Commons Sitting of 2 November 1998

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
Oral Answers to Questions
  DEFENCE
  The Secretary of State was asked—
  DEFENCE

    Redundant Land
    Mr. Ian Bruce: If he will make a statement on the disposal of redundant MOD land (a) generally and (b) with specific regard to HMS Osprey on Portland. [55877]
    The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): My Department keeps the size of the defence estate under continual review. Any property that is declared surplus to operational requirements is sold, as soon as possible, on the open market, with the benefit of planning permission.
    My Department is considering alternative uses to which the HMS Osprey site may be put. Our title to part of the land at HMS Osprey allows prescriptive rights of purchase to the Crown Estate, to which it originally belonged. A disposal strategy for those parts of the site that are not subject to these prescriptive rights is in progress. No final decisions have yet been taken.
    Mr. Bruce: I thank the Minister for his visit to Portland and his attention to the problem. As he knows, I wrote to him as soon as he took office to ask whether it was necessary to close the air station and whether the site could be put to an alternative use. I was told that there was no alternative use. At least three companies are willing to buy the site and create jobs, but they have been told that they cannot even talk about making a bid until March next year. I would be happy if the Minister came forward with an alternative MOD use, but it is not good enough that, at this late stage, the Ministry is halting all its negotiations with the Crown Estate, among others.
    Mr. Spellar: The hon. Gentleman is right to say that he has raised the issue with me, as has the local council. I thank him for his kind comments on my visit to Weymouth and Portland, where I had an excellent meeting with the local council, chaired by Councillor Kay Wilcox. I fully understand the concerns that have been expressed, but the hon. Gentleman must understand that we have to explore every other possible defence use for the site. Given the concern expressed by the community, which has rendered enormous service to the Ministry of
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    Defence and the armed forces for many years—indeed, centuries—I have asked the Department to try to speed up the process to ensure that the site is returned to productive use, in one way or another, as soon as possible.
    Ms Jackie Lawrence: May I refer the Minister to the site of Trecwn in my constituency, which was declared redundant by the previous Government, and sold earlier this year? Have any discussions taken place between the Ministry of Defence and any company or individual about the possible storage of nuclear waste, including decommissioned nuclear submarines, at the site?
    Mr. Spellar: We are aware that the company that bought the site has submitted to the House of Lords Select Committee on Science and Technology some proposals for the management of radioactive waste. However, the Committee is not due to report for 12 months, when we will publish a White Paper proposing a national strategy. After that, local council planning permission would have to be obtained. My hon. Friend will know that Pembrokeshire county council has revealed that it is implacably opposed to any proposals to store nuclear waste of any type at Trecwn. The matter is no longer in our hands, as the previous owner, but is in the hands of the various radiological regulation agencies and the local council. Both the local council and the local Member of Parliament have made their views clear.

    Eurofighter
    Mr. John Wilkinson: What is the estimated interval between the entry into operational squadron service with the Royal Air Force of the Eurofighter Typhoon aircraft and its equipping with beyond visual range air-to-air missiles. [55878]
    The Secretary of State for Defence (Mr. George Robertson): Eurofighter will enter service armed with the advanced medium-range air-to-air missile—AMRAAM—AIM-120B as its beyond visual range air-to-air missile. A competition is being run for the development and production of a next-generation beyond visual range air-to-air missile, but that will not enter service until a few years after Eurofighter.
    Mr. Wilkinson: Will the Secretary of State ensure that there is no hiatus between the entry into service of Eurofighter and its equipping with a genuine beyond visual range air-to-air missile, such as that provided by Raytheon, the American competitor, or by Meteor, the European solution? If an interval is caused by Treasury parsimony or a German defence review, can it be filled by an extended range version of AMRAAM, so that the Royal Air Force squadrons do not suffer a lack of capability?
    Mr. Robertson: Obviously, we would not want any gap in capability, but it has long been recognised that there will be a gap between the first delivery of Eurofighter in 2002 and the BVRAAM currently being examined. The hon. Gentleman mentioned one bid, but there are two, and each is being assessed in the normal way. The implications of using one system rather than the

