Radio Spectrum
    Mr. Ben Chapman: If she will make a statement about her Department's policy towards maximising efficient use of the radio spectrum. [15398]
    Mrs. Roche: The Government are committed to the efficient use of the radio spectrum resulting in the creation of wealth, competition, quality and choice, benefiting operators and consumers alike. The Wireless Telegraphy Bill currently before the House includes a number of new powers to improve spectrum efficiency.
    Mr. Chapman: I thank my hon. Friend for her response. Does she agree that this is yet another example of practical action by the Government in new technology? Will not that action benefit the whole economy? Does not this Government's action contrast starkly with the view of the Opposition who, through indecisiveness and backsliding, have managed to take two different views on the matter, one when in government and the other when in opposition?
    Mrs. Roche: I agree with my hon. Friend. The Bill will provide the spectrum management tools to keep the United Kingdom at the leading edge of the information revolution. Our action contrasts with that of the Opposition, who have made a number of reverses on the Bill. When they were in government, they introduced a White Paper and also included proposals for the Bill in their manifesto at the general election. When we introduced the Bill in the other place, they welcomed it—but when it came to Second Reading in this House, the right hon. Member for Wokingham (Mr. Redwood) denounced it and pledged vehemently to oppose it. However, in Committee last week, the hon. Member for Sevenoaks (Mr. Fallon) described it as a modest Bill and not of deep political controversy. I am looking forward to the Opposition's next U-turn on Third Reading.
    Mr. Gray: Does the hon. Lady agree that, in reality, the Bill represents a tax increase of £1,500 million?
    Mrs. Roche: Absolutely not. That is an incredible suggestion given that the proposals were not only in the Conservative party's manifesto—I assume that the hon. Gentleman stood on that manifesto—but were trumpeted by the former President of the Board of Trade. The Bill is not a tax-raising measure and it has been warmly welcomed by industry.
    I understand that the hon. Gentleman has no stomach for the fight. On Second Reading, the right hon. Member for Wokingham said that the Opposition would keep us in Committee for months. I am glad to tell the House that the hon. Member for Sevenoaks gave up the fight after one week.

    Private Shareholdings
    Mr. John M. Taylor: If she will make a statement on the actions Ministers in her Department have taken to avoid conflicts of interest relating to private shareholdings. [15399]
    Mr. Ian McCartney: Department of Trade and Industry Ministers have acted in accordance with guidance in paragraphs 109 to 123 of the ministerial code, which provide a number of alternative options for avoiding conflicts of interest relating to private shareholdings.
    Mr. Taylor: Why does the Minister not just say what shareholdings Ministers hold or have recently held, so that we can conclude which of them are disqualified from what?
    Mr. McCartney: Ministers have fully complied with the high standards set in the ministerial code. They have avoided conflicts of interest using options in the code. The difference between Labour Ministers and the Tories is a simple one: we are squeaky clean, but they are just squeaky.
    Mr. Redwood: The Minister will not answer the questions today, and the President of the Board of Trade never answers them. She has had to go all the way to Australia to ensure that, today, she is not put under pressure on those questions—so breaking another rule of the ministerial code, which states that, when Parliament is in session, Ministers should not go abroad on Cabinet day. She is running scared down under. Why will the Minister not now tell us the answer to a very simple question: which companies, issues and industries each DTI Minister cannot handle because of a present or past shareholding, or a present or past prejudice? He should tell the House and the public the answer to that question, because they need to know who—if anyone—is conducting business in the DTI.
    Mr. McCartney: True to form, the right hon. Gentleman is shooting from the lip. He has tabled 70 questions on all conceivable details of the positions held by Ministers—but he knows the position. Ministers have complied fully with the high standards set in the ministerial code.
    Mr. Redwood: Answer.
    Mr. McCartney: I am answering. Ministers have avoided conflicts of interest by using options in the code. The shadow Minister has failed comprehensively to get running an allegation and scare story that is completely out of order. Lord Simon, for example, has at all times behaved with complete propriety. That was confirmed by Sir Robin Butler, the Cabinet Secretary. The Minister for Competition and Consumer Affairs, my hon. Friend the Member for Edinburgh, South (Mr. Griffiths), has a small shareholding because of a tragic accident, in which his father died. [Hon. MEMBERS: "A pathetic answerl It is absolutely correct. Consequently, my hon. Friend has acted with propriety.
    When the shadow Secretary of State was Secretary of State for Wales, his wife was secretary of British Airways. He declared an interest when she, on behalf of that

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    company, was involved in a £100 million investment programme in Wales. He acted in the same way in which Ministers have acted. He has made no case to answer. How much further will he stoop to get a story going that does not exist?

    Rolls-Royce
    Mr. Nicholas Winterton: If she will make a statement on her Department's policy on the ownership of the Rolls-Royce motor car company. [15400]
    Mr. Battle: The sale of the Rolls-Royce motor car company is a commercial matter for Vickers. If the sale proceeds, it will fall to be considered by the appropriate regulatory authorities.
    Mr. Winterton: I am sure that the Minister is well aware of my deep commitment to manufacturing industry in the United Kingdom and the contribution that it makes to our economy and to employment. Is he not concerned that the last prestige United Kingdom car company could well pass into foreign hands, and that, if it does, decisions relating to its future expansion and employment might be affected by European regulation? Both manufacturing and employment could be taken out of the United Kingdom—out of my county, and out of the constituency represented by the hon. Member for Crewe and Nantwich (Mrs. Dunwoody). Will he take a very positive interest in the matter, to try to protect British manufacturing industry and British jobs?
    Mr. Battle: I appreciate that the hon. Gentleman has expressed a passionate concern for manufacturing during his time in the House; we acknowledge that and hope he knows that we share his concern. It is not yet clear whether anyone has made a firm offer. We believe that the company is an example of engineering excellence in Britain, and we hope that that will continue to be so, whoever becomes the owner.
    We are not opposed to inward investment per se, but we want the excellence of that company and its contribution to the automotive industry to continue. We are keen that any investors should maintain and develop the company's product range and safeguard the long-term interests of the work force. We shall have to wait until a serious bid is made to know whether it will have to be referred to the European Commission's merger body or whether our regulatory authorities can handle it.
    Mrs. Dunwoody: Is it not a total disgrace, however, that the last remaining wholly British-owned car firm is now at risk of being taken over by German manufacturers who may or may not choose to keep that manufacturing unit in my constituency? The largest employer of the most high-quality engineers is now put at risk because of the greed and voraciousness of Vickers, which has walked away with millions of pounds of taxpayers' money without a thought for the future of manufacturing in this country and without taking any responsibility for this high-quality product.
    Mr. Battle: To some extent, I agree with my hon. Friend. It is fair to say that the UK does not have an automotive industry, but there is a large car industry in Britain—it includes the whole of the supply chain and
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    engineering excellence, and it employs many people. I can only repeat what I said to the hon. Member for Macclesfield (Mr. Winterton): no bid has yet been made for the company, although there are rumours of a bid. At the appropriate time, consideration will be given to whether to refer it to the European Commission's regulatory authorities or whether it can be dealt with here.
    The story outlined by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) is the story of what has been going on for the past 20 years—restructuring. However, I would hope that the quality and excellence of our companies means that they can hold their own in the wider world.

    Coal Industry
    Mr. Skinner: What representations she has received about maintaining the size of the coal industry; and if she will make a statement. [15401]
    Mr. Battle: We have received a wide range of representations about the future of the coal industry. Our objective is to have secure, diverse and environmentally sustainable supplies of energy at competitive prices. Deep-mined coal has a part to play in meeting this objective. Since taking office, we have taken several strategic steps to create a more level playing field for the industry to try to ensure that coal is not priced out because we remain convinced of the importance of the coal industry, which still makes a significant contribution to local economies and to the economy as a whole.
    Mr. Skinner: Does my hon. Friend agree that in the three short years since privatisation, it has become apparent to all who work in the industry and many associated with it that privatisation has failed and that if we are to rescue what remains of it, it should be taken back into public ownership? In the meantime, as the Government are not likely to take that path, will they take three other steps: first, will they curb imports dramatically; secondly, will they get rid of the nuclear subsidy in its entirety; and thirdly, will they stop opencast mining and change the planning considerations that allow it? If the Government do some of these things, they will help those miners who are still hanging on to their jobs, some of whom have been threatened with the sack because they have the audacity to report accidents that happen half a mile underground. Whatever else the Minister does, if any money is going directly or indirectly to Budge, he should take a stake in the industry.
    Mr. Battle: It was not just the coal industry that was privatised by the Conservatives, but the power stations, the grid system and even the means of buying electricity. In other words, the whole of the energy industry was fragmented, which is partly what caused the havoc that resulted. My hon. Friend asked what we can do—we are already doing it. In our six months in office, we have taken action by passing the Fossil Fuel Levy Bill through this place precisely to remove the advantages enjoyed by nuclear power and to tackle the import of nuclear energy from France via the interconnector. We have taken strong action to challenge the European Commission on subsidies for German and Spanish coal. I have asked for a review of the electricity pool to ensure that the playing field is not tilted against coal. We are also challenging the

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    gas contracts, asking the regulator to investigate whether coal is disadvantaged in that respect. We are also working hard and making a practical commitment on trying to find a way to develop clean coal technology, which would guarantee a future for deep-mined coal in Britain. Opencast is a matter for the Department of the Environment, Transport and the Regions.
    Mr. Paterson: In 1992, the right hon. Member for Livingston (Mr. Cook) said that, as part of Labour's policy for coal, no more licences would be issued for gas-fired power stations. Why has BP recently been issued with a licence for a substantial gas-fired power station?
    Mr. Battle: A number of power station application consents were under consideration at the time of the general election. There were 25 close to completion. Some have been granted; others are still in the pipeline. The Conservative Government let through 44 gas-fired power stations. The policy was that each should be decided on its merits, after consultation with local communities. That remains our policy. There was no preferential treatment for BP. Some companies are complaining that we are not processing the rest fast enough.
    Mr. Tipping: Did not the previous Government privatise the coal industry and the electricity industry? If there are difficulties with the new contracts expiring on 31 March, is not the problem the fact that the whole industry is in the private sector and the Minister has very limited opportunities to intervene to save the coal industry?
    Hon. Members: Buy it back.
    Mr. Battle: Conservative Members shout, "Buy it back." At the time, they were shouting, "Sell it." The hon. Member for Sevenoaks (Mr. Fallon), who sits on the Opposition Front Bench, was once the parliamentary private secretary to the Secretary of State for Energy. He has said on television, "With hindsight, we privatised things in the wrong order. Perhaps we ought to have privatised the coal industry first. It should be run like a business and I wish we would hand it over to a great mining company in this country like RTZ. It is all about going out and finding the cheapest source of power, not about employing people in mines." How can the Conservatives complain about employment in the industry?
    My hon. Friend the Member for Sherwood (Mr. Tipping) is right. I am not party to the discussions between the private companies and the power stations. I encourage them to get on with those discussions. I understand that there has been more encouraging news in recent weeks, despite the talk in the press. RJB is negotiating with Eastern Electricity and National Power. I wish the company well in its negotiations with PowerGen. I hope that those power stations will buy deep-mined coal from RJB and ensure the continuation of Britain's deep-mined coal industry.
    Mr. Redwood: Will the Minister give a clearer answer on his policy on the dash for gas? In opposition, Labour said that it would stop the policy to protect the British coal industry. How much capacity will he licence?
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    How many pits will that destroy? Is it not true that the only major plant that he has licensed is the BP plant and that at least 25 others are awaiting a decision? Why the different treatment?
    Mr. Battle: There is no different treatment. Others have been accepted. The BP application was one of the first ready for a decision after the election. Seven applications have been determined since the general election, one of which involved the use of orimulsion in Pembroke. We referred that to a public inquiry because we did not think that it should go forward without one. The company then withdrew the application. There is no set timetable for completing consideration of the applications. Each one is considered on its merits against the background of section 36 and section 37 consents. In assessing those applications, we have to address local issues and ensure consistency with our wider objectives of secure, diverse and sustainable supplies.
    Mr. Redwood: How many are there?
    Mr. Battle: There are another 27 in the pipeline. I am prepared to read the right hon. Gentleman the whole list. His allegation that the BP application was the only one accepted is not true.
    We are trying to encourage applicants to consider combined heat and power schemes so that we can have more thermo-efficient energy generation. That is one difference from the Conservatives' policy that we have decided on in order to conserve energy.

    European Structural Funds
    Mr. Andrew George: What progress is being made in the designation of United Kingdom regions for the latest round of European objective 1 aid. [15402]
    Mrs. Roche: On 16 July, the European Commission published some suggestions for the future of structural funds after 1999 in its communication "Agenda 2000". We expect the Commission to publish detailed proposals next year, which will then need to be negotiated in the Council of Ministers and approved by the European Parliament. The final regulations will determine how individual regions and areas become eligible for structural funds.
    Mr. George: I thank the Minister for that helpful reply. What assurances can she give the people of Cornwall and other regions with economic and structural difficulties that negotiations on the designation of NUTS—nomenclature of units for territorial statistics—level II regions will be brought to a speedy conclusion? Is she prepared to prioritise potential objective 1 regions on the basis of need? Is she prepared to recognise that the future of economies such as Cornwall's, which has suffered a great deal, very much depends on a speedy and effective conclusion to the negotiations?
    Mrs. Roche: I recognise the hon. Gentleman's concern and I recognise that Cornwall, like many other UK areas, faces specific economic and social issues. The Government's statistical service examined United Kingdom boundaries used for European regional statistics because of recent local government changes and made

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    proposals to Eurostat for changes during the summer. One proposal was to separate Cornwall from Devon at NUTS H level. The Government's statistical service is still in discussion with Eurostat. The hon. Gentleman will also be interested to know that the United Kingdom is pushing the Commission to take into account gross domestic product in assessing eligibility for structural funds.
    Mr. O'Neill: I am grateful to my hon. Friend for the clarity with which she has expressed the Government's concerns. Will she go beyond the issue of the map and tell us whether there is any prospect of the sums involved in attracting industries into the United Kingdom being reviewed? I understand that they have not been looked at since the 1980s. It has been suggested that the figures—£17,000 for objective 1 areas and £6,000 for objective 2 areas—are out of date and put us at a disadvantage compared with other parts of the European Union. Will the Minister look at the sums involved, as well as the map, because they are important in influencing where companies invest?
    Mrs. Roche: I assure my hon. Friend that the United Kingdom is looking for fairness and equality in the process. We also want to ensure that the procedures are as fair and as simple as possible so that there can be a clear understanding of the policies.

    Competition
    Mr. Hanson: What measures her Department is taking to promote competition. [15403]
    The Minister for Competition and Consumer Affairs (Mr. Nigel Griffiths): The Government's commitment to competition is demonstrated by the introduction of the competition Bill, with new laws to focus on genuinely anti-competitive behaviour. It will remove the current bureaucratic laws on cartels. The Confederation of British Industry has welcomed our broad approach.
    Mr. Hanson: Does my hon. Friend agree that the competition Bill will ensure that companies that face anti-competitive behaviour will have a stronger hand in tackling the problem? Will he confirm that the Bill will bring us into line with our European partners? What do consumer groups feel about the Bill? I am sure that they, too, will welcome it.
    Mr. Griffiths: I can give my hon. Friend the assurance that he seeks. We have received more than 160 responses to our consultation document. Our approach has attracted broad support across the spectrum from businesses, from consumer organisations and from competition practitioners. The Bill will create the right conditions for the success of British businesses in the global marketplace.
    Mr. Bercow: Will the Minister give the House a guarantee that he will protect local pubs, petrol stations and newsagents from the threat to their trading that the competition Bill poses?
    Mr. Griffiths: I think that we all noted that a note was passed to the hon. Gentleman by the right hon. Member for Wokingham (Mr. Redwood). The hon. Gentleman would have done well to have read the Bill and followed its proceedings in the Lords. If he had, he would know that he has just raised a red herring.
    Mr. Bercow: Answer.
    Mr. Griffiths: I am answering. This is part of the clear smear that the Conservatives have mounted to frighten small businesses and others. There is no truth in his allegation.
    Mr. Prosser: I welcome yesterday's announcement by the President of the Board of Trade of the decision to allow the setting up of a merged ferry company, which will provide better opportunities for ferries sailing from my home port of Dover to compete with the channel tunnel. Is my hon. Friend aware that, if the proposals had been rejected, it would have caused far more redundancies than the 1,000 faced by my constituents? Does he understand the anger felt by people in Dover when they see a bankrupt channel tunnel, with £8 billion-worth of debt around its neck, continuing to steal trade from the successful ferry fleet and destroy jobs in Dover?
    Mr. Griffiths: I shall of course pass my hon. Friend's welcoming comments to my right hon. Friend the President of the Board of Trade.
    Mr. Breed: Will the Minister consider introducing measures similar to those in other European countries which would prevent retailers from selling their goods below a certain level in order to protect and enforce fair competition?
    Mr. Griffiths: We have no plans at the moment to introduce such measures. We are guided by the key principle that competition should be fair and should be seen to be fair.
    Mr. Gardiner: I am grateful for my hon. Friend's remarks about promoting competition, and especially about the way in which small and medium-sized enterprises should be supported as opposed to larger public companies. Will he investigate a contract which I understand is being tendered this week for the DTI export sales leads service? Will he particularly examine the way in which his Department has dealt with the Cequel Link consortium in my constituency, which has tendered for the project but seems to have been met on most occasions by civil servants who were keen to question the capacity of a consortium comprising small and medium-sized enterprises to run the service, rather than to consider the substantive nature of the positive aspects of the bid? This is an extremely important matter to my constituency.
    Mr. Griffiths: I have listened with care to my hon. Friend. My colleagues and I will certainly give careful consideration to any further evidence that he cares to submit.
    Mrs. Gillan: Given that when considering competition issues the President of the Board of Trade should listen

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    to all sides of the case before reaching a conclusion, why did the Minister for Competition and Consumer Affairs tell the Sunday Mirror on 31 August that he was going to slash the prices of electrical goods more than two weeks before the consultation period on electrical retailing was completed, thereby prejudging any outcome? Has he not totally undermined the President's obligation impartially to consider all representations on competition matters and totally destroyed the industry's confidence in that impartiality? The Minister has already stood aside from three competition inquiries. Will he now stand down from all competition matters to save any further embarrassment?
    Mr. Griffiths: It is a shame that we spend a great deal of time ensuring that the hon. Lady gets copies of DTI press releases. If she had read my right hon. Friend's welcoming comments about the inquiry, she would know that the usual procedures were followed in full and that my right hon. Friend will be considering the matter objectively, as ever. It was interesting to note that the hon. Lady contacted officials at the Department of Trade and Industry twice this week to find out how the procedures worked. I should have thought that someone of her experience—a senior Front-Bench spokesperson—would have known that. Perhaps she should come in for a seminar. I offer her the opportunity.

    Exporters
    Ms Keeble: What measures her Department is taking to support British exporters. [15405]
    Mr. Nigel Griffiths: As well as the measures that my hon. Friend the Minister for Small Firms, Trade and Industry described earlier, the Department of Trade and Industry sponsors the overseas trade services, export development counsellors and a range of other pro-business measures.
    Ms Keeble: I thank my hon. Friend for that answer. What is he doing to encourage small firms, especially those that do not currently export—which includes about 85 per cent. of the firms in Northamptonshire? Is he prepared to encourage closer links between the overseas trade services of the Department and business links, which have become well established in Northamptonshire and had some success in gaining export orders?
    Mr. Griffiths: My hon. Friend is an ambassador for business links. The Department of Trade and Industry has funded export counsellors and 75 are in place in business links. The one in Northamptonshire works with a strong international team and benefits from invaluable expertise from the chamber of commerce

Home Detention Curfew
3.30 pm
The Secretary of State for the Home Department (Mr. Jack Straw): With permission, Madam Speaker, I should like to make a statement about an extension of the electronic monitoring—or tagging—of offenders.
On 30 July, I announced to the House a number of measures, building on our manifesto commitments, to protect the public and to establish a criminal justice system that is fair, swift and effective in tackling crime and disorder. Many of the measures—including new community punishments—will be provided by the crime and disorder Bill that will come before Parliament shortly. Others, such as automatic life sentences for second-time serious sexual and violent offenders and seven-year mandatory minimum sentences for drug traffickers, were brought into force on 1 October. Work is also in hand to bring the Prison Service and the probation service closer together.
The Government are pledged to be tough on crime and tough on the causes of crime. Ex-prisoners are plainly much less likely to reoffend if they have settled into work or if they are actively looking for a job or have a clear prospect of a job. The welfare-to-work programme will guarantee every young person who has been out of work for more than six months the opportunity to work or train. I have ensured that ex-offenders are targeted as a special group within the welfare-to-work programme.
Protecting the public and maintaining public confidence in the criminal justice system are my primary goals. Prison must be used for serious and persistent offenders. That is why I discharged our manifesto commitment to audit the resources of the Prison Service. As a result, I have provided an extra £43 million to help with the additional population pressures that we inherited and which were not adequately funded by the previous Administration. Since May, the prison population has risen by more than 3,400 to 63,000, an increase more than double the April 1997 predictions of my predecessor. To cope with that increase, I have authorised the building of four new prisons to provide an additional 2,400 places.
We must also give the courts a wider range of options on tough community punishments in which they—and the public—have confidence. Those can now involve greater deprivation of liberty by the use of new technology. Therefore, I am setting out today, to the House and to the public, new action that I am proposing in the use of tagging.
It may be helpful if I give some of the background information. Over the past 10 years, there has been much interest in the use of electronic tagging to provide 24-hour supervision of offenders who have been curfewed. The first trials, in 1989, which were of curfews imposed as a condition of bail—not a sentence—were not a success. The equipment simply did not work as intended.
The Criminal Justice Act 1991 provided for a new penalty of a curfew order enforced by electronic tagging. The previous Government delayed the implementation of those provisions until 1995, and then only introduced them in three trial areas—Norfolk, Greater Manchester and Berkshire.
On Tuesday, I published the report of the second year of the trials. To begin with, sentencers were very cautious about using their new powers, and only 83 orders were
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made in the first year. However, as it became clear that the equipment really did work, and that the orders were effective, more and more use was made of them. In the second year, 375 orders were made. In the last four and a half months alone, a further 269 orders have been made.
There are three reasons for the increase in sentencers' confidence in tagging. First, the equipment has proved absolutely reliable. When an offender is tagged, it really is possible to tell, second by second, whether he or she is complying with the curfew. Not only are absences instantly noted, but any attempt to tamper with the equipment is detected immediately.
Secondly, the two contractors have performed well. Every violation of the curfew conditions is followed up by properly trained and managed staff.
Thirdly, sentencers are using tagging as a high-level penalty, in many cases for offenders who might otherwise have been sent to custody.
Therefore, it is clear that the technology can offer substantial benefits for victims and the public. The trial areas for curfew orders made under the provisions of the Criminal Justice Act 1991 are now being extended into four new areas: West Yorkshire, Cambridgeshire, Suffolk and the Middlesex probation area, which covers the London boroughs of Barnet, Brent, Ealing, Enfield, Haringey, Harrow, Hillingdon and Hounslow. In addition, from January 1998, in the pilot areas of Greater Manchester and Norfolk, the courts will be able to impose a curfew order, enforced by tagging, as a community punishment on 10 to 15-year-olds, on fine defaulters who would otherwise be sent to prison, and on persistent petty offenders.
I turn to how I propose to use electronic tagging in respect of those who have been in prison and are very near to the end of their sentences. Those who are sentenced to prison typically have lived disordered, irresponsible lives. They are poor at making sensible decisions about their own futures or those of their families. In prison, of course, they do not have to. However, the moment prisoners come out of prison, they have to make critical decisions about what they do with every moment of the day; whether they drift back into crime, and into the company of their criminal associates, or whether they try to bring order into their lives.
Tagging has a key role to play here. If prisoners who are serving short-term sentences are tagged towards the end of the custodial period of their nominal sentence, they can be given the opportunity to structure their lives more effectively and be swiftly brought back to prison if they breach the tagging conditions.
The research into the first year of the trials showed that offenders see curfews enforced by tagging as a very severe restriction of liberty—just as magistrates and judges do. Some offenders have said that they found that the self-discipline required to complete such a curfew order made it harder than prison. Tagging also provides opportunities for offenders to take proper responsibility for working or looking for work, for keeping their families together and for maintaining self-control.
The case for introducing an element of tagging into the last part of a short-term prison sentence is very strong in any event, but it has been reinforced by the recent rise in the prison population. No one wants to see an unnecessarily overcrowded prison system, and it would be the height of irresponsibility not to take advantage of