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    other will be examined carefully. We intend to maximise the value of Eurofighter when it comes into service, and its weaponry is therefore of acute importance.
    Mr. Ken Maginnis: Is the Secretary of State aware that there is some sense of a stitch-up over BVRAAM, and that it is suggested that political expediency, rather than strategic merit, is governing his Department's thinking? Will he assure competing bidders that their competing merits will be the sole criterion in determining the BVRAAM programme?
    Mr. Robertson: Yes, I can give the hon. Gentleman that assurance. There is no question of a stitch-up. Two bids have been made, and they will be assessed in the normal way. The only criterion that matters is the equipping of the Eurofighter with the best possible weaponry.
    Mr. Michael Colvin: Notwithstanding the Secretary of State's answer to my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), he will acknowledge that the final bids are between a British BVRAAM and an American BVRAAM. Does the right hon. Gentleman acknowledge that, if the Ministry of Defence decided in favour of the American product, it would be possible for the United States of America to block the sale of the Eurofighter—the Typhoon—to third countries under certain circumstances, and that that would be damaging to British industrial and security interests?
    Mr. Robertson: I wish to make it clear that one bid is European, from Matra BAe, and the other is American. We are assessing both bids using the usual criteria. We hope to announce the outcome of the competition in 1999. All the factors mentioned by the hon. Gentleman and the previous questioners will be taken into account.

    British Beef
    Mr. David Kidney: If he will make a statement on his Department's policy in respect of the supply of British beef for the United Kingdom's armed forces. [55880]
    The Secretary of State for Defence (Mr. George Robertson): I am pleased to advise the House that our food supply contractor, Booker Foodservice, is buying from British sources 100 per cent. of beef for consumption by our forces based in the United Kingdom. That follows agreement by the European Commission to proposals from me and my colleagues at the Ministry of Agriculture, Fisheries and Food to allow access to intervention stocks of high-quality British beef at competitive prices. We are unable to use British beef for our forces overseas at the moment because of the continuing ban on the export of British beef.
    Mr. Kidney: I thank my right hon. Friend for that news, which was even better than I had expected. It will be welcomed by all farmers, especially those in the two branches of the National Farmers Union in my constituency. On their behalf, and in view of my right hon. Friend's emphasis on the quality of British products, may I push the boat out by asking whether he can achieve the same for British lamb for the British armed forces?
    Mr. Robertson: I wish that we could do so. British lamb is the best in the world. I used to help to rear it, and
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    I want British troops to eat it. I hope that the industry will compete to get it on troop canteen plates. I pay tribute to my hon. Friend the Under-Secretary of State for Defence, who has spent a lot of time and energy on this matter. An attempt was made to procure a substantial forward buy of British lamb, but that was not successful as the industry was not capable of coming forward with it. Urgent discussions continue with the farming industry and the Meat and Livestock Commission. We shall ensure that we use every effort to put the maximum amount of British lamb on British forces' plates.
    Mr. Robert Key: Of course that is good news and we welcome it, but why has it taken so long? It was first negotiated with the commission back in February and an agreement was announced in the House in June. Six months on, fresh beef is still not to be used; the meat is out of the intervention stocks. What about getting on with British lamb? The Meat and Livestock Commission, the National Farmers Union and the contractor are willing to vary contracts and do their best with lamb. What is holding up the sale of British lamb, because at present none is used by British forces?
    Mr. Robertson: I know that the public get a bit tired of being reminded that a Conservative Government were in power 18 months ago, but that Government put in place the procedures that we are having to use. My hon. Friend the Under-Secretary has used his energy and ingenuity to make substantial strides, despite the straitjacket that he inherited. At the start of October, the intervention stocks were released and now 100 per cent. of British troops are being supplied with British beef.
    The discussions on British lamb continue, but we are up against the fact that the bulk of British lamb in this country is provided fresh or chilled while the Ministry's requirement is for frozen lamb. We are discussing with the contractor and the industry the best way to get the maximum amount of British lamb on to British forces' plates.
    My hon. Friend's efforts in other areas have been particularly successful: 100 per cent. of the pork and 50 per cent. of the bacon used by British forces is British. We are trying to ensure that, within the constraints of value for money for the British taxpayer, we do the best for British farming we can.

    Cadet Units
    Mr. Nigel Waterson: What proposals he has to encourage cadet units. [55881]
    The Minister for the Armed Forces (Mr. Doug Henderson): The Government recognise the value of cadet forces to both civilian and military communities. As a further demonstration of our commitment to encouraging cadet units, we intend to make a modest increase in their funding.
    Mr. Waterson: Does the Minister share my pride that, this Sunday, many of the Remembrance Sunday services that I and hon. Members will attend will have present not only regular and Territorial Army units but local cadet units? Has he estimated the cost of providing alternative accommodation for cadet units that use TA centres that are to be closed?
    Mr. Henderson: I very much share the hon. Gentleman's pride in the way in which our cadet forces