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modern technology to help prevent that. The alternatives are bound to be at the expense of constructive prison regimes, and at the expense of improving the prisoners' prospects for resettlement—in other words, at the expense of the law-abiding public.
Therefore, I have decided to seek Parliament's approval to impose electronic monitoring on selected short-term prisoners in the last two months of their sentence. The orders will be called home detention curfews, and the relevant powers will be sought in the forthcoming crime and disorder Bill.
Home detention curfews will be available for prisoners who have received sentences of more than three months' but less than four years' imprisonment. They will be tagged for between two weeks and two months, according to the length of their original sentence. Currently, under the Criminal Justice Act 1991, such prisoners are automatically released at the halfway point of their sentence. All those prisoners will in any event shortly be back in the community.
There will be no automatic entitlement to tagging. The Prison Service will in each case conduct a risk assessment. If the prisoner fails it, he or she will continue to serve the sentence in prison until its halfway point, as now. The prison governor will set the place and times of curfew, in consultation, where needed, with the probation service. It will usually be 12 hours a day and could be more, but will in no case be less than nine hours a day.
That will enable the prisoner to have a specified period each day in which he or she can adjust to living in the community, while still facing a restriction on liberty for a major part of the same day. The curfew conditions will be in addition to the supervision requirements with which anyone with a nominal sentence of 12 months or more must comply.
If a prisoner breaches the conditions of the home detention curfew, he or she can immediately be returned to custody. As with the present trials of curfew orders enforced by tagging, the monitoring will be provided by private sector contractors, and there will be an invitation to tender in due course. Our aim is for the scheme to be operational in 1999.
At the heart of all my policies as Home Secretary is my commitment to provide better protection for the public and for the victims of crime. I am ready to use every measure at my disposal to honour that commitment. We now have a real opportunity to use modern technology to provide a much better transition for carefully selected prisoners from prison into the community. With the support of Parliament, I intend to take that opportunity.
Sir Brian Mawhinney: I thank the Home Secretary for his courtesy in letting me have an early view of his statement.
Seldom has the House listened to more verbiage to disguise such a massive U-turn in Government policy. I want to apologise to the Home Secretary, because in our debate on policing in London last Friday I suggested that he was only part owner of his job and that he shared it with the Chancellor of the Exchequer; I was wrong: the Chancellor now sets Home Office policy by himself, and the Home Secretary simply does what he is told.
"Tough on crime" never meant anything, given the Labour party's record in opposition; now its meaning is clear: it means soft on criminals. New Labour's language
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means anything that it decides that it will mean. According to the Home Secretary's statement, being tough on crime means being willing to put the public at risk in order to save money.
I welcome the Government's conversion to the importance of tagging. Why is the Home Secretary now in favour of tagging, when only a few years ago his party said that tagging was
"a dangerous and irrelevant concept…wrong in principle. It has enormous implications for civil liberties".—[Official Report,Standing Committee A, 18 December 1990; c. 274.]?
Will he confirm that this is another U-turn by his party and that tagging was an initiative of the previous Government in the context of sentences imposed by the courts?
How many prisoners does the Home Secretary expect to be freed each year if his proposals are enacted? How much saving in public expenditure does he expect to achieve? Will he confirm that that money will be clawed back by the Treasury? He mentioned victims, in passing, only twice, brazenly suggesting that this move would add to their protection. How exactly will victims feel more reassured and safer after the early release of offenders from prison?
In this country, courts decide sentences in individual cases. Will the Home Secretary confirm that he plans to breach that principle by substituting governors' judgments for those of the courts? If the Home Secretary wishes to assist criminals to re-enter society—that is a laudable wish shared by both sides of the House—why has he decided to release them two months early with tagging, rather than amend the law to require that they are tagged for the first two months after their release? We all know the answer—the Chancellor of the Exchequer has told him to save money.
The Home Secretary says that the Prison Service will conduct a risk assessment in each case. Who is the Prison Service in this context? Is it prison officers? Is it their union? Is it governors? Is it bureaucrats? Is it Mr. Tilt? Is it the Prisons Minister? Who is it? Who will be responsible to the House when the curfews are broken?
Given the limited nature of the tagging pilots thus far, and of those proposed, how will the Home Secretary reassure people throughout the country that they can have confidence in an untested scheme?
The Home Secretary has consistently refused to put in place mandatory minimum sentences of three years for career multiple burglars. Will he confirm that such criminals will be eligible to take part in the scheme, providing, of course, they have not been sentenced to more than four years? Will he confirm that violent and sexual offenders sentenced to four years or less will also be eligible to take part in the early release scheme?
Will the Home Secretary also confirm that most people sentenced to six months—who would usually serve only three months—by the courts, will, with time on remand and this scheme, effectively be able to walk free from the court, despite its decision that they should serve six months? How does he believe that that will reassure the public? Indeed, will he confirm that he does not believe in honesty in sentencing?
Today, we have seen a significant shift in this country's penal policy—from the victim to the criminal—and all to save the Chancellor of the Exchequer some money.

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We will not take any more moral lectures from the Home Secretary or the Prime Minister. We will recall the Home Secretary's complacency in the face of crime rates, which are a continuing worry, as he himself said only the other day. Crime rates are coming down as prison numbers are going up—a trend which he is determined to reverse, not because he believes in it, because I do not believe that he does, but because he has been told to get up and say so by the Chancellor of the Exchequer. I tell him now that when this bit of the crime and disorder Bill comes before the House, we will resist it.
Mr. Straw: The right hon. Gentleman asked me whether I believe in honesty in sentencing. The answer is yes, but he obviously believes in confusion in response. There has rarely been a more muddled response to any statement in the House since I have been a Member.
The right hon. Gentleman said that crime rates are a continuing worry. One might put that much stronger: in 18 years of a Conservative Administration, of which he was an adornment, we saw crime double. Despite the welcome modest falls in crime, his Government's record made crime victimisation levels in England and Wales the worst of any of 18 industrialised countries. Britain became a very much less safe place when his Government were in office.
I shall do my best to answer the few coherent questions that the right hon. Gentleman asked. He asked me about the numbers likely to be affected. That depends on a number of assumptions, especially about the risk assessments made by prison governors, which relates to his fifth question to which I shall come in a moment. If about half of those who would be eligible for this arrangement are granted home detention orders, the effect on the prison population in a year will be about 3,000. I shall be happy to provide him with further details if he wishes.
The right hon. Gentleman asked about savings in public spending. I have already pointed out that the public spending plans for the Prison Service, which he endorsed as a member of the previous Cabinet, did not provide sufficient funds even for prisoners entering the service on 1 May. As a result of that, I have had to arrange for an additional £43 million—resources which his Government never found—to pay for additional places, as well as order four new prisons. Waffling rhetoric about protecting the public or empty prison places sounds extremely hollow when set against the fact that his Administration, had they remained in office, would not have provided the prison places that I am providing. That is the truth—that is the reality written down in his own public spending plans.
The right hon. Gentleman asked about the additional protection that will be given to victims. I should point out that we are acting very differently from his Administration, who—contrary to what he said—suddenly in 1987 decided to change the parole rules and thereby secured the release of many thousands of prisoners, without any protection for the public. There is a world of difference between a prisoner being released on to the streets and a prisoner who is subject to curfew in the last two months of his sentence. Lord Hurd, a former Home Secretary, said in a lecture yesterday:
"Virtually all prisoners come out of prison. The public safety is put at risk if on release they are even less qualified to get a job and lead a law-abiding life than when they were convicted … Security is not just a matter of walls and wires."
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That is something which the right hon. Gentleman should remember.
The right hon. Gentleman asked whether this is a breach of the principle of the court deciding. It is not, and I have already referred to the decision taken by his predecessor in 1987. By the way, some of us remember that last summer—before the right hon. Gentleman moved to home affairs—his predecessor let out 500 prisoners, simply by mistake. There was no decision taken—not by the court or even by the Home Secretary.
The right hon. Gentleman asked who would provide the assessment. I have made it clear that it will be made by the governor. He asked who will be responsible for that—an interesting question, given the years of evasion about who was responsible for the Prison Service. The first decision that I took in respect of the Prison Service was that I would be responsible. I am responsible and I shall be not only answerable to the House, but responsible if the scheme goes wrong. I have confidence in the scheme—it is not untested.
The right hon. Gentleman asks about time on remand. Again, we need no lectures about the length of time prisoners spend on remand. Thanks to the huge delays that his Administration built into the system, many prisoners spend not two or three months, but six months, nine months, a year, or more, on remand. We are making arrangements for the scheme not to apply where a prisoner has been on remand and is given a sentence by the court that would amount to his immediate release.
Lastly, I ask the right hon. Gentleman to read a tract about the Conservative record by his hon. Friend the Member for Havant (Mr. Willetts), a shadow employment spokesman, who wrote:
"The criminal justice system"—
that is, the Conservatives' criminal justice system—
"too often operates like a classic bad parent".
That is exactly how it operates—by the way, the title of the tract, published since the election, is "Is Conservatism Dead?"
Mr. Ross Cranston: I welcome my right hon. Friend's statement and regret the response of the right hon. Member for North-West Cambridgeshire (Sir B. Mawhinney). My right hon. Friend will know that the Select Committee on Home Affairs is shortly to begin an inquiry into making community sentences more effective. Will he explain his views on making punishment in the community a more effective method of sentencing?
Mr. Straw: I am grateful to my hon. Friend. Making community punishments more effective and increasing public confidence in them is of critical importance if such sentences are to command public confidence and greater use is to be made of them. Tagging is one way of improving confidence in community sentences. A second way is for us to secure a better organisation of the probation service and I spelled out the detail of that in a speech to the national probation conference a week ago.
The probation service is set national standards, and some services abide by them, but the overall standard of performance is not as good as it should be. Probation services are supposed to produce pre-sentence reports in 15 days, but they do not: it takes them three weeks. In my

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first two weeks in office, I came across an outrageous situation in the Uxbridge area, where community sentences were not being carried out. That was exposed by the News of the World. I instituted an immediate inquiry into that service, and effective disciplinary action has been taken.
We should construct effective community punishments. We should call them what they are, because "community service" is a confusing title. We must ensure that they are effectively enforced, and there is no doubt that tagging can play an important role in ensuring their full enforcement.
Mr. A. J. Beith: Is the Home Secretary aware that electronic tagging is not a magic cure for criminality? It is merely a useful way of backing up community supervision. The probation service must have the means to provide that supervision for it to be of any value. Does he recognise that, as virtually all prisoners are ultimately released, what matters for public protection is that the regime inside the prison and any subsequent supervision are effective and lead to a prisoner's rehabilitation? That is not possible with the present vastly overcrowded prisons and the limitations that that places on the service's ability to do the job properly. Is the Home Secretary aware that the previous Government sought to give the impression that they would protect the public by locking up a record number of people for a record length of time, yet they never provided the resources for prison places on the incredible scale that that required? Will he make no effort at all to follow that dreadful example?
Mr. Straw: We all recognise that some people must be locked up, albeit for a short time, as a exemplary punishment, some must be locked up for a very long time to protect the public, and others must be locked up for the whole of their lives. Most offenders are released from prison within a short time. That is why it is extremely important to ensure that the transition from prison into the community is more effective than it is at present.
The right hon. Gentleman is right to say that if regimes are heavily overcrowded, they are less likely to be constructive. Evidence shows that the reoffending rate is higher in those circumstances, so victims are less protected.
I hope that the right hon. Gentleman will study some of the clear research evidence. An increase in the reoffending rate as a result of locking people up is not a sensible way to protect the public, even though I accept, and always have, that a significant proportion of criminals must be locked up.
The right hon. Gentleman asked whether I accept that tagging is not a magic cure. Of course, I accept that, but there is no doubt that it is an effective system and is working well. The trials in Greater Manchester had a failure rate of 17 per cent.—an 83 per cent. success rate. The failure rate in Norfolk was even less: the success rate was about 90 per cent., which is higher than the success rate of many probation orders.
The right hon. Gentleman asked me to agree that I would not provide any more resources for the Prison Service. I am providing additional resources because of the huge backlog of criminality and offending over which the previous Government presided. More serious criminals are coming before the courts, and they must be
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sentenced. Some of them will be sent to prison, so the prison population will continue to rise. I have provided £43 million in extra resources for this year and next year to cope with that, and have ensured that many prisons have additional accommodation. I have also ordered four new prisons.
Mr. Dennis Skinner: Is my right hon. Friend aware that, like many people, we had strong reservations about this scheme when it was first mentioned in the House? Never in my wildest dreams did I imagine that there would be a pilot scheme involving 400 Labour Members running about with pagers. I think it works.
Mr. Straw: My right hon. Friend—I am sorry, I mean my hon. Friend; I do not want to elevate him at this stage—is absolutely right. The success of the electronic media goes well beyond the treatment and care of offenders. [Interruption.] There is no doubt about that.
I will arrange for my hon. Friend the Member for Bolsover (Mr. Skinner) to be given a pager on a trial basis.
Mr. Skinner: No, no!
Mr. Straw: My hon. Friend will be returned whence he came if he breaks the trial.
That gives me a cue to reply to a question that the shadow Home Secretary asked me, to which I omitted to reply. The right hon. Gentleman asked about our previous position. We were sceptical about tagging when it started—as were plenty of others—and, what is more, we were right to be sceptical, because the original trial failed comprehensively. Let me make it clear, however, that we supported the scheme when we were in opposition. During our consideration of the Crime (Sentences) Bill last year, the right hon. Member for Penrith and The Border (Mr. Maclean) thanked the Under-Secretary of State for the Home Department, my hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth), for agreeing that
"electronic tagging, although not a panacea, has a part to play."—[Official Report, Standing Committee A, 28 November 1996; c. 223.]
Mr. Graham Brady: I trust that electronic tagging of Labour Members will contribute to their early release.
On a serious note, does the Home Secretary agree that if someone is robbed in the street, a woman is raped or a child is abused, it makes no difference whether the attacker is tagged or not? Will the right hon. Gentleman reassure the House and the public that no violent or sexual offender will be released early because he has taken part in the electronic tagging scheme?
Mr. Straw: I understand the hon. Gentleman's point. The evidence suggests, however, that the tagging system, which will involve a curfew of at least nine hours during the period when people are most likely to commit criminal offences—in the evening and at night; the period is typically 12 hours, but in some cases it is longer—can be very effective. It has been used effectively in respect of some serious sexual offenders on their release from prison.

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The arrangement will apply only to short-term prisoners. I accept that some may be in the categories that the hon. Gentleman mentioned, but there will be a risk assessment in every case. If an individual has a clear propensity towards violence or the commission of sexual offences, it is very unlikely that he will be released on those terms.
An important part of the scheme, which I think will make it much more enforceable than it would be otherwise, is that not only will an offender who breaks the tag face the immediate prospect—not only the risk—of being taken straight back to prison, but, when he gets there, he will be at the basic entry level to prison regimes, rather than at the enhanced level at which he would typically qualify for risk assessment.
Ms Hazel Blears: As I represent one of the areas in which new prisons are likely to be built, I obviously have a great interest in trying to reduce pressure on overcrowded prisons. The people of Salford would welcome a reassurance from my right hon. Friend that his proposals will not result in the release of dangerous prisoners into the community, and that there will be intense supervision of those who are subject to the proposed measures. Will he give that reassurance? Local people need to be reassured that their communities will continue to be safe.
Mr. Straw: My hon. Friend is exactly right: the measures will not result in the release of dangerous offenders. They may result-I hope that they will-in more prisoners who are released going straight, getting jobs and finding a way of leading more orderly lives.
Let me also tell my hon. Friend, whose constituency I know well, that Salford has been ravaged by crime, particularly crime committed by youngsters who are out of control. I believe that the introduction of tagging in the other contexts that I have mentioned-as part of a sentence-will make a big difference in assisting the community in Salford, and helping the police to ensure that curfews that are imposed either as a condition of bail or as a result of a court sentence are enforced effectively.
Mr. Ian Cawsey: I welcome the statement. As one who spent the last four years chairing Humberside police authority, I know that police authorities, as well as probation services and prisons, will also welcome it, although they will be a little saddened—if not surprised-by the Conservatives' hostility. They will not be surprised, because of the way in which earlier Governments have treated them during the past few years.
Does my right hon. Friend agree that tagging is a positive step for the reintegration of offenders and an effective tool for dealing with anti-social behaviour, which blights the lives of thousands of people and was completely ignored by the previous Government? Does he further agree that tagging is an effective way to get people early release from prison and a much more effective policy than that of the previous Government which, if I recall it right, was pre-senile dementia?
Mr. Straw: My hon. Friend is right. Tagging is a positive measure and an effective tool for anti-social
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behaviour. One of the issues that frustrate the police most about offenders who have been given custodial sentences is not knowing where they are at particular times of the day or night. Tagging ensures that the police and the contractors can track their behaviour. Above all, it should ensure, as many offenders now acknowledge, that offenders can begin to lead orderly lives in the community. Prison is necessary, but the problem is that it does not teach decision making for the kind of decisions that offenders have to take when they come out.
Mr. Owen Paterson: Having boldly stated his full responsibility for the Prison Service, will the right hon. Gentleman assure the House that he will resign if any criminal who has been convicted of a serious violent crime escapes from prison or breaks his tag?
Mr. Straw: I am going to decline the invitation. I do not think that any prisoner who has been convicted of a serious sexual offence will in any sense be a candidate for this kind of system.
Mr. Tony McNulty: I welcome the statement. Will my right hon. Friend ensure that public confidence-building measures, which are crucial to all effective community sentences, are in place? Does he agree that we might be better served by far by the Conservative party—[HON. MEMBERS: "Reading."] What am I reading? The floor? [Interruption.] I shall continue when the children have settled down. We might be better served if, rather than indulging in the politics of the gutter, the Conservative party helped us in the fight against crime in those confidence-building measures to ensure that we benefit the entire society and that tagging is a success.
Mr. Straw: My hon. Friend is more optimistic about the quality of the Opposition than I am. I do not see much prospect of the Conservative party becoming constructive. There is an obvious answer to the question that was posed by the hon. Member for Havant in that excellent tract which I recommend to all Conservative Members, "Is Conservatism Dead?" The answer, as we have seen from today's episode 15 of the serial, is yes.
It is crucial that public confidence in community punishments is increased. One of the ways by which we aim to increase it is by the use of demonstration projects, one of which is being undertaken in Shropshire. They aim to provide the sentencers, magistrates and Crown court judges with far better information about the effectiveness of community punishments than they currently receive.
One of the major problems at all levels of the criminal justice system is that it operates in self-contained, hermetically sealed compartments with insufficient information being transmitted from one part to another.
Ms Beverley Hughes: Does my right hon. Friend share my disappointment at the response of Conservative Members which does not seem to be based on the findings of the research into trial areas? Among other things, they showed a high degree of control of offenders who were subject to electronic monitoring. Moreover, they showed a great deal of confidence by sentencers in using the system as an alternative to custody.
Does my right hon. Friend expect, as I do, that the proposal may show itself to be a much more effective transition from prison to the community and that it will

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enable people to avoid offending in future? Is he aware that I understand that all Conservative Members are also to be issued with electronic monitoring equipment? Can he arrange a risk assessment for each of them?
Mr. Straw: On the last point, I take what my hon. Friend says as true. The only difference between our system and the Conservative party's system is that ours works—the Conservatives' will not.
My hon. Friend comes to this issue with much professional experience in dealing with offenders, and her wisdom needs carefully to be listened to. If we are to make this country safer, the crucial thing is, first, to punish offenders, but, secondly, to do our best to ensure that they lead more orderly lives. One way—it is only one—in which we can do that is to secure for short-term offenders a better transition between prison and life outside through electronic tagging.

Business of the House
4.10 pm
The President of the Council and Leader of the House of Commons (Mrs. Ann Taylor): With permission, Madam Speaker, I wish to make a statement about the business for next week.
MONDAY 24 NOVEMBER—Conclusion of consideration in Committee of the Greater London Authority (Referendum) Bill.
TUESDAY 25 NOVEMBER—Second Reading of the European Parliamentary Elections Bill.
WEDNESDAY 26 NOVEMBER—Until 2 pm, there will be debates on the motion for the Adjournment of the House.
Until about 7 pm, Third Reading of the Greater London Authority (Referendum) Bill.
Remaining stages of the Special Immigration Appeals Commission Bill [Lords].
Consideration of Lords amendments to the Plant Varieties Bill.
THURSDAY 27 NOVEMBER—Consideration in Committee of the European Communities (Amendment) Bill [First Day].
FRIDAY 28 NOVEMBER—Private Members' Bills.
The provisional business for the following week will be as follows.
MONDAY 1 DECEMBER—Opposition Day [5th allotted day].
There will be a debate on an Opposition motion, subject to be announced.
TUESDAY 2 DECEMBER—Consideration in Committee of the European Communities (Amendment) Bill [Second Day].
WEDNESDAY 3 DECEMBER—Until 2 pm, there will be debates on the motion for the Adjournment of the House.
Consideration in Committee of the European Communities (Amendment) Bill [Third Day].
THURSDAY 4 DECEMBER—Debate on the European Union on a motion for the Adjournment of the House.
FRIDAY 5 DECEMBER—Debate on welfare to work on a motion for the Adjournment of the House.
The House will also wish to know that on Tuesday 25 November there will be a debate on biotechnological inventions in European Standing Committee B.
On Wednesday 26 November there will a debate on food law in European Standing Committee A, and a debate on harmful tax competition in European Standing Committee B.
The House will also wish to know that it is proposed that on Tuesday 2 December there will be a debate on tobacco advertising in European Standing Committee B, and on Wednesday 3 December there will be a debate on part-time work, European works councils and parental leave in European Standing Committee B.
Details of the relevant documents will be given in the Official Report.
I do not usually announce in advance that there will be statements in the House, but it might be for the convenience of the House if I confirm that the Chancellor of the Exchequer will make a statement on his pre-Budget report on Tuesday next week.
[Tuesday 25 November:
European Standing Committee B—Relevant European Community document: 10510/97, Biotechnological Inventions. Relevant European Legislation Committee report: HC 155-v (1997–98).
Wednesday 26 November:
European Standing Committee A—Relevant European Community documents: 8150/97, Food Law; 8386/97, Consumer Health and Food Safety. Relevant European Legislation Committee reports: HC 155-ii (1997–98) and HC 1550-v (1997–98).
European Standing Committee B—Relevant European Community documents: COM(97)564 and 10427/97, Harmful Tax Competition. Relevant European Legislation Committee report: HC 155-viii (1997–98).
Tuesday 2 December:
European Standing Committee B—Relevant European Community documents: 6294/97 and Unnumbered, Tobacco Advertising. Relevant European Legislation Committee report: HC 155-vii (1997–98).
Wednesday 3 December:
European Standing Committee B—Relevant European Community documents: 10230/97, Part-Time Work; 10975/97, European Works Councils; 10975/97, Parental Leave. Relevant European Legislation Committee report: HC 155-vi (1997–98).]
Mrs. Gillian Shephard: I thank the right hon. Lady for her statement. As I said last week, it is greatly for the convenience of the House to have the draft business for the second week. I thank her also for giving information about the European Standing Committees and, in particular, the advance notice of the Chancellor's statement. That is very helpful for the House.
As the right hon. Lady may recall, last week, I expressed disappointment that the Minister without Portfolio had appeared before the House only once in the past six months and then only for five minutes. Will she please arrange for another and early occasion for the Minister to make a statement to the House, to explain his extraordinary speech yesterday to a Post Office and Civil Service College conference? Commenting on the Government's handling of what we have learnt to call the Bernie crisis, he said:
"We acted against our own principles—that honesty is the first principle of good communications".
The right hon. Lady will readily realise that such a statement was either an admission or an accusation of dishonesty on the Minister's part. Which was it? I think that we should be told.
As Leader of the House, the right hon. Lady must be aware of the extraordinary treatment of the House by the President of the Board of Trade. The right hon. Lady has not appeared in the House for a debate since June and was even absent from her Department's oral questions today, which means that she will not have answered a question in the House between July and December. Will the Leader of the House arrange for her right hon. Friend to appear in the House next week, first, to reassure us of her continued existence and, secondly, to answer questions on the duties of Ministers in the Department of Trade and Industry and to explain the issues and industries that they can and cannot handle, given their interests?
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Such an occasion will enable the President of the Board of Trade to explain to the House when the Minister for Trade and Competitiveness in Europe sold his shares in BP and to which charities the shares were given.
Will the right hon. Lady tell us whether there is any authority or body that can prevent a member of the House from carrying out parliamentary duties on behalf of his or her constituents? If there is not, why have we not seen the hon. Members for Glasgow, Govan (Mr. Sarwar) and for West Renfrewshire (Mr. Graham) recently? Can the right hon. Lady tell us when they were last here and explain to the House what are the rights of constituents who elected them to represent their interests in the House? In the absence from the House of their elected Members, how are those rights being safeguarded?
Will the right hon. Lady comment on the almost incredible bill—some £330,000—casually run up by the Lord Chancellor for the redecoration of his apartments? The new wallpaper alone—we must call it the people's wallpaper—cost £60,000. Is not that the world's most expensive former fat-cat basket?
Mrs. Taylor: I thank the right hon. Lady for her comments about the extra information that I have been able to give. I shall endeavour to give the House as much forward information as possible, but I hope that the right hon. Lady and others will realise that it may not be possible on all occasions.
In respect of the comments of my hon. Friend the Minister without Portfolio, I would say that I wish that Conservative Members had been as open about their funding position as Labour Members have been. Over the years, that would have saved us a great deal of trouble.
My right hon. Friend the President of the Board of Trade was absent from parliamentary questions today because she was fulfilling an engagement, the date of which was set by the previous Government, which involved opening a trade fair in Australia. The date could not be changed because the preparations had been made so far in advance. On the duties of other Ministers, it was made clear again at Question Time that there are no problems with the interests of any of the Ministers in the Department of Trade and Industry, which is what we would expect.
The right hon. Lady asked about the attendance of hon. Members in the House. I believe that that is a matter between them and their constituents.
The right hon. Lady asked about the Lord Chancellor's official residence. I think that you, Madam Speaker, will be particularly aware that only two residential apartments in the Palace of Westminster have been preserved and renovated to the standard that we would expect. The Lord Chancellor's accommodation is being changed in a way that was approved some time ago by the House of Lords Administration and Works Sub-Committee. It is a new arrangement that part of that apartment will be open to the public. We would expect work done within the Palace of Westminster to be of a high standard.
Mr. Gordon Prentice: Is my right hon. Friend aware that on Tuesday this week the British Medical Association published a report calling for the legalisation of cannabis derivatives for medical use? The BMA described that as a landmark statement. is not there a case for Health Ministers or Home Office Ministers to come

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to the House at an early stage to tell us about the Government's response to that important BMA document?
Mrs. Taylor: I do not think that there is any reason for a statement on that matter in the near future. My hon. Friend will be aware that procedures are laid down for the testing of any potential medicine. It is always open to drug companies or others to apply for licences, and that can be done for cannabis derivatives. I think that derivatives called cannabinoids have been tested, but there have not been the proper clinical trials to support a hasty decision.
Mr. Paul Tyler: Are the Government examining the various expressions of unease since the debate on Monday evening on the report of the Select Committee on Standards and Privileges—not about the verdict in that particular case, but about the methodology used? Many hon. Members think that there is an urgent need for a review.
I draw the right hon. Lady's attention to the comments of the right hon. Member for Maidstone and The Weald (Miss Widdecombe), who has suggested that a Speaker's Conference of all parties should address the issue. I am sure that the Leader of the House will accept that, in the light of the debate, hon. Members on both sides of the House are uneasy about the process of self-regulation.
Will we have an early opportunity to debate the benefit cuts that will be introduced by statutory instrument No. 1841? Has the right hon. Lady seen early-day motion 451, which has been signed by hon. Members from all parties and shows the considerable concern in the House about the matter?
[That an humble Address be presented to Her Majesty, praying that the Council Tax Benefit (General) Amendment Regulations 1997 (S.I., 1997, No. 1841), dated 28th July 1997, a copy of which was laid before this House on 30th July be annulled.]
Was the right hon. Lady involved in any way in the consultations with the management of the BBC on the scheduling of the Radio 4 programme "Week in Westminster", which is highly regarded by hon. Members and by opinion formers throughout the country? I draw her attention to early-day motion 458, which again, has been signed by senior Members from all parties.
Has there been any progress on the statement that we were expecting some weeks ago, and to which I referred during business questions two weeks ago, on bovine spongiform encephalopathy? The right hon. Lady will recall that my party asked the Government to set up a judicial inquiry into the shambles that occurred under the previous Government. We had hoped for an announcement by now.
Mrs. Taylor: On the hon. Gentleman's first point about the Standards and Privileges Committee, I am glad to have his endorsement of the decision that the House made on Monday night, which I felt was the right decision. I sat through the whole of the debate, so I am aware that there is unease about the methodology. However, there is also some concern, which I share, that we should not rip up the progress that we have made so far on the basis of one case, which, as I said on Monday night, I hope is the worst case with which the House has to deal.
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In the first instance, it is up to the Standards and Privileges Committee to consider any changes that it may wish to recommend to the House in respect of its procedures, so we should await any conclusions that the Committee reaches.
On the hon. Gentleman's point about the early-day motion and the social security regulations, discussions will take place through the usual channels in the usual way.
In respect of the BBC, representations were made some time ago. Concern was expressed not only by hon. Members on both sides of the House, but by Madam Speaker, who tried to make progress on that matter.
On BSE, the hon. Gentleman is aware of what we have said and he knows where the blame lies for the problems that we have inherited. I shall bring his further comments to the attention of my right hon. Friend the Minister of Agriculture, Fisheries and Food.
Mr. David Watts: Can my right hon. Friend explain why the first meeting of the Deregulation Committee has not taken place? Can she say when it will meet?
Mrs. Taylor: There has been a problem with the first meeting of the Deregulation Committee. It is the practice of the House for the most senior member of the Committee to call its first meeting. Although that has not happened yet, I can tell my hon. Friend that agreement was reached this afternoon, and I think that the first meeting will be called for Monday.
Mr. Eric Forth: May we have an early debate—it might be entitled, "The Terracotta Army"—arising from the remarks made in the House last night by the hon. Member for Brent, East (Mr. Livingstone)? He said:
"I would, in the more liberal times that prevailed in my party before the election, have joined the Liberal Democrats in the Lobby in support of their amendment, which comes closest to my own views but, as Labour Members know, shortly before the election, the standing orders of the Labour party were changed so that to vote against a Labour Government is now an offence against those standing orders and leads to withdrawal of the Whip and debarment from further candidature."—[Official Report, 19 November 1997; Vol. 301, c. 398.]
Surely that statement raises issues of the most profound parliamentary and constitutional weight. After those remarks, surely it must be time for the House to take an interest in the matter and attempt to liberate hon. Members of all parties from the tyranny that now seems to prevail in the Labour party.
Mrs. Taylor: I do not think that my hon. Friends need liberation with the help of the right hon. Gentleman.
Ms Helen Southworth: May we have an early debate or statement on the effectiveness of the summer literacy scheme, which today's report from the Qualifications and National Curriculum Authority states has demonstrably raised young people's motivation and enthusiasm for school and for reading? May we debate extending the scheme—so that it might benefit my constituency?
Mrs. Taylor: My hon. Friend raises an issue that is very dear to my heart, not least because Earlsheaton high

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school in Dewsbury ran one of the pilot projects. I saw for myself the benefit that the project brought to many children—not only, as she says, in motivation, but in reading ability. The Government have said that we wish to extend the scheme and allow other children to benefit from it. Although I do not think that a statement on the scheme's success is necessary, I am sure that hon. Members on both sides of the House will want to press for schemes next year in their constituencies.
Mr. Nicholas Soames: Last week, the right hon. Lady answered in a most dismissive manner an important question that I asked her, saying that she needed no lessons from the Conservative party. I was not trying to teach her a lesson in any sense, and I should be grateful if she answered my question in a reasonable manner. Does she not agree that for the Government to spend £750 million on the millennium dome without the sanction of or debate in the House is a monstrous, contemptible mistreatment of Parliament?
Mrs. Taylor: The hon. Gentleman should remember some basic facts, and I shall remind him of two. The first is that that type of expenditure will be audited. The second, very basic fact is that the expenditure was started under the previous Government.
Dr. Liam Fox: Will the Leader of the House arrange for an early debate on the workings of the Highways Agency—thereby not only allowing hon. Members to bring to light some of the problems with the M5 widening, which has caused many difficulties for hon. Members representing the south-west, but giving us a chance to investigate why the agency has allowed two years' work and £50 million of public money more for the contract than the independent consultants recommended? Important questions must be answered, as many hon. Members believe that all with that Highways Agency contract is not as it seems.
Mrs. Taylor: I am not aware of the problems with the contract or the scheme that the hon. Gentleman mentioned. He may wish to apply for an Adjournment debate or something of that type. I shall certainly bring his remarks to the attention of my right hon. Friend the Minister of Transport, because I cannot find time for a debate in the very near future.
Sir David Madel: Will the right hon. Lady re-examine the exchanges on 17 November, when the Government said that they could not introduce plans to reform and improve the Child Support Agency until next year? In my constituency, public confidence in the CSA is sliding again. Moreover, as we come near to Christmas, earnings rise because of bonuses and extra overtime, providing the CSA with another opportunity to get its calculations wrong. We simply cannot go on with the agency as it is. It has had chance after chance to get it right. Cannot the Government, after nearly seven months in office, produce something before Christmas to improve it?
Mrs. Taylor: I do not know whether the hon. Gentleman was present during business questions a couple
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of weeks ago, when there were several requests from Labour Members for a debate on the Child Support Agency and when I expressed my own dismay at the workings of the CSA. It is something of a cheek for Conservative Members to say that we should put right in seven months the problems created by the previous Government over many years. However, my right hon. Friend the Secretary of State for Social Security is attempting to make progress on the matter and, of course, we had a debate on the problems surrounding the CSA some time ago.
Mr. Brian Jenkins: Will the Leader of the House find time for an early debate on reports that members of the Conservative party are to be given psychological and psychometric tests to ensure that they are appropriate candidates for Parliament? Could not that involve us in some large-scale expenditure, in view of the redundancy payments necessary for many Conservative Members?
Mrs. Taylor: My hon. Friend makes a good point. It is tempting to follow his line of thought and consider what the outcome might be, but I think it would be better if I said that the internal arrangements for the selection of candidates are a matter for the Conservative party.
Mr. Andrew Robathan: Will the Leader of the House make time in the very near future for a debate on the purpose of the Register of Members' Interests? Given that in 1995 the now Deputy Prime Minister went to Silverstone and declared his visit, and that in 1996 the now Paymaster General went to Silverstone with his family and declared his visit, would not the Prime Minister relish the opportunity to explain why he believes that he is above the rules of the House, according to the advice that I am given, and failed to declare his visit in 1996? Would it not also give the Prime Minister the opportunity to declare the involvement of one David Ward, a professional lobbyist working on behalf of the FIA, and explain why a professional lobbyist wanted him to go to Silverstone?
Mrs. Taylor: I would hope that the purpose of the Register of Members' Interests was clear to all hon. Members. Of course, we now have a code of conduct, which should help to guide hon. Members on such matters. On the hon. Gentleman's wider point, I admitted last week that I thought that it was tempting to arrange a general debate on the funding of both political parties, and it is still very tempting.
Mr. Graham Brady: Given the Government's recent decision to refuse to hold a public inquiry into Manchester United's plans to build on 100 acres of farmland at Carrington Moss, will the Leader of the House call the Deputy Prime Minister to the House to explain the Government's new policy of not protecting green-belt land?
Mrs. Taylor: I do not think that there is scope for a debate on that matter in the near future. As I said last week, the Government are committed to their green-belt policy but, under this Government, as under the previous Government, every decision has to be considered on its merits.
Mr. Michael Fabricant: Will the right hon. Lady confirm her commitment to the Select

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Committee system? Does she agree that Select Committees have an important role to play, on behalf of Parliament, in investigating the activities of the Executive? In that connection, will she initiate an early debate on the role of Select Committees and undertake to read the transcript of yesterday afternoon's meeting of the Select Committee on European Legislation, when the Chairman tried to gag the three Conservative Members on that Committee and prevent them from asking questions which were in order and very, very pertinent?
Mrs. Taylor: I can confirm that I think that Select Committees are extremely important. I do not think that we need a debate on their role at the moment but, of course, the Select Committee on Modernisation of the House of the Commons intends to consider how best to use the talents of hon. Members, especially on Select Committees. As for what happened yesterday, if the hon. Gentleman is saying that his colleagues were capable of being gagged, it is a remarkable admission. I do not believe that the Chairman of any Committee of the House would deliberately seek to gag hon. Members.
Mr. Phil Hope: My right hon. Friend will be aware that the Government have announced a working party to develop citizenship education in schools. Will she allow parliamentary time for a debate on the importance of promoting that, in both formal and informal education? Many young people are alienated and disillusioned and do not feel connected to the political world that we inhabit. Is it not important to encourage, wherever possible, the involvement of young people, so that they have a greater say in decisions that affect their lives?
Mrs. Taylor: I am glad that my hon. Friend welcomes the establishment of the working party. I hope that all hon. Members agree that citizenship education is an important objective for schools. I cannot find Government time for a debate in the near future, but it might be possible to debate that, along with many other issues, when we consider forthcoming education legislation. Many hon. Members might be interested in contributing to the debate on how best to deliver such education. Perhaps my hon. Friend could apply for an Adjournment debate.
Mr. John Bercow: Will the right hon. Lady find time next week for a statement by the President of the Board of Trade? Following the press conference earlier this year by the Minister for Trade and Competitiveness in Europe, Lord Simon, it is vital that we should be told whether he has sold all his BP shares, when he did so, what profit he made from them and to which charity or charities that profit has been donated.
Mrs. Taylor: There is no need for a statement. It is striking how obsessive the Conservatives are on that issue, mainly because they cannot come to terms with the fact that senior business men support the Labour party.
Mr. Oliver Letwin: Further to that question, what does the Leader of the House regard as a reasonable attitude from Ministers to questions asked in the House? Some Conservative Members have been asking for some months for clear, simple details about the timing of the sale of certain shares. Those are matters of
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great public import. Will the Leader of the House give us and her colleagues some guidance on the standards that should be maintained in answering such questions?
Mrs. Taylor: If questions relate to matters covered by the code of guidance to Ministers, and the permanent secretary and the Cabinet Secretary are satisfied with the procedures that Ministers have adopted, there is no need for further questions.
Mr. Desmond Swayne: In an interview at the weekend, the Prime Minister expressed dissatisfaction that he could be thought capable of any wrongdoing. Will the Leader of the House provide time for a debate, so that the representatives of the people can express their apology to the dear leader and so that he might have the opportunity to explain why he alone among his co-religionists has escaped taint of original sin? Has he become a Pelagian?
Mrs. Taylor: I hardly think that that is worthy of an answer.
Mr. Owen Paterson: As a new Member, I understand that my main role is to ask the Executive pertinent questions. Since May, I have been astonished by the Government's refusal to answer questions. We had an appalling example yesterday, when the Prime Minister slapped down my hon. Friend the Member for Buckingham (Mr. Bercow). At Trade and Industry questions today, time after time questions were not answered. Could we have a full debate on the role of Question Time?
Mrs. Taylor: We have had a question at last. The answer is no.
Mr. Paul Burstow: Will the Leader of the House find time next week for hon. Members to debate disability living allowance and the review of disability benefits? Hon. Members have shown their interest in the issue by signing early-day motion 448.
[That this House is gravely concerned by the implementation of the benefit integrity project which is resulting in apparently arbitrary and superficial decisions currently being made to withdraw disability living allowance and associated benefits from many people with severe disabilities, some of whom had been awarded the benefit for life; and accordingly asks the Government to take urgent action to ensure that persons suffering from disabilities which prevent them from taking employment are treated sympathetically and that benefits are not withdrawn without proper reasons.]
Hon. Members have also signed early-day motion 483. They are clearly concerned on behalf of their constituents about the way in which the benefit integrity programme is proceeding and the fact that it is leading to the withdrawal of disability living allowance. They are concerned about current Government reviews, which could lead to cuts in the benefits or their removal. May we have a debate so that those matters can be aired and we can find out the Government's true intentions?
Mrs. Taylor: We had Social Security questions earlier this week, and I do not know whether the hon. Gentleman

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asked a question then. We have, of course, a duty to the taxpayer to ensure that all benefit payments are made correctly. The hon. Gentleman will he aware that there is a comprehensive spending review, and benefits for disabled people are part of that. There is nothing that we can usefully add at this stage.
Mr. Dennis Skinner: Is my right hon. Friend aware that if she acceded to requests for a debate on Ministers not answering questions in this House, I would be able to point out that Lady Thatcher's Government had a Secretary of State for Trade and Industry who did not answer a single question in this House, the reason being that he was not a Member of this House, but a Member of the House of Lords?
As I am in a helpful mood, will my right hon. Friend pass on to the Chancellor of the Exchequer before next Tuesday's statement the thought that as tax income has risen by about £10 billion in the first nine months of this financial year and as the lone parent premium costs only £65 million, the premium could be kept quite easily?
Mrs. Taylor: As my hon. Friend is in such a helpful mood, I guarantee that I shall pass his comments to the Chancellor who, I am sure, will deal with those matters on Tuesday.
Mr. Nick Hawkins: On a point of order, Madam Speaker. Following from what my hon. Friend the Member for North Shropshire (Mr. Paterson) said, we now have a point of order for your consideration. The Leader of the House has repeatedly refused to answer the questions put by my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) and by other Conservative Members. Should we not be given proper answers, especially to questions about the role of the Minister without Portfolio, the Secretary of State for Health and the Prime Minister? There has been no statement on the many unanswered questions arising from the Bernie affair and we have simply had refusals to answer at Prime Minister's Question Time. is it not clear that the Government have entirely ignored their role, which is to answer questions and not to meet them with other questions or to be dismissive?
Madam Speaker: The hon. Gentleman is trying to extend business questions. I do not think that he tried to catch my eye to put a question to the Leader of the House. As he and the House know, Ministers answer questions. They are responsible for their comments, which are nothing to do with the Chair. They are responsible for what they say in the House.

Public Accounts
4.42 pm
Mr. David Davis: I beg to move,
That this House takes note of the First to Twenty-fifth Reports of the Committee of Public Accounts of Session 1996–97 and of the relevant Treasury Minutes (Cm 3559, 3577 and 3714), with particular reference to the following Reports:
Second, Progress in Completing the New British Library (HC 38);
Fifth, Highways Agency: The Bridge Programme (HC 83);
Eighth, Information Technology Services Agency: Outsourcing the Service Delivery Operations (HC 98);
Thirteenth, HM Treasury: The Second Sale of Shares in National Power and PowerGen (HC 151);
Sixteenth, The Work of the Directors General of Telecommunications, Gas Supply, Water Services and Electricity Supply (HC 89);
Twenty-second, British Rail Maintenance Ltd.: The Sale of Maintenance Depots (HC 168).
This is a unique occasion in that it is the first time in the history of the modem Public Accounts Committee that the motion has been moved by anybody other than my predecessor, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). It will become apparent that I hold the right hon. Gentleman in great esteem, admiration and affection. He held the post of Chairman of the Public Accounts Committee for a record 14 years, during which he presided over the publication of almost 600 reports, all of them unanimous.
The right hon. Gentleman developed a formidable reputation based on hard work, good judgment and fearless tenacity in pursuing public officials who wasted or mis-spent taxpayers' money. All his reports made a significant contribution to better government and better service for the taxpayer. If I have to pick out one report, it is the seminal eighth report of 1994. It investigated the standards of conduct in public life and set out the measures needed to uphold integrity and competence. I look to that report as a benchmark for the future.
As the only Chairman since the National Audit Act 1983, my predecessor has been the man most responsible for the power and effectiveness of the Public Accounts Committee in its modem form and for the respect in which the Committee is held today. I shall consider myself successful if I can even approach the standard the right hon. Member for Ashton-under-Lyne has set. All in the House will join me in thanking him for his sterling work over many years.
I am fortunate in several other regards. First, the Committee has the formidable asset of the National Audit Office under the capable command of the Comptroller and Auditor General. The NAO does an extremely effective if somewhat unsung task in scrutinising the Government's accounts. The Comptroller and Auditor General, Sir John Bourn, has done a first-class job in enhancing the professionalism and the professional recognition of the NAO in recent years. The Northern Ireland Comptroller and Auditor-General, John Dowdall, and his staff in the Northern Ireland Audit Office have also done a very good job in the uniquely difficult conditions in Northern Ireland today.
The Committee is very fortunate in its excellent Clerk, Mr. Ken Brown, who has steered the neophytes of the Committee, including me, through the ocean of documents that the Committee receives. We are all very grateful for his skill and patience.

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Judging by the first few meetings, I am also fortunate to have an outstandingly capable Committee—terrifyingly so, sometimes. My only concern is that the members are so good that I shall lose rather a lot of them to Front-Bench posts before long. I must tell the hon. Member for Leeds, East (Mr. Mudie), who is the Whip today, that given their interrogation skills some of them may end up in the Government Whips Office.
I welcome the Financial Secretary to the Treasury as an ex officio member of our Committee. I do not think that I am speaking out of turn when I tell her that she has been described in many ways in the Committee already. She has been referred to as our fairy godmother at the Treasury and, on a rather more aggressive note, as someone who might give a new meaning to the phrase "dawn raid". We shall see.
The Public Accounts Committee has existed since 1861, when it was created by Gladstone who was then Chancellor of the Exchequer. Throughout its history, it has been a powerful and effective force for good in British public life. It has been no small contributor to the outstanding international reputation for integrity and competence that has, rightly, long been held by British public servants.
What the Committee stands for is still highly relevant today. First, it stands for propriety and integrity in the administration of public affairs. The importance of that barely needs restating in modern times. Secondly, it stands for keeping tight control over the expenditure of taxpayers' money. In an era in which most political parties recognise the importance of low taxes, that is a vital function. Thirdly, the Committee stands for value for money in service delivery. That has been at the centre of a huge amount of policy innovation in many countries, including the United States, New Zealand and, in recent years, the United Kingdom. The 1983 Act was ahead of its time in that it recognised the importance of the measurement of service delivery—the efficiency and effectiveness criteria. I expect the new Committee, as was true of the previous Committee, to deal with a growing proportion of cases that deal with how well the Government deliver public services.
The previous annual debate on the subject took place on 16 October 1996 when the motion encompassed 48 reports and the associated Government replies. This year's motion covers 25 reports agreed by the previous Committee before the general election and the replies are those of the previous Administration.
The sheer number and technical complexity of the reports can make drawing useful lessons difficult; it is easy to lose sight of the wood for the trees. It is a little simpler if we divide the Government's public service delivery into three stages or phases. The first is the acquisition of assets and services, the second is the operation and delivery of those public services and the third is the redeployment and/or disposal of those assets and services.
The first phase includes project management, the acquisition of buildings and major equipment, the procurement of supplies and services, the contracting out and outsourcing of public sector activities and private finance projects. The second phase involves an emphasis on service for the customer, including the timely and effective delivery of services, the regulation of service providers, management and control processes, target setting and
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performance measurement. The third phase—asset redeployment and disposal—covers the effective use of assets, the disposal of surplus assets and property, and privatisation.
Those phases cover the full cycle of how Her Majesty's Government acquire assets, employ them to provide public services, and analyse, redeploy or otherwise dispose of them. Each phase can lead to a different type of problem and a different lesson to be learnt. In each phase, we in the PAC look for good practice to encourage and disseminate, bad practice to discourage and eliminate and improper practice to condemn and punish. In short, in each phase we look for the good, the bad and the ugly aspects of public service.
I shall start with the acquisition of assets and services. The best example of good practice that the Committee considered last year has not progressed to a public report, so I cannot properly debate it at length. I can however direct the House to the National Audit Office report on the management of utilities by the Ministry of Defence, which demonstrated the advantages of procuring services competitively. It demonstrated millions of pounds of savings in the procurement of electricity and the proposal to extend such competitive processes to other service acquisitions, particularly gas. The Committee's report on this subject will be published shortly.
The report in this area that has been published is that on the outsourcing of service delivery operations by the Information Technology Service Agency—the eighth report. It shows the potential financial benefits of outsourcing the activities of public bodies and the need for strong contractual provisions to allow effective monitoring and control of contractors' performance.
The service delivery operations of the Department of Social Security's Information Technology Service Agency mainly cover the operation of computers on which social security benefits are calculated and administered and which produce giro cheques and order books. The contracts are worth £577 million over 10 years and were placed in 1995 with three separate firms. The Department estimated that it would save £399 million through outsourcing those services.
The Committee was surprised at the difference of £399 million between the agency's costs over 10 years and the contractors' price and concluded that there must have been substantial inefficiencies in the agency prior to outsourcing. I suspect that many permanent secretaries around Whitehall see a PAC inquiry as a no-win game. Perhaps they think that the PAC always sees a half-full glass as half empty. I have some sympathy with them in this case, but a £399 million saving is just that: a £399 million saving. That is why I list it as a good example.
That being said, the Committee agreed with the Comptroller and Auditor General that the agency needed to monitor the contractors' performance closely and make full use of contractual provisions to control price increases. There were already potential increases in the pipeline of £74 million as a result of increases in volume of business and changes of specification. There was a need for control and monitoring and the agency accepted that.
The Committee was also surprised—rightly—that the agency was not able to tell it what safeguards contractors had in place to prevent the use of benefit claimants'