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    attend our various commemoration services, including the commemoration of Armistice day this Sunday. I took great pleasure in attending the Trafalgar day celebrations a couple of weeks ago with them. As my right hon. Friend the Secretary of State will announce, a statement will be made to the House on the Territorial Army. It will include mention of the provision made for cadets. The costings on that are not yet finalised, but we gave a commitment in the debate on the strategic defence review that any cadet unit that was displaced would be reallocated to a location at least as good as the one that it left.
    Mr. Andrew Mackinlay: Although I welcome the increase in resources for the cadets, may I raise the case of the redundant minesweepers Kellington, Pagham and Iveston, the last of which is in my constituency in Tilbury dock, and is looked after by the training ship Boxer? I understand that the Ministry of Defence wishes not to renew the leases on the vessels to the cadets but to sell them to the cadets. I urge my hon. Friend to use his good offices to ensure that any sale price is a token one, bearing in mind the invaluable benefit that countless youngsters have received from the opportunity of spending time on the vessels, which would otherwise have to be towed away because they are totally redundant. They are looked after proudly by the naval cadets. I hope that my hon. Friend will use his good offices to ensure that they remain in the stewardship of the cadets.
    Mr. Henderson: I am grateful to my hon. Friend for that question. I assure him that the Government greatly value the contribution of those vessels in encouraging cadet units around the country, including his constituency. I am reviewing whether it is possible to continue the existing arrangements or whether we should try to sell them to the cadet forces. I am taking into account all factors, including health and safety, and practicability.
    Mr. David Heath (Somerton and Frame): Will the Minister look at links with the Territorial Army in areas where the TA unit is the only Army presence in a county, as in the case of the Somerset and Cornwall Light Infantry? Will he also look at the increasingly irrelevant and outdated distinction between local cadet forces and the independent schools' combined cadet forces? Do we want such a distinction in the present day armed forces?
    Mr. Henderson: I assure the hon. Gentleman that any relocation that takes place because of changes announced in the Territorial Army review will be on the basis that existing cadet units will be placed in accommodation that is at least as good as their present accommodation. That is just as true in the hon. Gentleman's constituency as it is throughout the country.
    I want to encourage all cadet units in the three services to maximise their input and to seek to recruit as many young people as they can. That will benefit not only the communities where those young people live but our recruiting plans for the three armed services.

    Territorial Army
    Mr. Gerald Howarth: What plans he has for the Territorial Army in the Aldershot constituency. [55884]
    The Minister for the Armed Forces (Mr. Doug Henderson): A statement on the future of the Territorial
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    Army will be made once Ministers have had a chance to consider the matters that have already been discussed by officials, including those matters that concern the hon. Gentleman's constituency.
    Mr. Howarth: We have been assured for the past two weeks that the Government will make a statement. This is a matter of great concern not only in my constituency but throughout the country. Is the Minister aware that his lack of decision making on this matter is deeply unsettling to Territorial Army units? I hope that the Minister can give me an answer before I go on an exercise with the 10th (Volunteer) Battalion the Parachute Regiment in two weeks' time.
    Mr. Henderson: The hon. Gentleman might like the Government to rush into a decision, but territorials throughout the country, especially in his constituency, would not want us to do so. Extensive consultations have taken place with units throughout the country, including in the hon. Gentleman's constituency. The general guidelines, which were well debated in the House two weeks ago during the strategic defence review debate, were made clear to TA units and other interested parties locally, and the prime motives of the review were emphasised. How the objectives will be implemented locally has been the subject of consultation, and we shall make a statement to the House once the matter has been assessed.
    Mr. Menzies Campbell: Although I accept the Government's good faith, does the Minister not realise that uncertainty over the proposals is damaging to morale and that some units are experiencing a haemorrhage of both officers and men? Why do the Government not open the books, publish the detailed proposals, declare a six-month moratorium and allow us to have a properly informed debate about the future of the TA?
    Mr. Henderson: I know that the hon. and learned Gentleman raises that question with the best of motives, but the consultation process has been widely received throughout the country and suggestions have been made on how the changes can be implemented. That is the proper way to proceed. A statement will be made once we have assessed what the consultation has thrown up.
    Mr. John Maples: The Minister complacently accuses us of trying to rush him into a decision. No decision can have hung around for longer than this one. He seems to be totally unaware of the delay's dreadful effects on motivation in the Territorial Army. Communities are desperately worried about the closure of TA halls. Moreover, the secrecy with which everything is being done has made matters much worse. Will he ensure that definitive announcements are made as soon as possible and that we do not have to wait until a convenient moment when they can be buried in the Government's news management agenda?
    Mr. Henderson: Of course the announcements will be made as soon as possible, but, unlike the previous Government, we believe in consulting people about our proposals before making a decision that we announce to the House.

    Asbestos (Compensation)
    Mr. Andrew Dismore: If he will make a statement on compensation arrangements for service personnel and former service personnel who suffer from asbestos-related conditions contracted before the amendment of the Crown Proceedings Act 1947. [55885]
    The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): Compensation arrangements for service personnel and former service personnel who suffer illness as a consequence of exposure to asbestos are the same as for those killed, those injured or those who develop a disease from any other cause related to their service. The non-retrospective repeal of the Crown Proceedings Act 1947, on 15 May 1987, by the Crown Proceedings (Armed Forces) Act 1987 gave service personnel the right to claim common law compensation from the Ministry of Defence. Compensation arrangements for former service personnel for illness caused before the repeal of the 1947 Act is paid in the form of a war pension and other allowances by the War Pensions Agency of the Department of Social Security. The Government's arrangements for compensating former service personnel are broadly comparable with those for former civilian MOD employees.
    Mr. Dismore: Is my hon. Friend aware of the sense of injustice felt by many who are now being diagnosed as suffering from asbestos-related conditions such as mesothelioma, which is invariably fatal and invariably painful, and results in the rapid onset of symptoms leading to death? Does my hon. Friend agree that that sense of injustice is highlighted by the 1987 Act? People who were exposed to asbestos before 1987, but are experiencing symptoms now, may feel somewhat hard done by in comparison with people who have suffered other injuries since 1987.
    As my hon. Friend knows, I have campaigned on this issue for some time, along with my hon. Friends the Members for Plymouth, Devonport (Mr. Jamieson) and for Portsmouth, North (Mr. Rapson). Will my hon. Friend try to devise a method of compensating, in particular, those who are suffering from the most disabling asbestos-related conditions?
    Mr. Spellar: I recognise the difficulties and distress suffered by those who have contracted this awful disease, but my hon. Friend must accept that there are complicated interlocking relationships between the war pension, the war widow's pension and compensation arrangements—and, indeed, between asbestos-related and other diseases. The Ministry of Defence is considering those matters, but there are no easy answers.
    I understand that my hon. Friend discussed the issue with the last Minister for the Armed Forces, and that my hon. Friend the current Minister will meet him soon to try to unravel some of the problems.

    Recruitment (Ethnic Minorities)
    Dr. Brian Iddon: What are the latest figures for recruitment to the armed forces from Britain's ethnic minorities. [55887]
    The Minister for the Armed Forces (Mr. Doug Henderson): Between 1 April 1998 and 31 August 1998,
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    the latest date for which figures are available, 147 armed forces recruits came from the ethnic minorities, representing 1.7 per cent. of the total intake. The latest figures for MOD civilians show that, between 1 April 1997 and 31 March 1998, 117 recruits identified themselves as being of ethnic minority background, representing 1.4 per cent. of the total intake.
    Dr. Iddon: My constituency has an unemployment rate of 7.5 per cent., higher than the Bolton, the north-west or the national average. We also have a large Asian community, but I have yet to meet a member of that community who has joined the armed forces. Has my hon. Friend conducted any detailed and serious research to find out why members of the Asian community are not joining the armed forces? Is the reason cultural, a fear of discrimination, or what?
    Mr. Henderson: My hon. Friend is right to raise the importance of armed forces recruitment in areas where there is high unemployment among black and Asian people. Both black and Asian people have the opportunity of a first-choice career in the armed forces. A number of studies have been carried out to establish why both black and Asian people are reluctant to join the forces, and those studies are continuing. We have tried to make changes where possible, and to convey to members of the black and Asian communities that they can have a good career and a good education. We have also given them a guarantee that all possible action will be taken to outlaw discrimination and racism.
    Mr. Julian Brazier: Is the Minister aware that the only substantial adult organisation that attracts a large number of people from ethnic minorities into uniform is the Territorial Army? In many territorial units, recruitment from ethnic minorities amounts to 15 or 20 per cent. Indeed, there is an officer from an ethnic minority in the 5th Battalion of my local regiment, the Princess of Wales Royal Regiment. May I suggest to the Minister that, if he wishes the Army as a whole to be closer to the community, hitting its part-time community element in the way that the Government plan will ruin his best intentions?
    Mr. Henderson: The hon. Gentleman is absolutely right. The Territorial Army makes a valuable contribution in attracting both black and Asian people into the armed forces at all ranks. It is a factor that I have taken into account in the review and an important factor in the footprint. I think that, when the decision is announced to the House in due course, the hon. Gentleman will find that it has been a main determining factor.