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records for financial gain and recommended that the agency seek specific information and assurances from contractors in that regard. Again, the agency has done that.
The bad example under the heading of acquisition of assets—the example to avoid—is in the Committee's second report, "Progress in Completing the New British Library". The report illustrates the dangers of failing to define adequately responsibilities for major procurement projects. The Committee observed that it was unacceptable that responsibility for the construction of the library was not vested in a single Department until 1992 and that the project management arrangements had been far too complicated so that responsibilities could not be clearly attributed to individuals.
The effect of those errors contributed to unacceptable delays of more than four years before the building could be opened to the public. They also led to a reduction in the scale of the completed building and a cost increase of £115 million in the first phase of the project. There is little better way to summarise that than to quote the Committee's report, where it says that the new British library
"could be used as a model of how not to manage a major construction project".
Now to the ugly aspects. The clearest issue of propriety was raised by the Committee's 12th report, "Overseas Development Administration Turkish Universities Equipment Project". It demonstrated the importance of proper controls and effective monitoring of bodies involved in public sector transactions to protect against potential conflicts of interest which could lead to impropriety.
In 1991, the ODA agreed to provide £23 million in support of a contract between the Turkish higher Education Council and a United Kingdom company, TecQuipment, for the supply of facilities to engineering faculties in 28 Turkish universities. A number of conflicts of interest arose. TecQuipment was not only the project manager but the supplier of equipment and the adviser to the Turkish Higher Education Council. Fisons assisted TecQuipment to secure a bank guarantee and bid to supply equipment. Another company, Sangari International, acted for TecQuipment as well as for a number of other suppliers to supply goods.
The Committee was—not surprisingly—disturbed that so many conflicts of interest had arisen in one project. It was especially concerned that TecQuipment had significant overlapping roles in the project and was therefore potentially in a position to influence the placing of contracts in its favour. The Committee commented:
"such conflict gave rise to potential dangers for the taxpayer, not only in terms of value for money but of propriety in the use of public money."
It acknowledged that the ODA had learnt a number of lessons from the project and that action had been taken to implement them, but it was disturbed that such basic lessons had to be learnt by a Department that has so much experience in administering aid projects. I agree with that conclusion.
I come now to the operation and supply of public services. The first good example in this area is in the Committee's 16th report, "The Work of the Directors
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General of Telecommunications, Gas Supply, Water Services and Electricity Supply" which demonstrates the importance of effective regulation of privatised industries to protect the interests of customers. The report covered four directors general responsible for regulating the telecoms, gas, water and electricity industries, which between them use assets valued at £240 billion. In 1994–95, they had a combined turnover of £51 billion. The regulators were appointed due to the limited competition in the industries.
The Committee noted that all the directors general were taking action to promote competition in their respective industries and expected competition to provide customers with greater choice, better service and increased value for money. It welcomed the reductions in prices in real terms that had occurred in the telecoms, gas and electricity industries, but noted that, in the five years immediately after privatisation, before current regulation arrangements were in place, the water companies made profits totalling £7.4 billion. The Committee also noted that average water and sewerage bills increased in real terms by 40 per cent. and 37 per cent. respectively and that the Director General of Water Services attributed increases to the need for investment to improve water quality while expressing concern over future profit levels.
The Committee recommended that the directors general impress on companies the risk that they faced through loss of public confidence and trust if they paid excessive emoluments to top executives. The directors general recognised the widespread public concern about the level of executive remuneration.
The example of bad practice in the supply of services is best seen in the fifth report, "Highways Agency: The Bridge Programme". The Committee expressed concern at the slippage in the programme for assessing and, where necessary, strengthening bridges to meet the European directive to carry 40-tonne lorries from January 1999. The slippage in the programme, which the National Audit Office brought to light, has meant that the UK will comply with the European directive only by using temporary measures to strengthen some bridges. That is likely to result in traffic restrictions on some bridges and inconvenience and congestion for road users. It may lead to extra costs in temporarily propping bridges until such time as they can be permanently strengthened.
The Committee also highlighted failures in programme management, including a shortfall in the number of bridge inspections, failure to compare the costs of doing similar work across the country and a lack of accurate national information on the condition of bridges and the progress of the programme. All contributed to the failure to keep costs and progress under closer control and, therefore, gave a serious lesson in bad management and programme control for the rest of the Government.
The ugly issue of service supply is the question of propriety that arose in the 14th report on "Financial Control of Payments Made Under the Training For Work and Youth Training Programmes". It demonstrated the importance of ensuring that strong financial controls operate in the bodies funded by Government Departments to provide public services. The training programmes are managed by 74 training and enterprise councils, which are private companies operating under contract to the Department for Education and Employment.

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For the most part, TECs subcontract the provision of training to training providers, including local authorities, voluntary bodies and private companies. The Committee examined the handling by the Department for Education and Employment of allegations of irregular payments, the financial control of payments to TECs and training providers and the steps taken to secure value for money from the programme. The Committee was concerned that £150,000 had been overpaid by the Department to Cumbria TEC because of irregular claims from a training provider and that overpayments of £231,000 were made to Durham TEC in respect of claims made by another provider. It found deplorable the fact that money that should have been spent on equipping people with skills for work had been siphoned out of the system in this way. It is hard to disagree. The Committee expressed concern that as many as 71 cases of suspected and alleged irregularity had been recorded by the Department for Education and Employment since 1995, of which 41 had been investigated and only one referred to the police.
On the public accountability framework in which the Department and the TECs operate, the Committee asked the Comptroller and Auditor General whether he would be prepared to be the external auditor of TECs, which derive most of their income from public funds. The Committee welcomed his positive response and I will return to that subject when I deal with the issue of access.
The third phase of Government activity is asset redeployment and disposal. The best example of that is described in the Committee's 13th report on "The Second Sale of Shares in National Power and PowerGen" and it provided an example of a well-managed sale of Government assets by the Treasury. It demonstrated the significant advantages that can be gained by selling public utilities in stages if the market is uncertain at the time of privatisation. The Committee welcomed the fact that additional proceeds of some £2.3 billion were raised by not selling all the shares in 1991. That was consistent with the Committee's long-held belief that when the market value of the shares was uncertain it could be advantageous to the public purse to conduct such sales in stages. That was what was done and it was a very good example to the Treasury for future privatisations.
The bad example in this category is described in the 22nd report on "British Rail Maintenance Ltd. The Sale of Maintenance Depots", which demonstrates the need to undertake proper valuations of assets prior to disposal and to ensure the extraction of cash before the sale to maximise the return to the taxpayer. The Committee expressed regret that the then Department of Transport did not ensure that the comprehensive valuations of maintenance depots were carried out and strongly recommended that vendors carry out valuations in advance of sales. The Committee was also concerned that cash was not extracted prior to sale, allowing £13 million to accrue to the purchasers. Both those points are straightforward and should automatically apply to every such sale throughout government.
I have described only a few of the past reports and achievements of the Public Accounts Committee. My predecessor and his team did an excellent job promoting the good, highlighting the bad and exposing the ugly. The new Committee has every intention of following in their footsteps, but I would especially like the Committee to pursue the efficiency and effectiveness criteria and seek out ways to enhance the Government's delivery of high
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levels of public service at the best possible value for money to the taxpayer. There is still work to be done to enhance further our capabilities as a Committee to that end. That brings me to the question of access.
It may surprise the House to learn that the Comptroller and Auditor General does not have automatic access to all areas of Government expenditure. To achieve what we are setting out to do, we need to improve the Comptroller and Auditor General's access powers to all bodies that spend public money and deliver public services. For example, for some large and important bodies such as the Legal Aid Board—which does not have that brilliant a record and which spends more than £1.3 billion of public funds a year—the auditor is appointed by the Lord Chancellor. The Comptroller and Auditor General has to rely on inspection rights to report to Parliament.
Other bodies, such as housing associations—which spend £1.8 billion a year—appoint their own auditors and the Comptroller and Auditor General has to negotiate to obtain access on a case-by-case basis. At the worst end of the spectrum, some important public services are under contract to private firms. Camelot is the biggest and has the highest profile of such bodies, but the Comptroller and Auditor General has been refused the access he needs to confirm that its systems are operating properly and that the income to the national lottery distribution funds is complete.
We should deal with the problem of access and I shall discuss how that can be done. First, the so-called executive non-departmental public bodies—I hope that the House will forgive me for spelling that out, but they are normally known as quangos—should be dealt with by making the Comptroller and Auditor General responsible for the audit in all cases. That would include the Legal Aid Board, the Housing Corporation and 140 other bodies covering some hundreds of millions of pounds. Secondly, we should deal with so-called local spending bodies by providing independently guaranteed rights to the Comptroller and Auditor General. That would cover TECs and housing associations.
Thirdly, the functions provided by contractors should be covered by providing independently guaranteed rights in all cases to the Comptroller and Auditor General that are at least equivalent to the powers of the European Court of Auditors. Some £6 billion of public money is spent through contractors already and it is a serious anomaly that the Comptroller and Auditor General of the House is not in at least as good a position as the European Court of Auditors. The private finance initiative, for which I understand the Government have great plans, will make that issue even more important.
Finally, for publicly owned companies—companies owned by public bodies or the state in large part or in total—we should allow the Comptroller and Auditor General to undertake the audit. Some 200 such companies have been set up in the past few years and the Companies Acts preclude the Comptroller and Auditor General from auditing them. We will need legislation, when we next have a Companies Bill, to correct that.
Those are general issues, but I wish to address another, perhaps more controversial, aspect of access. Our predecessors examined the estate management of the royal palaces in occupation, including Buckingham palace, Windsor castle, Kensington palace and St. James's palace, originally as a result of the public funding of the repair

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of damage caused by the fire—five years ago today—at Windsor castle. The Committee received reports from the Comptroller and Auditor General on that and related matters, based on examination by the National Audit Office of the Department of National Heritage's monitoring records and related correspondence. The reports were not based on a direct examination of the books and records of the royal household because the Comptroller and Auditor General has no right of access to them. That said, to be fair to the royal household, it did assist the Comptroller's study and supplied information and statistics to staff of the NAO. In addition, the director of finance attended the Committee's meetings, but this is insufficient.
It is a principle of audit and of parliamentary Supply that Parliament's auditor, the Comptroller and Auditor General, should have direct access to papers and people, rather than have to depend on the willingness of those whom he is auditing and the papers they choose to make available. That cannot be right.
The Government often provide for access to funding bodies outside, but they do not have to and can, as in this case, decide not to. We are not talking here about the private matters of Her Majesty the Queen and, as a confirmed and committed monarchist, I would not countenance such an idea in any event. I must say, en passant, that I got as much pleasure as everyone else from the pictures in today's newspapers and, for once, I agreed with the Prime Minister's words. The royal family is making great efforts to increase transparency and openness in its affairs. Those efforts will strengthen public support for the monarchy and we can all applaud them. Our proposals go entirely with the grain of those efforts.
We are talking about a departmental grant in aid of £20.4 million of taxpayers' money in 1995–96, given to the royal household to run the functions of the monarchy, including the maintenance of properties and gardens that form part of Britain's heritage, grace and favour residences and their rents and remuneration for public servants who work for the Queen. Wherever these are financed from public money, it is in the interests of Her Majesty the Queen and Parliament that the usual principles of access for the Comptroller and Auditor General should apply.
The consideration of this matter was not concluded by our predecessors and my colleagues and I must consider it and associated issues, including the civil list, where the Comptroller and Auditor General, and hence the PAC, is excluded.
Taken together, the general increases in access would allow the Comptroller and Auditor General to follow public money wherever it goes and to report to Parliament whether that money has been used as intended and in line with the proper conduct of public business. That does not mean that there would be a greater burden of audit and regulation; indeed, it would reduce the total audit burden on quangos or executive non-departmental public bodies. Elsewhere, it would rationalise unnecessary bureaucracy.
A series of critical questions are posed by the Government's devolution measures. It is important that devolution does not diminish the PAC's oversight of the £21 billion a year that is to be granted to the Scottish Parliament and the Welsh Assembly. Effective audit and
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accountability arrangements are needed to ensure robust practices for financial management and accountability. Audit arrangements should provide for independence without the mushrooming of auditors and regulators.
The Committee needs to be able to consider issues involved in the administration of the new Parliament and Assembly; for example where a breakdown in financial control occurs. The Comptroller and Auditor General will need continued access to support the Committee in considering these issues.
In recent years, there has been some concern at the proliferation of regulators, inspectors and auditors of public services. I have some sympathy with that view. Oversight bodies such as the PAC and the NAO must continually justify their existence. To that end, I shall finish with a short review of the impact of the work of the previous Committee. Over the past year, 92 per cent. of the recommendations made by the PAC have been accepted by the Government. In 1996, audited bodies made around 2,600 significant changes to their systems and procedures as a result of recommendations in the reports of the PAC and the NAO.
As a result, the PAC and the NAO saved the taxpayer more than £900 million in the past three years—more than £7 for every pound spent on running the NAO. Beyond that, advice and guidance on good practice provided by the reports of the Committee and the NAO have a further impact that it is not possible to quantify, but provide long-lasting savings as well as benefits to the quality of service and the governance of public bodies.
Perhaps I may finish as I began: all of this arose as a direct result of the excellent work done by my predecessor as Chairman, the right hon. Member for Ashton-under-Lyne, and his Committee and from the excellent relationship they maintained with the Treasury. I look forward, as I am sure do my colleagues on the Committee, to equally hard work and, I hope, an equally good relationship with the present Financial Secretary.
5.15 pm
Mr. Robert Maclennan: I would like to begin by echoing the words of the new Chairman of the Public Accounts Committee, the right hon. Member for Haltemprice and Howden (Mr. Davis), in paying tribute to the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), whose distinguished 14-year-long chairmanship gave the Committee a degree of solidity and a reputation for assiduity in its supervision of the public expenditure of the previous Administration.
The Committee that the right hon. Member for Haltemprice and Howden has the honour of chairing has acquired its reputation in no small part because of its traditional ability to reach consensus and produce unanimous reports; it is the Committee least scarred of any by cross-party tensions. I value that, and it must be the way in which the Committee continues in the future.
In wishing the right hon. Member for Haltemprice and Howden all success in the discharge of his new job, I express a little wry internal amusement that someone who conducted himself in the Foreign Office—perhaps the least contentious Department—with a degree of combativeness that was not characteristic of Ministers in that Department may find the ambience of the PAC somewhat different, although no doubt challenging.

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The right hon. Gentleman comes to his new job with the good wishes of all who serve with him, and I have been greatly encouraged by his opening remarks this afternoon. He homed in on the critical questions of policy: how the work of the Committee should be conducted; how it should be valued; and how the audit of public spending should be conducted. I particularly agree with his concluding remarks about access, a point repeatedly made by the previous Chairman and members of the Committee, on which I had the honour of serving for a number of years.
It is right that the National Audit Office should follow public money wherever it goes. That broad principle is one that I hope will inform the Government in their review of the work of quangos, initiated in a recent consultation paper. It must be right to start, as the Chairman of the Committee suggested, with the scrutiny of the spending of the executive non-departmental public bodies. However, I think that the Committee could go beyond that to look at some of the advisory bodies, which involve a considerable expenditure of public funds.
I am happy, too, that the right hon. Member for Haltemprice and Howden referred to the oversight of expenditure on the upkeep of royal palaces. He made the point, in a wholly non-partisan and appropriate way, that it cannot but be in the interests of the sovereign to have public moneys voted for that purpose brought under the scrutiny of the House.
The question is often asked: how effective is the Public Accounts Committee? It is difficult to evaluate that, but the right hon. Gentleman has done so by making projections of possible savings. We can legitimately try to make such claims, although they are sometimes difficult to carry through.
Given the sheer number of reports undertaken by the Committee, it is a virtual certainty that all senior civil servants will fairly frequently be subject to its scrutiny. They and those close to them know that they will be treated fairly but with considerable probing. That, I believe, affects their view of their role as accounting officers; it is not a remote role, but one that exposes them directly to democratic accountability to the House.
It is sometimes asked, when a large phalanx of people troop in to the hearings behind the accounting officer, whether that is really necessary—whether it takes so many people to answer the questions. The answer is almost certainly no, but there is a certain educative effect on civil servants, which most people would consider extremely valuable. It makes them realise that, although under the Armstrong memorandum they have formerly been regarded as primarily—Lord Armstrong of Ilminster would have said solely, and I believe that he errs constitutionally in that—accountable to the Government of the day, they must also answer to the House of Commons on some important matters.
How does one construct a debate logically, sensibly and coherently around such a proliferation of interesting reports? It can be done thematically or by illustration, and the right hon. Member for Haltemprice and Howden chose both approaches. I intend to duck out of those approaches and simply refer briefly to a few reports that raise points in which I am personally interested, not because I think that they are more important than the other reports, but because they caught my fancy and illustrate something of the way in which the Committee works.
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The right hon. Gentleman referred to the second report, "Progress in Completing the New British Library". If he had not already quoted its conclusion at paragraph 68, I would have done so. The saga of mismanagement goes back a long way. The single most important lesson is that the Treasury should have insisted at a much earlier stage that the project be overseen by a single Government Department. The Department of National Heritage must take some of the blame for that.
The story of the mishaps became all too familiar, and I will not rehearse again the losses incurred. As is clear from the report and from the evidence given to the Committee, we have less than we bargained for as a result of the mismanagement: we have a library which is smaller than was envisaged and which will be full by 2003. That is a serious consequence for the country. As we have already spent so much money, the Government should now secure enough money to ensure that the new library operates effectively.
Budgetary evidence that has become available since the report's publication shows that the Government have cut the library's grant in aid by £1.7 million from their own planning figures, which is worrying given the plague of technical problems that has afflicted the building. The story of the project has been of people not knowing when to cancel aspects of the development and admit that money has been wasted, or not taking the decision to bite the bullet and build it as it should be.
I hope that the use of the four acres of land to the north of the site to enable the library to expand, to deal with the problems of space and access to electronic media, will be authorised, and that the necessary money will be made available. It is not satisfactory if the library cannot be run effectively and cannot continue to buy books internationally and conserve those that it has. There is already a backlog of items awaiting conservation that will not grow any smaller if the grant in aid is cut.
I candidly admit that I have gone beyond the Committee's recommendations, but that we should be in this position today is due to the inefficiencies—to put it as moderately as one can—in the expenditure of the vast sums of money already dedicated to the project.
Like the right hon. Member for Haltemprice and Howden, I alighted on the 20th report, "Payments to the National Lottery Distribution Fund", which was published on 17 March 1997. The Committee noted that the director general of Oflot had been unable to levy a fine on Camelot, despite a serious breach of its licence agreement.
In the Treasury minute of July 1997, the Government agreed with the Committee's point and said that they would consider the necessary legislative change. We anticipate that legislation will be introduced before Christmas and I hope that it will deal fully with that point.
The Committee expressed concern that the National Audit Office
"were only able to satisfy themselves that all payments recorded as due to the Distribution Fund had been made punctually and in full. They were not able to express an opinion on whether the sums recorded as due were correct."
Again, I agree wholly with the right hon. Member for Haltemprice and Howden about the nature of audit and that the Committee and the National Audit Office should have the power of direct access that was denied in this case.

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In its 17th report, "Health of the Nation: a Progress Report", published on 15 March 1997, the Committee expressed concern that
"a working definition of severe mental illness has not yet been agreed, and at the length of time it is taking to gather data on the incidence and severity of mental illness."
That may be thought a narrow point, but it has attracted a not entirely satisfactory response in the Treasury minute. I do not expect the Minister to allude to it, because it is a matter for the Department of Health. I confess that the point flows from a certain lack of tautness of expression in the Committee's original recommendation.
The Treasury minute response to our report referred to a national survey on mental health that was undertaken three years ago, for which much is claimed. No doubt that historical survey is of value, but it appears to lack a continuing collection of current statistical information about severe mental illness on an agreed national basis. The minute referred to a current pilot study which it is hoped will be completed by the autumn of next year, with implementation, if the study is deemed satisfactory, one or two years later. That does not support the view that the allocation of resources to mental health today rests on a firmly based evaluation of need. As mental illness apparently accounts for about 14 per cent. of national health service in-patient costs, 23 per cent. of pharmaceutical expenditure and 14 per cent. of certificated absence from work, it is astonishing how little effort has been made, or is being made, on the incidence and definition of severe mental illness and the needs of those suffering from it.
The Treasury minute, rather than simply accepting our Committee's call for a working definition of severe mental illness, apparently encourages what it calls
"the development of appropriate local definitions, taking into account the diverse nature of services and local population's needs."
I candidly confess that I do not understand the point that the Department is making. The measurement of medical need cannot, surely, depend on the availability of particular medical services.
My interest in this issue is not merely academic. Mental illness not only has an impact on the purse of society but can cause acute distress to sufferers and their families and can sometimes result in anti-social behaviour. In certain sectors of the community, as the Committee found, specific therapeutic interventions may be necessary. We noted the need for measures to prevent deliberate self-harm among farmers and among women of Asian descent—two groups on which we heard evidence about the high levels of suicide.
Perhaps the Committee's use of the words "working definition" of severe mental illness allowed the Department to interpret our concerns as being the problems of clinicians and carers. Their problems of diagnosis are not made difficult by a lack of statistics; their problems flow from inadequate or unsuitable resources for treatment, which in turn flow from failures to measure need. It is extremely important that such a survey is carried out and that severe mental illness is defined so that proper allocation of resources can be made in future.
The reason why our Committee's recommendations seem to carry weight is that they focus not on policy—in some cases not even inferentially—but on experience of
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administration and actions. They may flow from policy, but we are interested in the outturn when assessing whether the country has had value for money. That is the Committee's distinctive role. We come in after the event. Our Committee's reports cast long shadows, and can—and do—result in better administration in this country. The Committee's work is one of the most effective areas of the work of the House of Commons. I hope that it will long remain so.
5.33 pm
Mr. Christopher Leslie: I am grateful to have the opportunity to speak in this debate, particularly as new Member of Parliament.
As a Back Bencher I want to play a role not only in scrutinising legislation, but, equally important, in checking the Executive and ensuring that the functions of Government are monitored rigorously. I am enormously privileged to have been placed on the Public Accounts Committee so early in my parliamentary career. We should emphasise more often than we do that the Committee monitors Government expenditure—the expenditure of taxpayers' money—and works in conjunction with the National Audit Office to ensure efficiency, effectiveness and value for money. Those are the aspects that I particularly value. All Back Benchers, regardless of party, need to keep an eye on those aspects of our role—not that it is for me to lecture hon. Members, who are always more senior than me.
I was interested to join the Public Accounts Committee not only because of its role in acting as a check on the Executive, but because of the circular way in which the accountability mechanism has developed over time. To me, the history of the Public Accounts Committee is fascinating. Representatives from Departments can be subpoenaed and witnesses cross-examined. The Committee makes its recommendations, to which the Treasury responds, and then we debate them annually, as we are doing today.
I should emphasise that accountability is a good mechanism for government. It is one of the best ways in which the Committees of the House of Commons work. I join other hon. Members in paying tribute to the staff of the Public Accounts Committee, to the Comptroller and Auditor General and to the National Audit Office, as well as to the Committee's former Chairman, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), and to its current Chairman, the right hon. Member for Haltemprice and Howden (Mr. Davis), who has been doing sterling work so far. I am sure that that work will continue.
I have been a local councillor in Bradford for the past four years. Perhaps it is a small amount, but Bradford council spends £400 million annually. Councillors have a great deal of hands-on involvement in deciding how money is spent, especially when budgets are tight and resources are decreasing. They go through local government expenditure line by line, scrutinising exactly where the money is spent.
Members of Parliament have a different experience, partly because most spending decisions are taken by Ministers, which makes it much more difficult for Back Benchers to scrutinise the way in which every penny is spent. We need to make a special effort to ensure, through the Public Accounts Committee and similar institutions, that we scrutinise Government expenditure more closely.

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Although I was not a member of the Public Accounts Committee in the year that we are debating, I have read through all 25 reports—at least trying to skim through the summaries—and I can see that it has done excellent work in uncovering not only waste but incompetence and mis-spent money. I shall point out a few examples that highlight those aspects.
The activities highlighted in the 19th report on the former Yorkshire regional health authority, which merged and became the North Yorkshire health authority in 1994, will be of great interest to my constituents. The report highlights crucial issues of corporate governance, which need to be monitored and implemented more rigorously throughout all Government Departments. What stood out most was the way in which relocation expenses were paid to managers, board members and consultants. Some £447,000 was paid to members of staff. We learn from the report that only £143,000 is ever likely to be repaid. An astounding amount was spent on dinners and functions—£695,000—between April 1992 and March 1994. That is an appalling amount. I get very angry when I think how that money could have been spent far more effectively and to the benefit of my constituents. Yet it seems that there is little that the Government can do to recover that money. That is also a theme I detect throughout the PAC reports and Treasury responses. There is great need to look at individual responsibility for mis-spending and to ensure that we chase up those individuals and bring them to justice if there has been wrongdoing.
The report on the Yorkshire health authority details severance payments and specialist payments made without necessary approvals and describes how a personnel manager awarded contracts worth £43,000 to her husband's company without declaring an interest. Yorkshire health authority entered into a long-term contract—15 years—with Yorkshire Water for clinical waste disposal, which involved £7.2 million expenditure; yet the contract was awarded without competitive tendering. It seems obvious today that competitive tendering in the awarding of Government contracts is vital and we need to ensure that Government Departments never again operate as the former Yorkshire health authority did.
The second theme that I want to highlight comes in the 16th report: "The Work of the Directors General of Telecommunications, Gas Supply, Water Services and Electricity Supply". The report shows the good work done by the directors general, but also highlights other failures of general Government expenditure. For example, in 1989, proceeds from privatisation totalled £3.6 billion, yet now the replacement value of the companies involved is estimated to be £138 billion. That is an enormous amount of money. The fact that those companies were sold off at such a low price is a scandal to which the PAC rightly drew attention.
My third theme can be seen in the 23rd report on: "Ministry of Defence Management of the Military Operations in the Former Yugoslavia". There were massive failures and weaknesses in accounting for stores, assets and ammunition, examples of which include £1.3 million-worth of ammunition with no supporting documentation and £4.1 million-worth of untraced ammunition. To me, the outstanding example of the need for greater concentration on accounting for the way in which the Ministry spends its money is the matter of
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vehicles that were either refurbished or written off. The estimate of the cost of that has risen from £20 million to £134 million—an astonishing figure and a lot of vehicles.
A further theme running through the reports is that—unlike the arrangements obtaining in local government, where there is personal surcharging—there is no real holding of individuals to account for such failures. That is why the PAC calling witnesses and cross-examining them is the vital link in the chain, and I am glad to play my part in that. However, there are several other matters that the PAC should promote and persuade the Treasury to implement as soon as possible.
To highlight more effectively mis-spending of Government money where it occurs and to throw a spotlight on inefficiency, we need to ensure that resource accounting is implemented across more Government Departments, more speedily, because that way of presenting departmental finances helps to show which areas are more questionable than others. I urge Ministers to consider the way in which resource accounting mechanisms are being implemented throughout Government and to ensure that the process is accelerated.
I agree with the comments of the right hon. Member for Haltemprice and Howden about access. It is anomalous for the PAC to have access to some areas of Government expenditure but not others. The Committee is limited in respect of publicly owned corporations, recipients of grants and contractors. Representatives from the National Audit Office should have access to training and enterprise councils, so that they can examine how money is spent. TECs are required to hold only one public meeting a year, which provides nowhere near enough accountability to the public, never mind to the other arms of Government or to Parliament. There are other areas of Government spending—housing associations, Rai1track, Camelot, the royal palaces and so on—that need to be opened up to access by the PAC and the NAO so that we can ensure greater rigour in the scrutiny of their expenditure.
I would also suggest that there is a need for greater co-operation between the Treasury and other Departments, not least because, too often, when the Treasury can be held to account for certain aspects of expenditure and the Department for others, certain matters slip through the net. Progress has been made in recent years, but I urge my hon. Friend the Minister to seek to create a system of government that works across the divides and artificial boundaries between Departments. Then we can look at Government expenditure as a whole and highlight general areas of policy and expenditure, which should be reviewed.
In conclusion, I emphasise that, when we are talking about rigorous monitoring of Government expenditure, we are talking about taxpayers' money. I become angry when I read through the reports and see how much money is wasted, goes missing or is unaccounted for. One way of quenching that anger has been to become a member of the PAC, because there is no greater pleasure than to haul some of those guys in front of us and put them on the spot. That should be done more often. All the matters I have raised have been touched on before by the PAC and the NAO and I hope that, in the coming year, we can be equally rigorous in our examination of public expenditure.
5.46 pm
Mr. Richard Page: It is quite like old times to return to the annual Public Accounts Committee debate after an enforced absence of two or three years. As I look around, I see that little has changed: only a small number of hon. Members are attending, despite the wealth of ammunition and the excitement that our reports can produce. Year after year, I keep hoping that the debate will be better attended, because of the enormous amount of valuable work that should be given better public examination and see more of the light of day.
Before turning to the reports, I add my thanks to those already expressed to the previous Chairman, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). He guided our Committee for some 14 years quietly and without histrionics, although the opportunity for drama certainly presented itself. With quiet determination, he put greater emphasis and underscored more strongly the importance of our reports when they emerged. I wish the same success to his successor, my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis). I shall watch with interest to see what profile he stamps on the chairmanship as the weeks and months unroll.
At the end of his speech, my right hon. Friend the Member for Haltemprice and Howden was right to flag up the importance of the NAO's role in following taxpayers' money. There should be no bar to finding out how the money has been spent: it comes out of our people's pockets and is spent via the various systems of government, so it is absolutely right that we look carefully and closely at that expenditure. I want to flag up well in advance my belief that the role of the National Audit Office should not be diminished because of the results of the referendums in Scotland and Wales. It might be different if Scotland and Wales were financially self-sustaining, but as each receives a substantial amount of money per head of population under the Barnett formula, the role of the NAO and the PAC should continue undiminished.
In fact, I should like to take that argument even further and extend into European financial affairs the work of the NAO in examining where our money goes. I suspect that the NAO might be slightly more rigorous than some other bodies in tracing where the money goes, finding out how it is spent and ensuring that we get value for money. That concern was taken up in the Committee's sixth report. Paragraph 16 of its conclusions says:
"We are pleased to note the extensive co-operation between the Court and the National Audit Office on the audit of the Community's transactions. However, we are concerned that the scope for such co-operation is restricted in that, unlike the Court, the Comptroller and Auditor General does not always have access to the final recipients of European monies."
That includes some of our money.
The report continues:
"We expressed our concerns over this limitation in the Comptroller and Auditor General's powers in our 10th Report of Session 1995–96, and we recommended that his powers be brought in line with those of the Court and the Commission."
I look to the Minister to bring about a change. It goes on:
"We are therefore disappointed that, in the Treasury Minute of 22 May 1996, the Government rejected our recommendation on the grounds that the Comptroller and Auditor General does not need to perform work carried out in areas covered by the Court in order to report fully and effectively to the House."
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We should reconsider the National Audit Office's remit so that the Committee can monitor how our money is spent in Europe.
When I first served on the Committee, more years ago than I care to remember, I looked through the catalogue of horrors and thought to myself, "Good heavens, the Departments will realise their mistakes and these disasters will dry up." Then I thought, "Hang on, the Public Accounts Committee has been going for a hundred years, so it is unlikely that matters will dramatically improve just because Richard Page is on it," and thus it has proved.
The pile of reports is equally as impressive as it was when I was on the Committee two or three years ago. One or two old friends have come back to greet me, such as the new British library and the various excitements in a health authority. Two hon. Members have commented on the new British library. I query the word "new", because it was started in 1982, and it will not seem new when it eventually opens—I am tempted to say "if' it eventually opens, but let us travel in hope.
The second report refers to the PAC's examination in 1990. I took part in that examination and in the critical report. Quite frankly, we wasted our time seven years ago. We need not have bothered. We hear about the power of the PAC, but it did not work very well on that occasion. At that time, we were told that
"the new British Library would be completed in 1996 within a cash limit of £450 million."
Is it open now? No. Is it within the £450 million limit? No. The report says that
"the building will be on a scale less than was envisaged at the outset; the building will not be fully open to the public until 1999; and the cash limit has increased to £511.1 million".
I queried the word "new", because technology has moved on. The report says that there will be only 12 per cent. more reader seats. With the advent of new technology, that is unacceptable: in fact, it is a disaster. I knew that it would be a disaster, because I visited the site 10 years ago. I asked the gentleman who was showing me round, "What will go in this big hole in the ground?" and he said, "All the books will go in there." I asked him what sort of books, and he said, "All sorts of books." I said to him tongue in cheek, "Will you have the assembled works of Lord Archer?" and he said "Yes." I then knew that the British library would not travel smoothly towards its completion.
Information technology has not been used correctly. The British library has another site in Boston, so a good fibre-optic cable and more automatic readers should be the way forward.
My right hon. Friend the Member for Haltemprice and Howden summed up the general lessons to be learnt. The report says:
"In our view the new British Library could be used as a model of how not to manage a major construction project."
I emphasise that comment. The Committee examined this matter seven years ago, and there is precious little to show for it.
The 19th report dealt with the former Yorkshire regional health authority, which the hon. Member for Shipley (Mr. Leslie) touched on. I can do no better than to quote my close friend the late Sir Michael Shersby, who took evidence from Mr. Langlands. Sir Michael said:
"I must say that when I read this report I came to the conclusion that it was really one of the worst cases that I have had the misfortune to consider since I joined this Committee in 1983."

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He was absolutely right. It is unacceptable that the personnel director of the former authority was awarding contracts worth £43,000, one of which she was intending to manage when she retired. She did not declare any of them.
The former local authority spent £695,000 on luncheons, functions and dinners at hotels, including £10,000 on two "Super Sleuth" weekends, which may have been exciting and interesting, but did not significantly advance the general health care of people in Yorkshire.
I could go through the report and refer to the failures and errors one by one. The £447,000 relocation expenses were paid after the employees had relocated: they were not paid in advance to enable them to move. It would be interesting to know to what extent health care in Yorkshire has suffered as a result of those vast relocation expenses and the sums that were spent on "Super Sleuth" weekends and grand dinners. As I said at the beginning of my speech, it is as though I had never been away.
5.58 pm
Mr. Marsha Singh: Mr. Deputy Speaker, I thank you for allowing me this opportunity to make my maiden speech. I freely confess that accounts are not one of my strong points, even though I began my professional career in banking. I am grateful to my hon. Friend the Member for Shipley (Mr. Leslie) who, with his enthusiasm for this topic, almost persuaded me that it was exciting. Scrutiny of accounts is essential for good and prudent government. We must never forget that we are merely the custodians of the people's money.
Before I come to the main body of my speech, I should like to pay tribute to my predecessor, Max Madden, who served Bradford, West from 1983. He will be remembered as a hard-working and conscientious Member of Parliament. I am proud to have been the chair of his constituency party for many years. Max had a distinguished parliamentary career, which included service on the Front Bench. He will be remembered as a man of principle: a man who was not afraid to speak his mind, and a man who stuck to his guns. Max was not a man who courted popularity at the expense of principle, and although he did not seek unpopularity he never shirked difficult issues. It is an honour and a privilege to follow in his footsteps.
I feel that it is also appropriate to pay tribute to another past Member of Parliament for Bradford, West. I refer to the hon. Member for Ruislip-Northwood (Mr. Wilkinson), who represented the constituency in the early 1970s. He is still well remembered and respected for his services to my constituency.
It gladdens my heart to see the strong connection between the House and Bradford, not only on Government Benches but on the Opposition Benches. I refer to the hon. Member for Brentwood and Ongar (Mr. Pickles), a former leader of Bradford city council. I thank him for the warm welcome that he gave to me on my arrival in the House.
Before talking about my constituency, I should like to refer to the identity crisis that I am undergoing. None other than The Times referred to me as the first Asian woman Member of Parliament. I was even invited to the first meeting of the parliamentary Labour party women's
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group, which I found delightful. I have also been congratulated on my success by women's groups throughout the country, for which I am grateful.
I must tell hon. Members the truth: I am not the first Asian woman to enter the House. I am not even a woman Member of Parliament. I am not one of Blair's babes—although I hope that that is not too much of a disadvantage at the outset of my parliamentary career. I also hope, Mr. Deputy Speaker, not to make the mistake that others have made in addressing you as Madam Speaker.
Other sections of the media have sought to pigeonhole me as an Asian Member of Parliament, an Indian Member of Parliament or a black Member of Parliament. I do not seek to deny my Asian background—I am proud of my cultural heritage—but I state emphatically that I am a Labour Member of Parliament, a Bradford Member of Parliament, a Yorkshire Member of Parliament and a British Member of Parliament, and I will represent all my constituents irrespective of colour, creed or religion.
I am a product not only of my parents' culture, but of Britain's many cultures. In today's multicultural Britain, I and others like me are the presagers of the truly multicultural person. I believe that that will be a positive strength not only for my city, but for my country.
I have lived in Bradford all my life, and I have lived in my constituency for well over 20 years. I was educated at Midland Road nursery school and at Green Lane primary school—which, incidentally, was the first school in the country to introduce school meals, and one of whose headmasters was the father of J. B. Priestley. I then went to Frizinghall junior high school and to Belle Vue boys' school. Belle Vue had the distinction of having taught J. B. Priestley himself.
One of the great things about Britain is that although privilege bestows advantages—as we know—a lack of privilege is not necessarily a bar to progress and ambition. If I am proud of anything, it is precisely that—the fact that, from the streets of inner-city Manningham, a working-class lad can reach the House of Commons. If I have a message for youngsters in Bradford schools today, it is this: with education, hard work and commitment, the only limits on their ambition will be the limits of their own imagination.
My constituency comprises the wards of Heaton, Toiler, Little Horton, University, Thornton and Clayton, and Fairweather Green, the ward in which I live. There is a mixed population, with a large community of Asian origin. The constituency contains some of the poorest areas of Bradford, as well as some of the best residential neighbourhoods in the city—but its problems are all too real. Nearly a third of the population of working age are unemployed, and the constituency ranks 14th in England and Wales in that regard. Overcrowding is three times the national average, and Bradford, West ranks as number eight in that table of shame. More than 43 per cent. of households lack central heating.
I give the House those few statistics only to highlight the problems faced by my constituents. Unemployment, overcrowding and poverty have led to increased levels of crime. I am particularly concerned about the problem of drugs, especially heroin. I know that my constituency is not alone in that regard, and I know that the House will agree with me that the peddlers of heroin are particularly loathsome and evil. First they kill their victims' will, then they poison their character, and finally they destroy

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their lives. The police cannot tackle that evil alone; the courage, commitment and vigilance of communities themselves, in partnership with the police, are required to stamp out that evil and wickedness.
I am also concerned about educational achievement. I praise the efforts of teachers in my constituency who often work with insufficient resources, in poor buildings and in difficult circumstances. I believe that we must have the highest possible expectation of every child, and that no child should be allowed to see school as a soft option. The primacy and mastery of English is paramount. English is the essential currency of our society, and without a high degree of literacy and numeracy school leavers will be left behind in the competitive world of the modern job market.
A considerable percentage of my constituents are of Kashmiri origin. I share their concern, distress and anger at the continued human rights abuses in Indian-held Kashmir. That dispute is the historical legacy of partition and British rule and I hope that the House shares my sense of responsibility for the present situation. The dispute continues to destabilise the region and frequently threatens to cause the outbreak of a disastrous war. A continuing military build-up and an arms race between India and Pakistan are not in the interests of either the Indian or the Pakistani people, and certainly not in the interests of the Kashmiri people.
I am sure that the money that is spent on arms would be better spent on education, health, jobs and homes. Internal repression cannot be a solution, short, medium or long term. Repression cannot be a substitute for dialogue and conflict resolution. Self-determination is not a privilege: it is a right, and I will continue to support the aspirations of my Kashmiri constituents for self-determination in Kashmir.
I love Bradford. Bradford is the most tolerant city in the world, and Bradford people are the best people in the world. However, love should never blind us to unpalatable truths. The American author Bill Bryson visited Bradford three years ago and wrote in his book "Notes from a Small Island":
"Bradford seems steeped in a perilous and irreversible decline. Nearly everything suffers from well intentioned but misguided meddling by planners. You would never guess that Bradford had ever known greatness."
A natural Bradford reaction would be to tell him to shove off, but every Bradfordian knows the truth of his words, and the effects of what has happened to our city in the past 20 years.
So what went wrong? Recessions were largely to blame, but no one took Bradford by the scruff of its neck. I lay part of the blame at the door of Bradford's leading organisation, the local authority, which has in the past lacked collective leadership and long-term vision. There is no doubt in my mind that many fiddled while Bradford declined.
I genuinely believe, however, that Bradford has turned the corner. We now have a chance to grow. My message to the city's fathers and mothers is that this is not a time for political machinations—it is a time for vision and dynamic leadership, but we need real achievements and not pipe dreams. I well remember the 3D development project, which was meant to be a spectacular regeneration
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of Bradford's west end. The council was led by the nose for more than a decade, but nothing happened—so please let us have no more pipe dreams.
There is much to be optimistic about, however. I welcome the council's new regeneration committee, which should be a flagship committee. I welcome the economic strategy for Bradford and district which has been produced by the Bradford congress. I welcome the new commitment to co-ordination, partnership and leadership. But we need to do more. We need to involve Bradford's entrepreneurs and captains of industry far more than we ever have. We need to tap into the imagination, energy and experience of entrepreneurs such as the late Jonathan Silver who single-handedly transformed Salts mill into a gallery containing the world's largest collection of David Hockney paintings and a high-tech factory containing Pace Electronics. That is a shining example of what regeneration is all about. We also need the Government's help, which is why a regional development agency is so important for Bradford.
Bradford has much to offer. It has an excellent communications network with access to the M1, M6, M62 and the A1. Leeds-Bradford airport is only half an hour away and Manchester international airport is a mere hour away. Bradford has a growing, young and vibrant work force. My constituency contains Bradford university and Bradford and Ilkley community college—two well-respected institutions with nearly 9,000 full-time students and providing employment for 4,000 people.
Grattons plc, Morrisons, Yorkshire Co-operative and Provident Financial are all key employers in my constituency, which also contains thriving businesses set up by Asian entrepreneurs, including Kashmir Crown bakeries, Mumtaz Paanhouse, Empire Electronics and Nirmal Razai mart.
My constituency also boasts the Alhambra theatre and the national museum of film and photography with the world's largest Imax cinerama screen.
Bradford is the gateway to Brontë country and the spectacular scenery of the dales. It also boasts the rugby league champions: the Bradford Bulls—the best rugby league team in the country. I congratulate the Bulls.
The Independent Labour party was founded in my constituency. Consequently, we in Bradford lay claim to the founding of the Labour party itself. I take this opportunity to invite the first Labour Prime Minister for over 18 years to come to Bradford and see the challenges and opportunities that face us in the lead-up to and into the next millennium. He will be made very welcome with traditional Bradford hospitality.
I am proud to represent Bradford, West and honoured to be elected in Bradford's centenary year. My electors have sent me here to bat for Bradford and that is exactly what I intend to do.
6.11 pm
Mr. Charles Wardle: I congratulate the hon. Member for Bradford, West (Mr. Singh) on his witty, entertaining and eloquent speech and on his enthusiastic account of his constituency. I am sure that he will turn the gender confusion that he has experienced to his advantage. I admire him for saying so unequivocally that he will represent all his constituents. No one who has heard him could have any doubt about that. As a son of Bradford, he said that he had much to do and I wish him well in that regard.

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I join the hon. Gentleman in his tribute to his predecessor, Max Madden. When I was the Minister with responsibility for immigration, I saw a great deal of Max Madden from the Dispatch Box and in Committee, and when he presented case after case. I had the utmost admiration for his fearless integrity and his commitment to his constituents, now those of the hon. Gentleman. I appreciate his warm remarks about two of my hon. Friends who hail from his part of the world.
I join right hon. and hon. Members who have paid tribute to the previous Chairman of the Public Accounts Committee, the right hon. Member for Ashton—under—Lyne (Mr. Sheldon). When I joined the Committee in the final months of the previous Parliament I appreciated his hugely helpful advice and encouragement. I am sure that my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) will be a fitting successor. On this day of royal celebration, fainter hearts might have set aside what my right hon. Friend said about palaces. He has set an excellent example.
I have brief comments on two of the reports that are listed in the Treasury minute of October and then I shall make some general observations about the work of the National Audit Office and the Committee and about the response of senior officials from Departments to the Committee's questions. The way in which officials react to cross-examination by the Committee says a great deal about the weight that they attach not just to prudent financial controls on the use of taxpayers' money but to modern management methods.
My right hon. Friend the Member for Haltemprice and Howden alluded to the 12th report and I have a few comments about that and about the 18th report. They dealt with quite different operations—the 12th report with the Turkish universities equipment project, which was run by the Overseas Development Administration, now the Department for International Development, and the 18th report with National Savings financial reporting. They effectively illustrate how little financial acumen and practical management controls that would be taken for granted as routine disciplines in the private sector exist in some parts of Whitehall.
In the case of the Turkish universities equipment project, the ODA officials seem to have been completely ignorant of the financial standing of the UK company TecQuipment, which had been approved as the main agent for the project. The amount of taxpayers' money that was shelled out to TecQuipment was considerably more than that company's net worth and represented much more than the company had ever achieved in annual turnover. In the private sector, where one's own money or that of shareholders is at stake and there is not a bottomless pool of funds from the Exchequer, which some civil servants think it is their right to spend, it would be more than one's business life was worth not to run a credit check on a bidder or supplier. Most business men and business women know that small companies are at greatest risk in periods of rapid expansion, even when they are to receive money from the Exchequer.
There were disturbing examples in the Turkish universities equipment project of conflicts of interest in regard to a major supplier to the project that also stepped in as a financial guarantor of the agent, and there were serious questions about single tender bids whereby orders that were worth more than £23 million were placed without any vestige of competition.
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Anxiety was also expressed about the role of Sangari International, the Turkish company which was contract adviser and negotiator for successful suppliers from other countries as well as for TecQuipment from this country. Sangari emerged with a commission of more than £6 million out of a total project value of £33 million. It is encouraging that the Department has accepted most of the criticism about this dubious set of arrangements under which taxpayers' money went to a very small opportunistic firm without any notion of the need for competitiveness or value for money. Large backhanders seem to have been paid to the Turkish middleman.
For British followers of our foreign aid programme who might have hoped that undiluted aid and trade were being directed for the good of Turkish universities and their students, the reality must have been a disappointment. The Department now says that its standing instructions to procurement agents deal with the correct handling of bids, but it is astonishing that such lapses could ever have occurred. It is even more disturbing that, during the Committee hearing, the ODA' s senior civil servant at first seemed reluctant to grasp the import of the full and frank criticism that the 12th report prompted from many members of the Committee.
The 18th report, on National Savings, is another example of appalling omissions in the most rudimentary financial controls. In this case, the language used in the Committee's conclusions was as blunt as it was strong. The conclusions state:
"We consider that the number and size of the discrepancies and unreconciled balances which have been shown to exist in National Savings financial accounting systems are unacceptable. The Agency's failure to tackle in a timely manner the serious weaknesses … point to a lack of competence on the part of those managing the Agency … the amount due from Post Office Counters Limited is some £12 million less than is shown … by the statements provided by Post Office Counters Limited … and … one of the Agency's accounts showed an amount owed by investors of £37 million, although depositors cannot owe money to the Agency".
That is because those depositors are creditors. The report referred to "seriously inadequate" financial accounting systems and to a failure to apply "basic accounting controls". This is a horrendous tale of neglect and it is made all the more disturbing by the thought of millions of small investors, thrifty and responsible people, putting their money and their complete faith in the hands of National Savings which either did not understand accounting and control procedures or could not be bothered and left the whole system wide open to the possibility of fraud and malpractice. The fact that the taxpayer would effectively indemnify any saver from losses is no excuse for this hopelessly bad performance.
It is encouraging that, following the NAO's exposé and the Committee's tough line, accounts are now to be produced for all National Savings products and to be audited by the NAO, but one is left wondering about the fate of the culprits in this saga of neglect. In the private sector, there can be no doubt that they would have faced the sack and a deservedly hard struggle to justify employment elsewhere. Under the protective umbrella of the civil service, however, the probability is that they will be given a sideways move—at worst, a spell of gardening leave until the storm blows over, and the prospect of a secure index-linked pension on retirement.

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It is little wonder that there is such impatience in the private sector, whose wealth creation and taxes largely fund the salaries of officials, with the all too frequent failure of Government Departments to subject themselves to the rigours of modern management disciplines.
On those and other reports, the NAO's investigative work has thrown light on management shortcomings in many sectors of Whitehall. If taxpayers' money is to be deployed to best effect by the Government of the day, it stands to reason that the officials who are charged with responsibility for public expenditure and for the operations and services, whether delivered in-house or contracted out, should meet the highest possible management standards.
That is not always the case in Whitehall, where the prevailing culture among successive generations of mandarins, and all the people who aspire to succeed them, has for too long been all about policy rather than administrative excellence. Policy remains the great adventure in Whitehall for the ambitious career civil servant. The object is to influence policy, preferably to create it when Ministers do not even notice and to concentrate ministerial minds on the political rewards to be won by translating policy into legislation in Parliament and, more recently, in Brussels and Strasbourg. However, once a Bill makes it to the statute book and the next step is implementation of the new measure, official enthusiasm has been known to fade.
Without doubt, many executive and administrative officers—the backbone of the civil service—work tirelessly and impartially, coping with endless amendments to statutory authority in the day-to-day duties of public administration, but the higher echelons of officialdom, who should provide the cutting edge of modern management, have traditionally relegated management skills and judgment to a lower priority than policy formulation. That is a serious weakness when much of the rest of the United Kingdom has undergone a management revolution—and not before time—in which a new generation of computer-literate, market-aware and outward-looking executives and entrepreneurs have emerged in the private sector.
That is not yet true in Whitehall, where the initiative tests for would-be fast streamers—higher executive officer development staff—are years behind the times, and where senior officials scarcely know a lot of their own rank and file staff, and understand too little about the modernisation processes that have been thrust on them in attempts to introduce a more efficient, at times even commercial, sense of reality through contracting out, privatisation, market testing, agency status, the private finance initiative and so on.
As a result, the careers of too many people in middle management—executive officers and the grade 7s and grade 5s—remain undeveloped and unfulfilled. I hope that that will change. Perhaps it will, with the introduction of resource accounting and the use of corporate plans and budgets that genuinely involve officials down the management line, and facilitate the allocation of measurable tasks and challenges to junior staff, thereby enhancing job satisfaction.
If ministerial policy about the future transformation of Whitehall into a modern management machine is a matter for the Government, and perhaps for another debate,
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the measurement of current performance and the evaluation of departmental effectiveness in delivering the declared objectives are the responsibility of the NAO and the Committee.
In that context, I add my support to the concern of my right hon. Friend the Member for Haltemprice and Howden and of other hon. Members that, as things stand, the Comptroller and Auditor General does not have automatic access to significant sectors of public expenditure for audit purposes. If the CAG is to help the Committee and the House to hold the Government of the day fully accountable to Parliament, and if he is to demonstrate how inefficiencies can be remedied, taxpayers' money saved and public services improved, he needs greater access.
In particular, as the House has already heard, the CAG needs access to non-departmental public bodies that are audited by private firms appointed by the relevant Secretary of State, to local spending bodies, to public sector companies, to recipients of Government and European Union grants, to housing associations, to bodies operating under the auspices of the Office of Passenger Rail Franchising and the Office of the National Lottery, and to private sector contractors carrying out functions for the Government, at taxpayers' expense, under contract.
Central Government have contracted out work worth £6 billion to private sector companies and the PFI has already extended private sector involvement with orders worth £7 billion. If the CAG is to be able to follow public money wherever it goes, he needs access to those private sector contractors, to be in a position to audit the accounts of the recipient of the contract or grant, and to examine value for money in the work undertaken at the Government's behest.
The CAG has powers of access to the papers of audited Departments, but he cannot automatically lay his hands on the records of private firms working under Government contract, if such access has not been stipulated in the contract. Therefore, the CAG has to negotiate on a case-by-case basis the access that he should properly have. That allows the audited body to determine whether access to him should be allowed; there is evidence, as we have heard, that, on occasions, access may be refused or, at any rate, limited. It is essential, if genuine accountability to Parliament is to be maintained, that access is written into every contract as a standard clause, and made a standard condition for grants. That should be provided for in legislation.
To do that would merely put the CAG on an equal footing with the European Court of Auditors and the European audit and accounts commissions. It cannot be right that the CAG is at a disadvantage to his European counterparts in meeting his responsibilities to Parliament.
I shall conclude with two examples of where the CAG's access to the information he needs is unsatisfactory; my right hon. Friend the Member for Haltemprice and Howden has alluded to one. Camelot, the national lottery operator, has annual turnover of some £6.4 billion, of which £1.9 billion is payable to the national lottery distribution fund. The CAG does not have the access that he needs to be able to confirm whether the systems at Camelot operate correctly and to obtain assurance about the completeness of income to the distribution fund. The Committee's 20th report of 1996–97 said that he should have full access to Camelot's records relating to

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the financial control of lottery activities. The matter is under review, but the CAG does not yet have the right to such access.
In 1996–97, the Office of Passenger Rail Franchising made payments of £1.8 billion to train operating companies, but the franchise agreements with those companies do not give the CAG a right of access to verify independently the Opraf data that are used to ensure that the franchisees have met their objectives, as they are required to do. The need for such access is generally agreed, but it is not yet available as a matter of right.
There can be no doubt that there is growing public interest in, and enthusiasm for, greater accountability on the part of the people who spend taxpayers' money. Nor is it in doubt that the demands on the Exchequer for public expenditure will continue to grow. That means that the pressure on Whitehall to achieve greater efficiency and to use up-to-date management techniques in public administration will inevitably increase. For the NAO and the Committee to be able to assure the House that the spotlight is fully on the providers of public operations and services in that regard, unfettered access for the CAG—wherever public money flows—must be an immediate priority.
6.29 pm
Mr. Mike Hall: I join the hon. Member for Bexhill and Battle (Mr. Wardle) in the fullest praise of my hon. Friend the Member for Bradford, West (Mr. Singh). I was delighted that my hon. Friend paid tribute to Max Madden, because those of us who class Max as a friend know that he was a strong and fine parliamentarian. My hon. Friend was right to praise him, and I hope that he follows in his footsteps during his time in the House. If his maiden speech is anything to go by, we can be assured of that.
My hon. Friend also gave a detailed account of his constituency. He was right to criticise the corrosive nature of drug abuse and to say that we need to tackle that in a firm and positive way. I join my hon. Friend in his condemnation of those who push drugs in our communities; we see daily the damage that they cause.
My hon. Friend talked positively about Bradford, and I view with great approval his reference to the Yorkshire Co-op. I have been a lifelong member of the Co-operative movement and value the benefits that it offers. Its presence in Bradford is a great sense of pride within the movement.
On a serious note, my hon. Friend referred to the multicultural nature of society today. His call for tolerance was a powerful message. Given events elsewhere this week, the demand for greater tolerance within the international community must be underlined, and his speech has done a great deal to promote that. It was an important part of a good speech.
My hon. Friend had the temerity to remind us about the success of Bradford Northern, or should I say Bradford Bulls. I am a member of the all-party rugby league group and a supporter of Warrington—the Wire. My hon. Friend is right to say that the Bradford Bulls is the best team in the super league now—but not for long, we hope.
My hon. Friend made an eloquent speech, full of insight. He said that it is polite in Bradford to tell people to, "Shove off." I can reassure him that when he next
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speaks in the House he will be listened to with great interest because of the quality of his maiden speech and we will certainly not invite him to shove off.
My hon. Friend also referred to the confusion over his gender. I know that at one time he was down to be a member of Emily's List. I was envious of the fact that he was invited to join the photocall with the Prime Minister after the first meeting of the parliamentary Labour party. There would have then been 101 women and two men, not one. We look forward to many contributions from him in the future. If they are anything like his speech today, they will be absolutely fantastic and well worth listening to.
I join other hon. Members, particularly the new Chairman of the Public Accounts Committee, the right hon. Member for Haltemprice and Howden (Mr. Davis), in their praise for the outgoing Chairman of that Committee, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). I nearly referred to him as Bob because, when I was growing up in Ashton-under-Lyne, my right hon. Friend was my Member of Parliament. I have a great deal of respect for him. He has been a close friend of my family over the years and has done a terrific job as Chairman of the Public Accounts Committee. I am sure that that had nothing to do with the fact that I was appointed to that Committee on 9 June 1992 when a vacancy occurred at short notice.
It was a great pleasure to be a member of the PAC. It taught me a great deal about what goes on in the Departments. As an Opposition Back Bencher at that time, it gave me great insight and enabled me to come close to the workings of government. Membership of that Committee is of great benefit to Opposition Back Benchers.
My right hon. Friend the Member for Ashton-under-Lyne always used to tell us that the Public Accounts Committee was the hardest-working Select Committee in the House. When one looks at the volume of work that it gets through and the number of reports produced, one can see that that is not just a boast but a statement of fact.
We are considering 25 reports from 1996–97. We must remember that we are looking at only half a year and that there are still 22 outstanding reports from that year. I hope that they will be published, because they are important pieces of work that need to be drawn to the Government's attention. We need to learn the lessons in government of some of the mistakes that have been made in the past.
I offer full praise to the Comptroller and Auditor General and his staff for the work they do behind the scenes on the Public Accounts Committee. Their value-for-money audits and full financial audits mean that when a report appears before the Committee, it is no trivial matter. The National Audit Office and the Comptroller and Auditor General deserve fullest praise from the House for the work that they do on financial probity and protecting taxpayers' money.
The current Chairman of the Committee was right to draw attention to the national lottery and to the lack of access that the Comptroller and Auditor General has to Camelot's books. That has concerned the Committee greatly since the inception of the national lottery. It is an apposite reference at this time when Camelot has just disclosed its six-monthly pre-tax profits at something short of £34 million, which means that it wins £1 million

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on the national lottery every week. Personally, I would like to see the lottery run by an organisation that is not involved in making profit. I am sure that that will happen at some time, and I look forward to it.
The seminal report of the PAC—the eighth report, published on 17 January 1994—has already been mentioned. The opening paragraph of that report is still relevant to the problems that the Committee addresses. I make no apology for repeating it in this debate as I have done in previous years. It says:
"In recent years we have seen and reported on a number of serious failures in the administrative and financial systems and controls within departments and other public bodies, which have led to money being wasted or otherwise improperly spent. These failings represent a departure from the standards of public conduct which have mainly been established during the past 140 years. This was the period following the publication of the Northcote and Trevelyan Report which condemned the nepotism, the incompetence and other defects of the Civil Service and brought about fundamental change. It is from that period that we acquired the principles and the standards which have come to be copied by some countries and admired by many more. It is our task to retain those standards."
Paragraph 6 of the report makes some important comments, particularly in the light of the 25 reports before the House today. It says:
"We emphasise that we are not calling for any more detailed rules. Almost every case we have examined involved breaches of existing rules or guidance."
I can say with confidence that, when we consider the reports before us, that paragraph still applies. If the proper rules of accountability had been applied in the subjects considered in the reports, we would be debating a far better state of affairs from the 1996–97 series of PAC reports.
The first report to which I wish to refer in detail is the 12th report on the Overseas Development Administration and the Turkish universities computer equipment project. It is an astonishing project. A total of £23.36 million of aid has gone to support a total project worth £66.7 million. It was managed by a United Kingdom company called TecQuipment Ltd.
The first mistake made by the ODA was that it did not award the contract after competitive tender, which was a breach of the existing rules. The project involves the provision of technical equipment to support undergraduates and postgraduates in 29 Turkish universities.
The PAC found that TecQuipment had significantly overlapping roles in the aid project. I think that that is a slight understatement, because TQ was the project manager, it supplied the equipment procured with the ODA aid and advised the Turkish Higher Education Council on the tender evaluation. TecQuipment was involved in every stage of the project: no Chinese walls, no declarations of interest and no avoidance of any pecuniary interest by the organisations involved in the bid. Therefore, TQ was in a powerful and pivotal position to influence the contracts awarded. It was not surprising to note that TQ received orders worth £5.8 million, with £3.3 million of that coming from one bid.
TecQuipment had only small financial assets and, before entertaining the idea of its working on the project, the ODA demanded a bank guarantee. TecQuipment went to Fisons for a guarantee. Coincidentally, Fisons underwrote its guarantee for £10 million and the House
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will not be surprised to know that Fisons won a bid for the project totalling £10 million. The coincidence is too obvious to miss.
This sorry and sleazy affair is topped by the involvement of a company called Sangari International, which acted for TQ in managing the project. It also acted for companies bidding to supply the equipment and—guess what?—it advised the Turkish Higher Education Council on placing the contracts.
The House will not be surprised to hear that Sangari International secured £33 million of business on the project for the companies that it was advising. There is a lack of value for money, there is a threat to financial probity, and taxpayers' money has not been properly used. Sangari received £6 million for its share of the action, as well as undisclosed management fees. The new Chairman of the PAC was right to draw attention to that sorry state of affairs.
The second report to which I want to refer has already been referred to by my hon. Friend the Member for Shipley (Mr. Leslie). It is closer to home for him than it is for me. It is the 19th report into the former Yorkshire regional health authority. It was to the credit of Alan Langlands, the chief executive of the national health service, that he commissioned an inquiry into what happened in that region before 1 April 1994. The inquiry uncovered abuse, unlawful payments, tax avoidance, financial conflicts of interest, fundamental management failure, complacency over accounting of public money, breaches of financial controls, abuse of authority, dodgy land deals and money borrowed for one purpose and spent on another. That refers to the money given to secure loans for people who had moved house. They borrowed the money under a deal that had not been approved by the Treasury and then spent it on something else.
The health authority also took advance payments, a practice completely outside Treasury rules. I believe that in the days before the abolition of the health authority, the rule book had been thrown away.
I want to pick mit three aspects of what was going on. The first is minor, but lessons were learned from it. Before the merger, Yorkshire regional health authority provided the chair of the trust with a Range Rover. That was outside Treasury guidance. When it was sold, it cost the taxpayer £10,000. It also provided a car for another member of staff, but the report does not say how much that cost the taxpayer. The NHS executive then issued guidance to all trusts stating that it was not appropriate for trusts to spend money on providing Crown cars for the chairs of regional health authorities, health authorities or trusts. That guidance has generally been followed, although there are at least two examples of action having to be taken after the guidance had been issued.
Secondly, the health authority joined with Yorkshire Water to provide a clinical waste incinerator. It was a capital investment cost of £7.2 million, with a guarantee of £2 million a year for 15 years for the incineration of clinical waste. Again, that contract was not let subject to competition. The contract was far too long as it stretched over 15 years—and, more important, it did not receive the necessary approval of the NHS executive. Health authorities and trusts now have to write any corporate projects into their business plans. When they need to borrow money and get involved in such deals, they need the approval of the NHS executive. That is another lesson learned from this very sorry affair.

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The third issue, which has already been referred to by a number of hon. Members, was the authority spending £695,000 on functions and dinners between April 1992 and March 1994. The report records that it must have bought some very expensive wine. As has already been mentioned, the functions included two "Super Sleuth" weekends in a hotel, costing £10,000. We do not need to be super sleuths to work out that that sort of expenditure on hospitality is wholly unacceptable.
The PAC was right to demand that health authorities and trusts should have a clear responsibility to ensure that the funds that they are given for health care are spent on health care and not wasted in the way outlined in the report.
The seventh report, on the hospital information support systems initiative, is rightly critical of the NHS executive, for two main reasons. First, in 1992–93 the Committee, in its 63rd report, on the Wessex regional health authority regional information systems, made severe criticisms about the lack of management, a lack of planning, the lack of a corporate approach to computer purchasing and the lack of proper project management. It was very critical.
The seventh report shows that the same problems have repeated themselves. For example, it found that the day-to-day project management was slow to deliver the benefits of improved patient care. There were delays of between eight months and three years in the six pilot projects referred to in the report. The initial project cost was £47 million, but that rose to £61 million. The report records that the extra £14 million had to be found from other budgets, with a consequential impact on patient care in the hospitals involved. When we tried to draw comparisons with the Wessex report some years previously, Alan Langlands disputed that there was any connection. Despite his protestations, the PAC recorded extreme disappointment that some of the Wessex problems had been repeated.
There was all the more cause for concern when I read Ceefax yesterday and noted that the Audit Commission has reported that there is
"no good central information about the effectiveness of drugs and treatment"
within the NHS. We have two critical reports from the PAC about the need to co-ordinate information to improve patient care, yet in 1997, the Audit Commission has drawn attention to the fact that there is no central information about the effectiveness of drugs and treatment within the NHS. I hope that Ministers in the Department of Health with take heed of that report and act swiftly to ensure that we get the sort of information that we need in the NHS to ensure that all patients receive the care to which they are entitled.
One report that has not been referred to so far is the third report, into the mining operations of British Coal. I shall refresh the memory of those who do not remember the details of the sale of British Coal. The Government sold British Coal in December 1994 for the reported sum of £926 million. However, the PAC drew attention to the fact that the Government, in preparing British Coal for privatisation, had spent £37 million specifically on those preparations. They had spent another £582 million on minor redundancies. A post-sale adjustment to the price reduced it by £6.4 million. Another £136 million was deferred. Logic and mathematics show that the Government received only £212 million in cash for the whole of the British coal industry.
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That is not the full story. Before the Government sold British Coal, they wrote off £2 billion of debt and, at the point of the sale, they wrote off another £1.6 billion. The class IV vote for 1994–95 shows that in that year the taxpayer was receiving £112 million per anum from British Coal in interest payments. The Government had only to keep British Coal in public ownership for another three years and we would have had more money in the public purse than they received for selling it—unless we take into account the fact that, because British Coal was sold, the Government were able to reclaim £2 billion from the surplus in the British Coal pension fund. Even taking that into account, by my reckoning the taxpayer is still £1 billion out of pocket. Only this month, we have heard of the problems now besetting the privatised British coal fields.
I am very concerned about the role of Rothschild in that privatisation. It was awarded a £9.1 million contract to advise British Coal on the sale. Initially, firms were invited to tender for the provision of advice on the preliminary sale. Rothschild was the preferred bidder for the preliminary work, but it was then appointed, without further competition, to advise on the whole sale. The decision was taken by the then Secretary of State for Energy, now Lord Wakeham. It was contrary to the guidelines set out in the PAC's eighth report in 1993 about open competition for Government business. It was probably also outside European guidelines. What concerns me most is that on 20 May 1996, when we took evidence on the sale of British Coal, we were told that Lord Wakeham was then working for Rothschild.
The report on the completion of the new British library has been referred to by many hon. Members. When I cross-examined the permanent secretary at the Department of National Heritage, I referred him to the story in "Yes, Minister" when Jim Hacker said to his permanent secretary at the Department of Administrative Affairs, "It takes longer to get planning permission for a bungalow than it took to build the pyramids." I put that to Mr. Hayden Phillips, and he said that he did not consider the project in those terms. He had looked back in history and found a better comparison. It took 939 years to build Prague cathedral, whereas it took only 22 years to build the new British library.
The British library project was started in 1988 and was estimated to cost £300 million. By the time that the PAC took evidence on it, in June 1996, the estimated cost had risen to £511 million. I made a note saying that the British taxpayer would probably be charged an additional £61 million in settling construction work charges.
As we have been told, once the library fully opens, it will not be long before it is filled to capacity. We were told that we will be provided with only 12 extra reading rooms, which is a 25 per cent. capacity increase over the previous location. We were told also that, when the building construction work at the new library was inspected, 230,000 items—dealing with shelving, cabling and fire protection—required correction.
Laing was involved in the project, for the benefit of the British taxpayer. It was given the job—at a cost to the taxpayer of £38 million—of supervising the works. It was responsible for ensuring that the works were completed to standard specifications, for maintenance and for quality control.

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Laing did not achieve what it had been paid to do. The House will therefore be surprised to learn that the supervision contract, when it was renegotiated in 1991, was awarded to Laing. That beggars belief. Although the British library project was never a contender for the best civil service project of the year award, the British taxpayer certainly did not get value for money.
The Committee's sixth report, which was encouraging, deals with the European Court of Auditors. The Chairman and some of the members of the PAC went to Luxembourg to observe how the court operated. Some reports in the press this weekend stated that the European Union has been found to have lost in waste and fraud 5.4 per cent. of its £52 billion budget for 1996. I hope that the sixth report will help to enable the European Court of Auditors to do the same work for the European Union that the Public Accounts Committee does on behalf of the British taxpayer.
I am reassured that the Amsterdam treaty changes have strengthened the powers of the European Court of Auditors, and that they will make it easier for the European Union to agree legislation to deal with fraud in the EU budget. I am even more encouraged that—in the first half of next year, under the British presidency of the European Union—one of our Labour Government's first priorities will be to propose an active agenda to deal with waste and fraud.
6.52 pm
Maria Eagle: Thank you, Mr. Deputy Speaker, for giving me an opportunity to speak in the debate.
I congratulate the right hon. Member for Haltemprice and Howden (Mr. Davis) on his elevation to the chairmanship of the Public Accounts Committee. It is a momentous occasion, because it is the first time since 1983 that the chairmanship of that important Committee has changed. I hope that he will not think that I am making a partisan point if I wish him as long and successful a tenure in the position as that enjoyed by his predecessor.
I should like to add my voice to those paying tribute to my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) for his tenure and success in carrying the flag, since 1983, for the Public Accounts Committee. Although 14 years seems a long time, it soon becomes apparent—once one sniffs around a bit—that his interest in the Committee's workings and in the subject of Government audit goes back much further. He was first appointed to the Committee in 1965, and he was writing Fabian pamphlets about auditing Government accounts in 1973. His interest, understanding and experience are therefore about as long as any other hon. Member's.
My right hon. Friend the Member for Ashton-under-Lyne may also be credited with having shaped the Government audit regime since the advent of the National Audit Act 1983. The right hon. Member for Haltemprice and Howden will have a hard act to follow, but I am sure that he will do so with great flair.
I should like to echo briefly the tributes paid to the Comptroller and Auditor General and his staff at the National Audit Office. It is apparent, even in my
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extremely short time in the House and on the Committee, that it would be impossible for us to do our job were it not for the work that they do. I am constantly amazed not only by the speed with which we manage to deal with issues, but by the amount of good work that we must get through every week to do our job. I add my appreciation to that of other hon. Members who have seen at first hand the extent of good work done by the Comptroller and Auditor General and the National Audit Office.
It would not be possible for the Committee to work well without the efficiency and effectiveness of the Clerk to the Committee and his staff.
I was not a member of the Committee or an hon. Member when the reports that we are debating were considered by the Public Accounts Committee. I have therefore decided to take a rather wider look, through the eyes of a new hon. Member, at the work that we try to do.
The Committee operates at the very centre of one of the traditional roles of the House—to scrutinise the Executive. For many hundreds of years, it has been difficult for the House to get that task right. Such scrutiny was even an underlying and serious cause of civil war and regicide. With the maturing of our democracy and the passage of years, however, we have managed to become at least a little more civilised in performing it. It now seems to come down to a close examination of how money granted to the Executive by Parliament is spent.
Over the years, hon. Members and other parliamentarians have wrestled with the issue of how to perform that role, which is one of the House's most difficult jobs. Until the end of the 19th century, Supply was examined on the Floor of the House, when each Department would bring to the House its estimates. There would be a Committee of the whole House, and hon. Members were able to examine—line by line, as some people in local government still do—the estimates, to suggest amendments and occasionally even to win votes on amendments. These days, however, such consideration is no longer practical—if it ever was.
In 1905, in the first debate when the Public Accounts Committee's work was submitted to the House, Mr. Winston Churchill examined the effectiveness of how things were done in those days, when there was a Committee of Supply and Supply days. On the Committee of Supply, he said that
"the value of Supply days as occasions for raising grievances and discussing questions of policy"
was evident,
"but so far as any systematic and scientific examination of the expenditure of the country was concerned, they were a series of farces from beginning to end."
Mr. Churchill also suggested that it was not possible for any human being
"not possessed of expert information or access to official documents"
to
"possibly bring any effective criticism—except by accident—to bear upon the details of expenditure in Committee of Supply."
On proceedings on the Floor of the House, he said that
"It was absurd to suggest that a system under which 670 Members, dominated by partisanship and Party feeling, strolled in and out on Supply days, and voted without having heard the debates, involved any definite, methodical, and scientific examination of the expenditure of the country."—[Official Report, 26 July 1905; Vol. 150, c. 443.]

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The issues that Mr. Churchill was dealing with on that day are still with us—to the same if not to a greater extent, because we deal with much more Government money, and the Government undertake a much wider range of activities. The issues that he raised are as serious now as they were then.
How can the House scrutinise seriously and effectively the spending of public money by the Executive? These days, we do it slightly differently. We have reached a compromise in the sense that the PAC itself will formally examine appropriation accounts but, in reality, will concentrate on issues flagged up in the reports of the Comptroller and Auditor General. As has been said, the PAC also does a great deal more work on value for money, which is a good thing. I do not think that it is possible to scrutinise the vast amount of public expenditure any more sensibly than we do already. However, it is important that the PAC retains a reputation for being a formidable body, especially in respect of its hearings.
It is appropriate that accounting officers who come before the PAC should quake in their boots a little before they come through the door. I shall certainly do my bit to ensure that they continue to do so. I know that some accounting officers have complained about the confrontational way in which members of the PAC take evidence. I make no apologies for that; it is important that it continues. Last year, when my right hon. Friend the Member for Swansea, West (Mr. Williams) questioned the accounting officer for the Office of the National Lottery in a confrontational way, he found that it was possible to discover by cross—examination things which even the National Audit Office had not uncovered. That is an important contribution that hon. Members without accountancy skills can make.
It is clear, even to a new Member of Parliament like me, that the Executive do not enjoy being scrutinised, and that has been true for centuries. The 22nd report of the PAC deals with British Rail Maintenance Ltd. and the sale of its maintenance depots. Referring to the Department of Transport, one of the report's conclusions states:
"We welcome the Department's decision to abandon the 'Not for NAO Eyes' convention".
Government Departments and elements of the Executive developed their own ways of dealing with the challenges of external audit and tried to keep things covered up. One of them was the convention of writing on the top of papers, "Not for National Audit Office eyes". I, for one, am glad that the Department in that case has agreed to abandon that convention, but it is a warning to us all: while we enjoy a cosy relationship with the Treasury and the Executive, and while the Financial Secretary to the Treasury is a member of the PAC, it is still possible for the Executive and Government Departments to take steps to try to avoid our scrutiny. It is important that those of us participating in the scrutiny do not get taken in, but retain our critical faculties.
In my brief experience, I have found that there are one or two issues of general concern and faults in the way in which we do things. I do not yet have the answers, but I shall certainly be thinking about them in the coming months and years.
It seems that the accounting officers who come before the PAC are often not the people who have made the decisions that they are having to defend to us. They are accounting officers, and, in that sense, have to account for
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decisions that are made, but I wonder whether dragging along a chairman or two, especially those of non-departmental public bodies, might make some of the people who do take the decisions think a little more carefully before doing so.
Despite the general feeling that the PAC and its proceedings are well covered by the media, I do not think that the media make enough of what we dig up. The green reports prepared by the NAO are well covered when they are published, but that is less so in respect of oral evidence and PAC reports. The media may like to take a closer look at all stages of the scrutiny process.
Despite the fact that 92 per cent. of recommendations are accepted by the Government and the Treasury, those recommendations are not always acted on. The hon. Member for South-West Hertfordshire (Mr. Page) and some Labour Members expressed dissatisfaction with the action taken following the reports. All we can do as members of the PAC is return to a subject and produce another report—perhaps we ought to think of another way to ensure that recommendations are acted on.
In any event, I am grateful to have been appointed to the PAC, although I was somewhat surprised, being a new Member of Parliament. Who knows how the minds of those on the Committee of Selection work and on what basis I was appointed? I am grateful to have been appointed and look forward to participating in this debate in future years, when I shall know more of the detail of the reports being considered, as I shall have contributed to them.
7.5 pm
Mr. Alan Campbell: I am grateful for the opportunity to make a brief contribution to the debate, albeit as a new member of the Public Accounts Committee commenting on reports of a previous Committee. Before I do that, I, too, pay tribute to the role of Sir John Bourn and his staff in providing support to Committee members. New members in particular benefited from that support. I also thank the Clerk to the Committee.
We have, quite rightly, heard a great deal about the need to scrutinise the Executive. In last year's debate, my right hon. Friend the Member for Swansea, West (Mr. Williams) spoke about the "redefining of ministerial accountability". I should like to comment on that against the background of enormous change in public service and, in particular, to say something about the growth in the number of public service regulators.
Regulators have become something of an industry in their own right. There are now some 134 regulators employing 14,000 staff, at a cost of about £766 million of taxpayers' money. Recent research by the London School of Economics stated:
"It is an industry which seems to have grown topsy-like with no overall rationalisation or consistent practice".
Furthermore, it would appear—I am not making a party political point—that the previous Government saw the increase in the number of regulators, but failed to ensure that the regulators themselves were properly regulated. Clearly, regulators cover diverse and often unrelated areas, but they are nevertheless linked by their obligation and duty to seek the highest possible standards for the public.
My comments refer almost exclusively to the 20th report, dated 17 March, on the workings of the Office of the National Lottery. The report contains

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some serious criticisms of the role of Oflot and, in particular, of the role of the director general. Some of those criticisms arise from weaknesses in the original licence provisions and from confusion over whose role it was to intervene and to regulate.
For example, the report draws attention to several instances when interest from accounts went to Camelot rather than to the players' trust. It draws attention to the two-day delay in paying in receipts from retailers, which meant that £420,000 in interest went to Camelot rather than to the players' trust. Similarly, the interest paid from the annual prize shortfall, worth some £6 million in 1995, again went to Camelot rather than to the distribution fund. I understand that that was to be put right on 1 April this year, but it is interesting to note that that decision was taken only after a recommendation by the PAC.
The clear Treasury view is that such matters are the responsibility of the director general. If there is still confusion, it must be cleared up. There may be confusion in the original licensing provision, but the report makes further criticism of the director general and the way in which he sought to apply his powers. For example, he failed to give sufficient priority to the compliance programme, although I am again pleased to note that after the PAC's criticisms, work on most of the programmes is under way. The report comments on the director general's lack of vigour in ensuring that money was paid into the players' trust, which resulted in losses to the trust of £500,000. The trust's difficulties stem partly from the director general's decision not to get involved in the detail of the trust.
The report concludes that the director general's approach was
"less active and vigorous than that adopted by other regulators, such as the Directors General who regulate the electricity, gas, water and telecommunications services."
I hope that he takes that on board. I believe that there was a call in last year's debate for his resignation. If my comments fall short of that, I hope that he does not take it as a vote of confidence.
The most worrying aspect of the report has already been touched on by other right hon. and hon. Members—the lack of access for the National Audit Office to Camelot's records. The NAO was unable to satisfy itself that payments to the distribution fund had been correctly made. Unless the NAO can negotiate sufficient access to do its work, it cannot advise Parliament properly. That is unacceptable. I welcome the fact that the Government are considering ways of accessing Camelot's records.
The Committee notes that the lottery has raised substantial sums for good causes. We all acknowledge that. I hope that we shall get a sports hall development at Marden Bridge in my constituency, which will transform sport for schoolchildren there. However, that does not remove the need for vigorous examination and criticism, when warranted. It also does not excuse the lack of a more proactive and positive approach from the director general. He has an important role in facilitating parliamentary accountability. The report acknowledges his crucial role in maintaining the integrity of the lottery and reassuring the public.
I welcome the action of the Department for Culture, Media and Sport and its intention to transform the national
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lottery into the people's lottery. If it is to be a people's lottery, it must have public confidence. The public buy the tickets and keep the lottery going, and their interests must be paramount. The regulator must promote the public interest, not the operator's interest. There are lessons in that for all regulators. It may well mean making operations more transparent. If it means giving regulators more powers to be able to discharge their work better, so be it.
I welcome the report, as I welcome the lottery White Paper. In view of the serious concerns raised in the report, the Government's determination to carry out a significant overhaul of the system is fully justified.
7.13 pm
Mr. Phil Hope: I congratulate the right hon. Member for Haltemprice and Howden (Mr. Davis) on his elevation to Chairman of the Committee. I look forward to serving under his stewardship. As a new member of the Public Accounts Committee, I have found the first few meetings most enlightening, reinforcing the importance of democratic scrutiny of Government spending. I add my congratulations to all former members of the Committee on the determination and rigour with which they have exercised their duties. Preparing for and participating in the work of the Committee requires a good deal of time. The value of its work can be seen in the Committee's reports. I add my tribute to the former Chairman, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), for his superb leadership—an example that we all aspire to follow.
The reports show the vital role of the Comptroller and Auditor General and the Public Accounts Committee in holding the Government to account for their performance and ensuring value for money. I have chosen my top four reports from the 25 before us. I wish that I had been here to take part in those debates. My No. 1 was the second report, revealing incompetence in the delays and cost overruns in completing the British library—a tale of appalling mismanagement. The 16th report exposes the billions of pounds of excess profits made by water and electricity companies following privatisation. The 19th report reveals the intolerable irregular relocation payments made by the former Yorkshire regional health authority. The 22nd report shows that the failure to ensure comprehensive valuations of the British Rail maintenance depots before their sale resulted in a bad deal for the taxpayer.
I hope that the new Committee, with many new members, including me, will continue the excellent work that has been done in the past. In the four or five hearings so far, we have exposed gross inefficiency in the work of the Child Support Agency, revealing that 85 per cent. of its maintenance payment balances are wrong, causing great distress and misery. We have also uncovered some appalling judgments, such as the Inland Revenue's decision not to implement a £20,000 computer database scheme, leading directly to the loss of several millions of pounds—if not hundreds of millions—of tax revenue from employers.
Given the benefits to the public purse of past and current PAC scrutiny, I add my voice to those of other right hon. and hon. Members who have asked for increased access for the Comptroller and Auditor General—and therefore for the PAC and Parliament—to follow and scrutinise public money wherever it goes.

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In particular, we should increase his powers over and access to executive non-departmental public bodies, such as the Housing Corporation and the Legal Aid Board.
All local public bodies funded at arm's length should be included in the Comptroller and Auditor General's remit. That includes the further and higher education institutions, training and enterprise councils and, in particular, housing associations. We should ensure that we can scrutinise the final recipients of Government and European Community grants, including farmers, companies and voluntary bodies. We need to scrutinise contractors when Government functions are under contract to the private sector. We need to ensure that Railtrack and the rail operating companies, which are regulated by the Office of Passenger Rail Franchising, are properly scrutinised by the Comptroller and Auditor General. As my hon. Friend the Member for Tynemouth (Mr. Campbell) said, we must ensure that Camelot, regulated by the Office of the National Lottery, is properly brought under parliamentary scrutiny.
Extending access in that way would increase the scope of the NAO to many more areas of public spending and extend the benefit to the taxpayer of its work, which recoups at least £7 for every £1 that it costs to run.
Every member of the PAC is committed to ensuring the best value for money from Government spending. Like our predecessors, we shall perform our duties with determination and rigour. Already in the new Parliament, our hearings have exposed inefficiency and ineffectiveness in the Child Support Agency and the Inland Revenue. I ask for the Comptroller and Auditor General and the Public Accounts Committee to be given the extra tools and powers that we need to pursue economy, efficiency and effectiveness wherever public money is spent.
7.19 pm
Mr. Andrew Love: I am pleased that my hon. Friend the Member for Bradford, West (Mr. Singh) has returned to the Chamber as I now have the opportunity to congratulate him on a witty and entertaining speech that will, I am sure, go down exceptionally well in his constituency.
I am a new member of the Public Accounts Committee and I am acutely aware of my lack of knowledge and experience of its work. In my brief period on the Committee, I have been overwhelmed not only by the diversity and complexity of the reports, but by the work load. I do not know whether there are any Whips in the Chamber at the moment. If there are, I suspect that they will be smiling. My hon. Friend the Member for Liverpool, Garston (Maria Eagle) said she did not know why she had been appointed to the PAC. I do not know either; I wonder whether the last laugh is with the Whips rather than with us.
I pay tribute to all the previous members of the Committee. They produced not only the 25 reports that we are considering, but another 22 that have come out in the past year. Much of the credit for that record must go to the National Audit Office and to the Comptroller and Auditor General, Sir John Bourn.
I thank Ken Brown, the Clerk to the PAC, and his staff for dealing efficiently with the bewildering array of papers that we are sent continually. I also thank them for
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their helpful attitude and their patience and forbearance in dealing with new Members such as me.
I join other hon. Members in paying tribute to the previous Chairman of the PAC, my right hon. Friend the Member for Ashton—under—Lyne (Mr. Sheldon) and I welcome the new Chairman, the right hon. Member for Haltemprice and Howden (Mr. Davis). I wish him well in his duties during this Parliament.
When I became a member of the Committee, I was worried by the fact that it always reached a consensus—something that is very hard to achieve in politics—but having seen the Committee in operation over the past few weeks, I can understand the strength of the concept that Gladstone envisaged when he set up the PAC. It does not comment on policy; its role is to scrutinise, to combat fraud and corruption, to ensure that public funds are spent according to the purposes they are voted for by Parliament and to achieve value for money.
Unanimity adds greater force to our recommendations. According to the National Audit Act 1983, the PAC has a duty to investigate "economy, efficiency and effectiveness" in the public sector. That requires access, but access is not available in certain areas of the public services. I associate myself with the comments made by the Chairman and other members. We must have access to all areas of public expenditure and to all bodies, whether quangos, housing associations, Camelot or, as mentioned by the Chairman, royal palaces.
We often think of this country as having a reputation for public probity and scrutiny. I am concerned that the European Court of Auditors has greater powers of access than the National Audit Office. That point applies not only to European institutions but to some British bodies. We need to look at that matter carefully.
The second report dealt with progress in completing the new British library. In this context, "progress" is a misnomer. The report followed a 1991 PAC report that catalogued the disasters that had overtaken the project. There had been a delay of three years in opening and, as I understand it, the library has still not opened. It has been developed on a smaller scale than originally envisaged, with increased costs of £61 million. The reason was described in the report, somewhat euphemistically, as "technical defects"; book shelving and electrical cabling had to be replaced. I was amazed to read that four years passed before the Department of National Heritage was informed that there had been problems. That is a shocking indictment of the control of the project.
The problem was exacerbated by there being two clients—the Department of National Heritage and the British library—rather than one and by a complicated management arrangement that resulted in weak quality control and difficulty allocating responsibility for defects and cost overruns. That was a recipe for disaster. It was, however, nothing compared with the lack of control over expenditure. There was no total cash budget and no firm budgets for work packages. That left the Department, as the report says,
"poorly placed to resist claims".

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There was great concern that that was not the way in which to manage a major construction project. The report concluded:
"In our view the new British Library could be used as a model of how not to manage a major construction project."
I was attracted to the fifth report, "Highways Agency: The Bridge Programme" because of experience of the programme in my constituency. About a year ago, the Highways Agency commenced remedial works to a bridge on the A10 which is the largest trunk road and the busiest north-south route through my constituency. We thought that the remedial works were intended to cover deterioration that had taken place over the past 10 years. Less than two months after those works had been completed, further work was undertaken and we discovered that the second round related to bridge strengthening under the Highways Agency programme. We had a series of disruptions the first time round and within two months we had a second series of disruptions, which are only now coming to an end. That was incompetence of the highest order and it led me to take a close interest in the report.
The PAC examined the 15-year programme to restore motorway and trunk road bridges to good condition and to enable them to cope with vehicles of up to 40 tonnes, in line with the European directive. That is what was explained in my constituency. The report highlighted the fact that, halfway through the programme, only £131 million out of the £700 million that had been spent had been devoted to assessment and strengthening. That is against the backdrop of an increased work load due to an increased number of bridges with problems and improved inspection procedures—which led to concern about ensuring that under-strength bridges remained safe to use without width or weight restrictions that imposed severe traffic disruption.
The report criticised the monitoring of the agency's maintenance agent and the failure to introduce a systematic national approach to monitoring and recommended that the Department set up as a matter of urgency a bridge management information system to ensure that the limited funds were deployed in the most cost-effective manner. That was surely the greatest condemnation of the programme up to that date. I understand that significant progress has since been made on the report's recommendations, which I welcome.
I shall deal briefly with the 13th report, "The Second Sale of Shares in National Power and PowerGen". The sale was overshadowed immediately by the announcement by the Director General of Electricity Supply of a review of regional electricity companies' price controls. The report noted a significant price fall, following the announcement, on the second day of trading.
While I do not demur from the Treasury view that it could not anticipate that the market would interpret the announcement as having implications for other regulatory regimes, the report concluded that Ministers should have been consulted before the final decision to proceed with the sale. There was inevitably some fall-out in the attitude of large institutional investors, although evidence from the Treasury subsequently suggests it to have been a short-term phenomenon that did not affect later flotations.
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On a brighter note, the report welcomed the additional proceeds from the state's sale of shares. The sale was oversubscribed, in line with Treasury predictions, and achieved with less costly incentives than previous ones. The report recognised the bank of experience and expertise built up in the Treasury from many other privatisations. The only question that remains is whether that expertise will be put to any significant use in future.
7.31 pm
Mr. Mark Todd: I congratulate all members of the Committee and their Chairman. They have expressed their thoughts on the reports and described their onerous duties. I wish them well.
I am not a member of the PAC and I have but one very narrow focus for my comments. It relates to the eighth report, "Information Technology Services Agency: Outsourcing the Service Delivery Operations". My concern lies more in the Treasury response to the report than in the report itself. There was very useful invigilation by my hon. Friend the Member for Wallasey (Angela Eagle) of some of the issues relating to the Public Accounts Committee about which I am concerned, but the Treasury's response is worrying.
I shall quote the section that worries me most. It relates to PAC conclusion xiii.
"We note that EDS have won significant amounts of public sector IT business … We are very surprised that Treasury were not able to provide more than fragmentary information of the extent of work done by EDS … We look to the Treasury to provide this Committee with complete and comprehensive information on the distribution of central government IT business amongst private sector computer companies."
That is a very reasonable statement to which I shall return.
The Treasury's response was:
"The Treasury notes the Committee's conclusion. It is not part of the Treasury's role or responsibilities to collect information on the distribution of central government IT business amongst private sector companies. Nor is such data collected by either the Government Centre for Information Systems or the Central Information Technology Unit."
In other words, nobody does that task.
PAC conclusion xiv said:
"We recommend that, as part of the evaluation of bids for individual contracts in future, the implications of concentrating sources of supply in one or a few contractors should be … assessed across the totality"—
I stress the word totality—
"of government IT business."
I shall not quote the Treasury response, but it was essentially complacent and uninformative.
Before I entered the House, I was an IT director of a sizeable company and contributed to the development of an IT strategy for a FTSE 100 company. I would not wish to tempt hon. Members to get in touch with me if their computers are not working—I do not do that—but I have some interest in and knowledge of the development of strategy in information technology.
The Treasury response reveals three things: first, an exclusively departmental focus on such matters—there was no coherent view across government on the issue—secondly, an alarming incoherence of purchasing in an incredibly expensive and complex area, and thirdly, a total lack of an information or technical strategy across government. That is extremely alarming.

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I have tested the theory more recently through a variety of questions on various issues relating to the purchasing of commodity systems such as payroll and purchasing. A number of major contracts in that area are to be let shortly. I was looking for some reassurance that the situation was changing. I am pleased to say that there is a greater willingness to share information across Departments, of which the Minister has assured me. That is welcome indeed, but there is still no clear grasp of the need for a clear strategy or a coherent purchasing approach.
What is required is a definition of commodity services—what we can basically say are reliable functions that all large organisations use to run their affairs. Such systems are available widely and processes on which we can rely have been mapped and coherently identified over a period of time. Purchasing them is relatively straightforward. Then we need a set of differentiated functions which we can say are clearly different for each Department, for which individual systems must be purchased and individual sets of processes defined. That is quite a small list. No steps have yet been taken to identify the difference between those two categories of systems and processes and it is important that that is done.
If we do not do that, we risk the kind of things at which the report hinted, such as continued incoherence of purchasing from individual suppliers that do not know exactly the scale of their relationship with the Government. We do not have, either, any critical technology focus that defines what technical obligations we place on a supplier when it delivers services. That seems to be desperately lacking. I would very much welcome the PAC devoting rather more time to such things so that it can develop some of the very useful thoughts that emerged in the report.
7.37 pm
Mr. Tim Boswell: I congratulate my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) on his appointment as Chairman of the Public Accounts Committee. He made a very thoughtful, clear and trenchant speech, which bodes extremely well for his successorship in the post formerly held by the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), who served for many years with great distinction. We all appreciate his contribution.
I remember from a debate some years ago comments made by the right hon. Member for Ashton—under—Lyne that appear to have nothing to do with public accounts but which stuck in my mind and which I have often quoted. He said that the House should remember that, when somebody comes to see us during a constituency surgery, we are always on their side. That has a relevance to accounting because, given that resources may be limited—they are—when the Committee or the House stops £1 of public money being wasted, that money immediately becomes available for translation into services. That surely is a central function of the House that is not as well recognised as it should be.
I come to the substance of the reports at relatively short notice and I wish only to draw out two major points. The first is the management of long-term construction projects. The problems of the British library have been extensively rehearsed and I do not intend to repeat what has been said. The lessons of the British library have
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a wider application to any major project in which the Government have to stitch things together by working with the private sector, because that is always complicated.
I cite in comparison the success of the Daventry international rail freight terminal in my constituency, which was opened by the Princess Royal last week. The project has been led by the private sector with the enthusiastic support of the local authorities, which have been mainly Labour in the past few years. It has been built in remarkably short time and very successfully. It is not lacking in technology, even though building railways—let alone rail freight terminals—is not something that we have done much of recently. The cost is not trivial either; many millions of pounds were spent over an extensive area. It is a good-news story and the moral is that one main customer—obviously with different interests behind it—and one main contractor leads to a simple relationship, which was conspicuously lacking in the British library project.
The second example is drawn from my ministerial experience and involves the relationships between Departments and their non-departmental public bodies and contractors and others who service Government needs with taxpayers' money in different capacities. We have not got those relationships entirely right, but it is a question of experience and a steep learning curve. I always felt uneasy politically, because if anything went wrong in a quango the Minister was, in the end, responsible. That was only right, but Ministers could not intervene in every executive decision made by a quango. We need a means to manage the relationship effectively and to ensure that quangos are properly run in the interests of the public. I strongly endorse, and will return to, some of the points that have been made in the debate.
I shall cite the specific example from my experience in education of the Higher Education Quality Council, which is an academic-run, rather than a Government-run, body. Some years ago, it considered the academic audit systems in Oxford university. I remember that its report, which was a good read, said, "Of course, we know the university, but we understand that there are a lot of colleges that carry out the teaching and we are not quite sure what the relationship is with them and we cannot look into them at the moment"—or words to that effect. That is the difficulty with all such issues—they unpack as they are investigated.
I shall not comment on the details of the thoughtful speeches by hon. Members from all parties, as is traditional on such occasions. All showed a strong bipartisan instinct, but it would wrong of me not to refer to the speech made by the hon. Member for Bradford, West (Mr. Singh). He spoke with great eloquence, knowledge and a passionate commitment to his constituency and he brought an interesting and helpful perspective to the debate. We know the issues are sensitive, but his speech did great credit to him and his constituency. I have had informal conversations with the hon. Gentleman on a few occasions and I am sure that he will have contributions to make in the future. We look forward to them.
I do not know whether Sir Humphrey still stalks the world, but if he were here he might turn to Jim Hacker when he received one of the reports by the Public Accounts Committee and say, "Of course, Minister, the fact that we have been criticised in the report shows

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the strength of public administration. It is a sign of health, not weakness." If he were to say that, he would be substantially right. I do not say that complacently. The reports to the House rightly reveal severe shortcomings, but they also reveal the strength of the system that has been built up by the Committee and the National Audit Office to delve into the difficulties.
My right hon. Friend the Member for Haltemprice and Howden made a telling point when he said that permanent secretaries—those I have known do not enjoy their appearances before the Committee—are caught in a dilemma. If waste is revealed, it is bad news and a bad mark for their careers; but if savings are revealed, such as £399 million in the case of the information technology strategy, that is also a disaster because the figures must be wrong.
I do not wish to imply that everything is all right—that is not the message of this debate—but we should make the point that public administration is essentially run well, although we all want to make it better. It would be wrong to use this debate as a platform for criticism, although it is understandable that some of our constituents wish to do so. When they have a problem, it is very real to them. When they see change—the closure of a school or a hospital, for example—they extrapolate and think that the education service is failing or the national health service is in crisis. That is not the case. Sometimes things go wrong—I am sure that the Financial Secretary will join me in predicting that things will go wrong in the future, although I will not necessarily make her take the blame politically—but we have to have a system that picks up when things go wrong, reports on them to the House, through the Committee, and does something about them. We have the makings of such a system and, in the members of the Committee, including its Chairman, we have a commitment to do so.
One continuing theme of the debate has been the importance of access. I strongly endorse what has been said. I recall documents—although I cannot remember any specific ones—that had the magic words at the top, "Not for National Audit Office eyes". I do not know—perhaps the Financial Secretary will tell me—whether such documents have been expunged from all Departments. I hope so.
Access is not simply a matter of playing ducks and drakes with the NAO and I hope that Departments do not think that it is. The openness and accountability of the various tributaries through which public money is streamed is the mirror image of what I hope the Government will do—although they seem somewhat diffident about doing anything at the moment—on open government. We need to open up the processes and the way in which money flows and resources are spent to ensure that the taxpayers can be satisfied that they are getting a good service and value for money.
The moral that should be drawn from the debate is that sunlight is the best disinfectant. I do not wish to suggest that our public life or central Government finance are corrupt or unsatisfactory. The civil service, Ministers and the accounting bodies have a strong commitment to seeing that things are done properly. The reports before us tonight cover the failures: the successes do not need to take up our time. The purpose of our debate and of the
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future work of the Committee is to let in as much sunlight as possible to the benefit of us all, and taxpayers in particular.
7.48 pm
The Financial Secretary to the Treasury (Dawn Primarolo): It gives me great pleasure to reply to the debate on behalf of the Government. I start by thanking the Public Accounts Committee for all the hard work it has done in 1996–97. It again proved itself the hardest-working and most effective of our parliamentary Committees. As the hon. Member for Daventry (Mr. Boswell) said, although it is the job of the PAC to throw light where some would wish it not to be cast, it should equally be the Committee's job to praise the many fine things which go on on our behalf within Departments.
One of the reasons for the Committee's effectiveness has been the excellent chairmanship of my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), who brought admirable dedication to all aspects of his job. My right hon. Friend has now stepped down from a position that he held for 14 years, during which time, by my reckoning, the PAC produced about 550 reports. The whole House will want to join me in thanking him for his excellent contribution and, in particular, for his concentration on the need to ensure high standards in public life.
I give his successor, the right hon. Member for Haltemprice and Howden (Mr. Davis), and the new Committee, my bestwishes. I have never heard a Treasury Minister described in such kindly terms as the right hon. Gentleman used—long may it continue! As an accomplished Member of this place, the right hon. Gentleman will understand that it is no dishonour to him if I say that he has a hard act to follow. However, I know that, under his chairmanship, the PAC will blossom. I have every confidence that the Committee will continue to achieve the high standards to which we have become accustomed.
I welcome the hon. Member for Daventry to the debate and to the Opposition Front Bench. I know that it is a difficult job—I did it a number of times—to struggle with so many reports. But he entered into the spirit of the debate, which has been to ensure cross-party support for the pursuit of the Committee's objectives.
I want to pay tribute to the work of two people who have been very senior members of the PAC. The former Member for Uxbridge, Sir Michael Shersby, was a delightful hon. Member who paid great attention to his work and was courteous to every hon. Member. I know that we will all miss him, particularly the members of the PAC. My right hon. Friend the Member for Swansea, West (Mr. Williams) is still a member of the Committee, but cannot be here tonight. He and the late Sir Michael brought experience to the PAC from which we all benefited.
I wish to thank the National Audit Office and the Northern Ireland Audit Office, and their respective comptrollers and auditors general. Although they are not Government Departments, the bodies have a critical role in promoting good value for money and high standards. We depend on their work to a huge extent, and we are lucky to have such effective organisations. I have met the Comptroller and Auditor General and will be visiting his offices in the near future to ensure that I am fully acquainted with the working practices of the body

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I shall try to group my responses to the debate by theme. This has been a thorough debate and it would not be appropriate for me to repeat all the points. The right hon. Member for Haltemprice and Howden highlighted the importance of integrity in controlling taxpayers' money, and referred to value for money. He demonstrated excellently the considerations we need to keep in our minds when seeking efficiency in government. Much still needs to be done, as he said, and he will be seeking out ways with the Committee to improve that role. He referred on a number of occasions—in a thoughtful speech to which I listened with great care—to access for the NAO, as did many other hon. Members.
It was suggested that the NAO should have a statutory right to follow public money wherever it goes; the hon. Member for Bexhill and Battle (Mr. Wardle) suggested that it follow public money into the private sector. The Government are listening carefully and we need to have further discussions as part of our commitment to effective, accountable and better government. I caution hon. Members on some of the points made this evening, as these are complex issues—we must look at who audits whom.
pay tribute to the maiden speech of my hon. Friend the Member for Bradford, West (Mr. Singh), who paid tribute to his predecessors—particularly Max Madden, whom we all held in high regard. He will have realised that his speech was incredibly well received by the House for its fluency, wit and confidence, and for the sensitive points he made on behalf of his constituents. He referred to the drugs problem in his constituency, and underlined his commitment to tolerance in our society and the world. Like all other hon. Members, I very much look forward to his future speeches which will add greatly to our debates.
The right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) raised a number of points, and referred particularly to quangos and their accountability. After consulting on a range of issues, the Government will publish a White Paper on quangos encompassing the points that he made about the importance of accountability. He referred also to the NHS and to the 17th report. My right hon. Friend the Secretary of State for Health will publish a Green Paper on a new health strategy aimed at picking up the issues to which the right hon. Gentleman referred. We must make sure that my right hon. Friend the Secretary of State is made aware of the right hon. Gentleman's comments.
Several hon. Members referred to the national lottery, and in particular to the access of the NAO to Camelot's records. As is now well known, the Department for Culture, Media and Sport is looking at this matter.
My hon. Friend the Member for Shipley (Mr. Leslie) talked about accountability and quangos, and referred to resource accounting and budgeting, to which I shall return in a moment.
The hon. member for South-West Hertfordshire (Mr. Page) made some important points about the role of the PAC and reflected on his experience on the other side of the fence—dare I say it, he is a poacher turned gamekeeper. I am sure that his experience will prove valuable.
The hon. Member for Bexhill and Battle spoke about National Savings and referred to the Turkish universities project. There is nothing to be added to what the report on the latter said, but I can tell him about developments
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on National Savings, as he is absolutely right to be concerned, and he and other hon. Members have starkly exposed the problems.
The 1996–97 accounts for all products have been completed and passed to the Comptroller and Auditor General for audit—that is very important—but the agency has an urgent programme of work to resolve past discrepancies and improve financial controls. It is too soon to know the final outcome of work on discrepancies and unreconciled balances, but major improvements have been instituted, and I am sure that members of the Committee will continue to take an interest in that.
My hon. Friend the Member for Liverpool, Garston (Maria Eagle) talked about why she was on the Committee and about not getting taken in. In my experience of her considerable abilities, there is absolutely no chance of her being taken in by anyone. Her explanation of the development of the Committee's role since its first debate in 1905 and the comments of Winston Churchill showed the complexities that exist for Parliament in pursuing and ensuring accountability in relation to public money. I am not sure whether I would use the phrase, "quaking in their shoes", but I hope that civil servants will strive not to have to come before the Committee and will realise that its work assists them in discharging their duties.
My hon. Friend the Member for South Derbyshire (Mr. Todd) referred to the eighth report. I struggled somewhat with some of the technical points—they seemed technical to me—about systems and processes, but I listened very carefully, because he made some important points. The wheels are turning and, in our facilitating and enabling role, there is a cross-departmental Committee, under Treasury chairmanship, to consider data collection and market shares. We should look carefully at my hon. Friend's other points in Hansard and add them to the points already made by the Committee.
There must be transparency in relation to the work of Departments and agencies. Parliament and the public have a right to know what is going on and need an assurance that the Government are doing what they say they are doing. Effective public sector audit has an important part to play in achieving that, although other factors are important, including the quality of financial reporting and the openness to which the hon. Member for Daventry referred.
Primarily for those reasons, the Government announced soon after taking office that the National Audit Office would be invited to audit the assumptions underlying the forecast of public finances. I hope that hon. Members will agree that that innovation was not only an important step in openness but a clear statement by the Government about the high regard in which they held the NAO. The acceptance of that outside the House shows the high regard in which the NAO is generally held.
It was also with a view to promoting openness that the Government announced in July, in response to the 22nd report, the abolition of "Not for NAO eyes". I can confirm that that applies across government. To get the best out of the public sector audit, we need an effective system of parliamentary scrutiny and accountability; that is why we are lucky that the PAC lies at the heart of our system. It is no surprise that the Committee's work has been a model for other systems in other Parliaments

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around the world. The prospect of having to appear before the PAC when things have gone wrong provides a powerful incentive to accounting officers to get things right in the first place.
Much has been said about the need to improve the management of projects. The right hon. Member for Caithness, Sutherland and Easter Ross talked specifically about the new British library. By no stretch of the imagination could that project be described as well managed or a model for others to follow. The listed 12 lessons that have been urged on the Treasury to ensure that other Departments and agencies are aware of the problems show clearly that the project was not well managed.
The Treasury originally planned to issue further guidance in March this year on achieving value for money in construction procurement, including project management, but decided to improve the value of the guidance by taking account of the Construction Industry Board's latest codes of practice, which were to be issued in a final form this summer, and to consult widely with the industry's umbrella bodies.
As a consequence, the first batch of new guidance will be available early in December. This is the first time that the industry has been so closely involved in drawing up guidelines. I hope that the guidelines will go a long way towards dealing with the project management points so starkly made in the report. Public-private partnership is another significant way of improving value for money. We look to the Committee and the NAO to make a continuing valuable contribution in the development of such partnerships, to secure the efficient delivery of public services. The Government have acted swiftly: we commissioned an independent review of the previous Government's private finance initiative, and the recommendations of the Bates review, delivered in June, will streamline and standardise procedures.
The House will note that the Bates recommendations endorsed those of the NAO in the two reports—on the Skye bridge and on the replacement of the national insurance recording system—not yet reported on by the Committee. It is vital that, as mechanisms develop for delivering public services, we ensure that accountability and auditing mechanisms develop alongside them. I know from the comments of the right hon. Member for Haltemprice and Howden that he intends to keep that firmly on the agenda.
The use of resource accounting and budgeting represents an enormously important change in the way in which the Government run business; in the long term, its introduction will be the most effective way of promoting efficient asset use. The PAC is particularly interested in that. Hon. Members have said that they want to ensure that the Government proceed at a pace that is respectable but effective.
The introduction of resource accounting and budgeting represents the biggest change in financial control within Government since the Gladstone reforms more than 100 years ago. The support of the Committee and the National Audit Office for resource accounting and budgeting is crucial if we are to implement the changes effectively.
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In taking forward the proposals, the Government will pay very close attention to the Committee's views. I note its recommendation that there should be an extended period of live, parallel running of the present cash-based system and the resource-based system for voting and accounting for Supply. The Government believe that there is already sufficient time for dry running—if I may call it that—and testing in this nine-year project, and are confident that Parliament's ability to exercise control will not be jeopardised. None the less, it is very important and we shall pay attention to it.
The right hon. Member for Haltemprice and Howden referred to the deployment and disposal of assets that the Government no longer require. On Monday, the Government will publish the national asset register, so delivering on our manifesto promise that all Departments will have drawn up a comprehensive list of their assets by November 1997. It will be the first time that any Government have had a full picture of all the assets that they own. It sounds breathtaking that that has not happened before—the hon. Member for Bexhill and Battle made a point about National Savings: we did not know what all our assets were. I understand that there have been some interesting discoveries. That will be a vital starting point in the comprehensive spending reviews for an examination of whether efficient and appropriate use is being made of the Government's assets. That echoes the points made by the right hon. Gentleman in his opening remarks.
Mr. Maclennan: We await with unbated curiosity the publication of the document. May I, with just a wry smile, inquire whether the Minister knows whether included among the assets are the works of art that the Public Accounts Committee discovered had not been cared for by Departments with any assiduity or concern in past years?
Dawn Primarolo: I am sure that the register will make fascinating reading and include the points that the right hon. Gentleman made, and perhaps cross-reference to previous PAC reports. It may take his fancy. He explained earlier why he identified particular points in reports.
Public audit and, more generally, the work of the Public Accounts Committee has a major role to play in promoting high standards in central Government bodies. It is particularly crucial that we use as our touchstone, as many hon. Members did, the eighth report of the 1993–94 Session, "The Proper Conduct of Public Business". Many hon. Members will share my view that among the many reports that the Public Accounts Committee has completed in recent years, "The Proper Conduct of Public Business" ranks first in importance.
In reflection of that, the Treasury's new handbook—to pick up on the point made by my hon. Friend the Member for Weaver Vale (Mr. Hall)—"Regularity and Propriety" includes the checklist from the eighth report in full. No doubt that is why my right hon. Friend the Member for Ashton-under-Lyne described it as wholly admirable. I am pleased to tell the House that more than 8,000 copies have been circulated. I would also draw the attention of the House to the fact that, in the Treasury minute in response to the Committee's report on the Plymouth development corporation, the Government emphasised the importance of high standards of conduct at all levels in the public service.

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I remind the House that, in seeking better value for money and greater accountability for the taxpayer, we are all on the same side. Although the 25 reports deal with activities under the previous Government, the present Government fully accept the need to carry their lessons into the future. For this purpose, we need to count not only on our own efforts but on the continuing vigilance of the Committee, the National Audit Office and other national audit agencies.
Good government cannot happen without vigorous external scrutiny. We look forward to many more years of constructive engagement with the Committee. The speeches made by hon. Members this evening demonstrate the expertise and ability that they bring to that role, under the chairmanship of the right hon. Member for Haltemprice and Howden. I look forward to continuing excellent relationships between me, the Treasury and the Committee as we strive to reach these objectives.
Question put and agreed to.
Resolved,
That this House takes note of the First to Twenty-fifth Reports of the Committee of Public Accounts of Session 1996–97 and of the relevant Treasury Minutes (Cm 3559, 3577 and 3714), with particular reference to the following Reports:
Second, Progress in Completing the New British Library (HC 38); Fifth, Highways Agency: The Bridge Programme (HC 83);
Eighth, Information Technology Services Agency: Outsourcing the Service Delivery Operations (HC 98);
Thirteenth, HM Treasury: The Second Sale of Shares in National Power and PowerGen (HC 151);
Sixteenth, The Work of the Directors General of Telecommunications, Gas Supply, Water Services and Electricity Supply (HC 89);
Twenty-second, British Rail Maintenance Ltd.: The Sale of Maintenance Depots (HC 168).

Insulin Pen Needles
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Betts.]
8.15 pm
Mr. Adrian Sanders: Thank you, Mr. Deputy Speaker, for the opportunity to raise a very important matter. I declare an interest as an insulin-dependant diabetic and user of the pen needle system.
There is an irony about the timing of the debate. The last time that diabetes was raised in an Adjournment debate, by the hon. Member for West Lancashire (Mr. Pickthall), was in June 1996. The Minister responding at that time was Gerald Malone, who cannot be here today as he is quite busy—and I hope that he will not be here next week either. The debate was wide ranging and touched on the pen needle issue. The then Minister's reply was as follows:
"The BDA"—
the British Diabetic Association—
"submitted … a comprehensive document earlier this year, which is being considered by Ministers and officials in the Department. Although it was not my specific responsibility within the Department, I was interested to see the document in detail. It was a first-class effort in putting together a sound, economically based case as to why it might make sense to move in that direction.
The hon. Gentleman will not be surprised that I cannot give any commitment about that tonight, but I can reassure him that the matter is being treated extremely seriously. Discussions are under way, and I hope that we can make some progress towards reaching a common position and an understanding of the facts and economics that underlie the case made by the BDA."—[Official Report, 5 June 1996; Vol. 278, c. 697.]
I hope that the present Minister will be able to confirm that further progress has been made in the past 18 months.
Diabetes is a common condition in which the amount of glucose in the blood is too high because the body is unable to use it properly. This is because the body's method of converting glucose—sugar—into energy is not working as it should.
The British Diabetic Association estimates that 1.4 million people in the United Kingdom have diabetes, and there might be as many as 1 million more undiagnosed. Diabetes is the single biggest cause of blindness among people of working age in the United Kingdom. Men with diabetes are two to three times more likely to suffer from coronary heart disease than the general population, while women have a four to five times greater risk. The risk of stroke is increased two to three times in people with diabetes. Half of lower limb amputations, other than those following trauma, are a consequence of diabetes. People with diabetes have a 15 times higher risk of amputation than the general population.
There are two types of diabetes: insulin-dependent and non-insulin-dependent. Today we are discussing the former, in which the condition is treated by insulin injections and diet. It is worth remembering that before the discovery of insulin such diabetics simply died; today they can lead normal lives, but the key is control of their condition. Well-controlled insulin-dependent diabetics will test their blood sugar levels regularly and take appropriate action in the light of the results.

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The health service provides a number of items on prescription to help diabetics to maintain control: insulin, in both vial form for syringe injections and cartridge form for the pen needle; tester strips so that people can test their blood in glucose meters; lancets, the little pricking devices to enable the blood to be drawn for the blood test; and syringes—but not pen needles. Although general practitioners and hospitals are free to supply pen needles, it is unfair for health professionals to be placed in the position of determining needy cases. It is also unfair that access to free pen needles depends on where the diabetic lives or who is consulted for advice.
My hon. Friend the Member for Somerton and Frome (Mr. Heath) showed me a letter today from one of his constituents who lives in a part of the country where free pen needles are not available. His constituent—who was progressing from non-insulin-dependent diabetes, treated by tablets and diet, to insulin-dependent diabetes—was offered the pen but was aghast at having to pay for the needles. All hon. Members should be aware of that problem, because we all have constituents in that position. Pen needles cost patients around £10 per box of 100. Unlike syringe needles, pen needles can be used more than once; consequently, some diabetics will need only two boxes a year, while others require four or five and a minority will use slightly more.
Using a pen device is much more convenient as it is self-contained. There is a stigma attached to hypodermic needles, whereas the pen is a well-disguised object that enables people to inject themselves discreetly—sometimes when other people are around, but without their noticing. That is not possible with a syringe, which has to be drawn up, thereby broadcasting all sorts of connotations to those who witness it. The pen is discreet because it looks like a fountain pen; it is quicker than having to draw up a syringe; and it is much easier to use, especially by children, people with arthritis, the elderly and the visually impaired. Instead of drawing up the dose of insulin, one simply clicks the pen and one can hear the dose of insulin as it goes in. That is a significant benefit to the groups I listed. Many people need mixed insulin, in which case they have to carry two vials and draw from both before injecting themselves. With the pen, the insulin can be ready-mixed in the cartridge, thus avoiding the necessity of carrying around glass bottles in one's pocket or handbag.
The pen system encourages better control of blood sugar level and that is the key consideration. It reduces the chances of the onset of costly health complications. Yet despite all that, three quarters of people still use a syringe.
It is estimated that providing pen needles on prescription would cost the health service budget around £5 million a year. Diabetes as a whole costs the national health service about £2 billion a year, mostly from acute care. Poor control leads to complications, often involving acute care. The latest figures I have been able to get are for 1993–94, when 926 leg, 155 foot and 812 toe amputations took place in England with diabetes as the main diagnosis—each and every one a costly operation, necessitating a hospital stay.
In addition, a considerable amount of money would have to be spent on adaptations to housing and equipment; and consequent loss of employment might lead to almost
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complete—in some cases complete—dependence on the welfare system. Poorly controlled diabetes can also lead to blindness, kidney failure, heart disease and strokes, with all the associated additional costs to the state. When the savings to the NHS acute care costs from better control of diabetes are taken into account, the overall cost of supplying pen needles on prescription is much reduced—or could even result in savings.
Other savings add weight to the economic case for free pen needles: for example, district nurses would no longer have to visit at home those people who need assistance with injections through a syringe; improved control would lead to fewer days off work for those who are sick as a consequence of poor control; and the nation's welfare bill would be reduced.
A total of 370,000 people in this country inject themselves with insulin in order to stay alive. Too many of them are discouraged from using a proven method of reducing their risk of complications. To sum up, the current system is unfair: access to free pen needles depends on where one lives, not on one's medical needs. Children, the elderly, people who have arthritis or are visually impaired will benefit the most. It makes good economic sense and it is logical. A decision from the Government is long overdue and I trust that the Minister will be able to respond positively today.
8.26 pm
The Minister of State, Department of Health (Mr. Alan Milburn): I am grateful to the hon. Member for Torbay (Mr. Sanders) for raising such an important issue. I am aware of his close interest in diabetes as the chairman of the all-party group on diabetes. I know that the group is due to meet my noble Friend Baroness Jay, a Minister of State in the Department, in the new year, and I am sure that the subject will be discussed in detail during that meeting.
The subject is an important issue for patients and one on which I am determined that we should make substantial progress. The hon. Gentleman asked whether I was able to report progress and I hope that, towards the end of my speech, I shall be able to reassure him that progress is being made.
Before I respond on the specific issue of insulin pen needles, it might be a helpful if I put it into the wider context of what the Government are doing to tackle diabetes more generally. We take the matter very seriously. In its different forms, diabetes is estimated to affect 2.4 per cent. of the adult population in this country—more than 1 million people—and 10 to 15 per cent. of those with diabetes are dependent on regular insulin injections.
As the hon. Gentleman rightly pointed out, diabetes and its complications often cause severe problems for those affected, their families and their carers and, inevitably, the disease imposes heavy burdens on the health services. If diabetes is not properly managed, it can cause terrible long-term complications such as blindness, renal failure and cardiovascular disease.
Obviously, the Government are concerned to tackle these problems. I shall briefly outline five important signals of the priority that we attach to improving services for people with diabetes. First, let me point out that we spend over £1 billion a year on the various services and drugs to help those with diabetes and associated problems.

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That is over 5 per cent. of the budget for the NHS. It is useful to bear that in mind in considering the issue of pen needles.
Secondly, my right hon. Friend the Secretary of State for Health launched new guidance to the NHS last week, to coincide with World Diabetes Day. The guidance, entitled "Key features of a good diabetes service", was developed by a small group involving the Department of Health, patients, GPs, nurses, NHS managers and the British Diabetic Association. It is important to put on the record the value that the Government accord to the BDA's work on behalf of people with diabetes, in its roles as adviser and advocate.
The new guidance sets out to the NHS how health authorities working with GPs can secure and deliver a good diabetes service. It places special emphasis on partnership: the organisation of diabetes services can involve many parties—primary and community care teams, secondary care teams, carers and people with diabetes, who, of course, have a pivotal role in managing their care. We want to make sure that services for people with diabetes are better tailored to the needs of individuals.
The guidance emphasises prevention and the need to raise awareness of diabetes. It has long been recognised that the education of people with the disease is vital for promoting effective self-care. The guidance was welcomed by the British Diabetic Association, which described it as "a major step forward". It is significant that the association gave it such a positive response.
Thirdly, the Government have endorsed the international St. Vincent declaration, which highlights the scope for reducing the complications resulting from diabetes, and proposes a number of outcome targets, which include the reduction of cases of new blindness due to diabetes by one third or more; the reduction in the numbers entering end-stage diabetic renal failure by at least a third; and the reduction of lower limb amputations for diabetic gangrene by a half.
Those are challenging targets and are widely recognised as such. It is important for us to make progress on them. Indeed, I was pleased that the follow-up conference to St. Vincent, which was held in Athens last year, accorded this country the honour of being in the vanguard in Europe of improving diabetes services. We have done well, but we are not complacent, as there is still much progress to be made.
We must continue to strive to improve the care of people with diabetes and the quality of their lives. We are pledged to work in partnership not only with the NHS and health professionals, but with the British Diabetic Association and the all-party group on diabetes. We are always happy to discuss these issues in the House or in private meetings, if that is helpful to the hon. Gentleman.
Fourthly, the Government support much vital research into diabetes. The Medical Research Council, which is the main agency through which the Government support medical and clinical research, spends about £3 million a year in this area. The Department of Health is funding three important studies at a total value of £1 million, which is on top of the Department's research and development programme.
Finally, there is a whole programme of work in support of diabetes, such as clinical audit and monitoring. We have recently commissioned new national clinical
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guidelines for non-insulin-dependent diabetes and other clinical effectiveness materials, which will ensure that the very best practice in the NHS is shared better in the future.
I hope that the hon. Member will forgive me for sketching some of the general developments in the treatment of diabetes that the Government are intent on promoting. We are considering the specific issue of pen needles in the context of that broad programme.
For some time, we have been discussing the merits or otherwise of listing insulin injection pen needles and the pens themselves in the drug tariff. That would allow the needles to be prescribed on the NHS by family doctors. At present, insulin injection syringes, and their related needles, are listed in the drug tariff, so are prescribable on the NHS by GPs.
The issue of the availability of injection pens is slightly more complex: perhaps even more complex than the hon. Gentleman suggested. There are two types of pen. The disposable pen is prescribable only because it is a container for the insulin, and the prescription for the insulin automatically includes its container. The reusable pen, on the other hand, does not come pre-filled with insulin, so it is not automatically prescribed when the insulin is prescribed. That may be as clear as mud, but that is the position. Indeed, there is less need to prescribe reusable pens, as they usually last two to three years. I understand that reusable pens are made widely available to patients by the manufacturers, which often distribute them free, sometimes through diabetic clinics.
Needles for injection pens fit either type of pen, but are not interchangeable with the needles used with syringes. They are not currently listed in the drug tariff, and may not be prescribed on the NHS by family doctors. That sets out the rather complicated current position.
The Government are considering whether pen needles should be placed on the drug tariff list, so that they could be prescribed with the insulin. We are giving the issue serious consideration, as I have made clear to the hon. Gentleman in parliamentary answers or when he has written to me. It is said that many people find the pens more convenient and comfortable to use than syringes. We do not dispute that, and we acknowledge that convenience and comfort are important considerations when people have to inject themselves frequently.
The major stumbling block is quite simply the cost. The NHS is not a bottomless pit, and we have to use taxpayers' money responsibly. We must ensure that it is used as efficiently and wisely as possible. Pen needles cost about four times as much as syringe needles. Our estimate is that the costs of placing the reusable pen on the drug tariff could range from £10 million a year at the lower end to £30 million a year at the upper end, depending on the uptake. If people switched from syringes to pens, or from reusable pens to disposable pens, costs would range towards the upper figure.
I shall be frank with the hon. Gentleman. The problem at the moment is that we are unclear about whether, or to what extent, such switches are likely to occur, and whether the cost of listing injection pen needles would be significantly higher than the British Diabetic Association's 1995 estimate of £9.5 million over two years.
However, costs cannot be the only consideration when such important issues affecting so many people are involved. The Government are committed to ensuring that

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we try to improve the care of people with diabetes and their quality of life. For that reason, I have asked officials in the Department of Health to examine, in discussions with interested parties if necessary, whether we can be more certain on the cost points. They have held a number of meetings with the major suppliers, and negotiations are currently under way.
It is still a little early to place a precise time scale on this work, particularly given the delicate nature of our discussions with the companies concerned. We do not want to delay decisions unnecessarily and, equally, we do not want to take premature decisions if costing issues still
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have to be resolved. Nevertheless, this is an important issue on which we are determined to make progress in the interests of patients and of the NHS more generally.
The hon. Gentleman was right to seek this debate. Ministers have signed many letters in response to hon. Members who have expressed concern about the issue. The Government are aware of the concerns in the House and in the country. Many people suffer from diabetes, and many people have relatives, friends and neighbours who have diabetes. We want to make progress, and I shall be happy to update the hon. Gentleman in due course when we have advanced a little further.
Question put and agreed to.
Adjourned accordingly at twenty-two minutes to Nine O'clock.