    Demining
    Mr. John Smith: What steps his Department is taking to encourage humanitarian demining. [55888]
    The Secretary of State for Defence (Mr. George Robertson): Following my announcement a year ago, good progress has been made in increasing the assistance that the Ministry of Defence provides to humanitarian demining, notably through the establishment of a mine information and training centre at Minley and through the gifting of surplus military equipment to the Halo trust. To maintain the momentum, my Department recently organised a seminar to consider what more the armed forces might contribute.
    Mr. Smith: I am grateful to my right hon. Friend for that reply. What help is he giving to support United Nations initiatives in this sector? Does he think that there is any scope for developing new demining technologies through the Defence Evaluation and Research Agency?
    Mr. Robertson: My hon. Friend is right to highlight the UN's role in demining. Demining those parts of the world that have become contaminated by these weapons is a serious issue, into which the UN is putting all its efforts. To help it, a senior officer has been loaned by the MOD to the UN to provide specialist demining expertise to its humanitarian mine action programmes. We hope that that will have a major effect on what the UN can do.
    My hon. Friend is also right to point to the way in which technology might be able to deal with some of the problems. DERA has already produced an effective and cheap system to destroy mines without having to use high explosives. The device is called FireAnt and it is hoped to produce it commercially in the near future. I believe that that will make a serious contribution to alleviating one of the most serious legacies of wars.
    Mr. John Bercow: Will the unarmed military observers in Kosovo oversee humanitarian demining operations? If so, are contingency plans in place for their withdrawal in the event of attack? Will the implementation of such plans require a resolution of the UN?
    Mr. Robertson: The verification mission that will go to Kosovo will have no role whatever in supervising or getting involved in humanitarian demining. It will, of course, face a hazard that was put in place by the Belgrade authorities in certain locations in Kosovo: they have put mines there. The verification mission will obviously take judicious care.
    Mr. Martin Bell: Does the Secretary of State agree that the time has come when the ingenuity that has gone into making land mines can apply to their demining? Does he envisage a further special role for the expertise of the Royal Engineers?
    Mr. Robertson: The hon. Gentleman of course has substantial military experience, which brings authority to his remarks on these matters. I have taken the strong view that military expertise in this sector is unequalled and that, if it can be shared in the humanitarian sector, it will do a lot of good in dealing with a problem that mankind increasingly faces. The Royal Engineers have expertise in this sector, which we have already used, but I am ensuring through the mine information and training centre at Minley that we bring together all the components in the
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    British Army to ensure that they contribute. I have found no greater enthusiasm than among the military for dealing with this, the legacy of wars.

    Territorial Army
    Mr. Richard Page: If the final reduced Territorial Army establishment will include civilian support staff and non-regular permanent Staff. [55889]
    The Minister for the Armed Forces (Mr. Doug Henderson): Following the current restructuring exercise, the Territorial Army establishment will be reduced to approximately 40,000. Civilian support staff and non-regular permanent staff will not be included in that figure and their establishments will be considered separately.
    Mr. Page: I thank the Minister for that answer. It is, of course, very sad that the TA is to suffer such a savage attack. As the Chancellor of the Exchequer is back in the borrowing business and as it seems apparent that, if rumours are to be believed, TA units covering the 7th (Volunteer) Battalion the Royal Anglian Regiment in Hertfordshire—at Hertford, Dunstable and Hemel Hempstead—are to be closed, affecting civilian staff as well, will the Minister approach the Chancellor and ask for a little of that borrowing to maintain a TA presence of some sort in Hertfordshire? A county of that size should have a TA presence.
    Mr. Henderson: As I have already said to hon. Members today, we shall be looking at the footprint of the Territorial Army throughout the country, and will consider the hon. Gentleman's points in relation to his area. I cannot say any more than that; he will have to wait until the statement is made. However, I assure him that consideration will be given to the question of civilians and non-regular permanent staff, as I acknowledge that they do important subsidiary and support jobs for the Territorial Army.

    Millennium Compliance
    Mr. David Atkinson: If he will make a statement on the progress on the millennium readiness of computer systems relating to the defence and security of the United Kingdom and its allies. [55891]
    The Secretary of State for Defence (Mr. George Robertson): The Ministry of Defence has a comprehensive programme for addressing the impact on defence capability posed by the potential failure of computer systems over the millennium period and beyond. That includes both rectifying MOD systems and developing contingency plans where necessary.
    Substantial progress has been made on fixing MOD systems. About 35 per cent. of those systems that require rectification have already been corrected and we expect 80 per cent. to be fixed by autumn 1999. In addition, we are working closely with our allies to raise international awareness of the issue.
    Mr. Atkinson: In the light of that comprehensive reply, will the right hon. Gentleman assure the House that

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    Britain and its NATO and Western European Union allies will not be rendered defenceless by the millennium bug, as was originally feared a couple of years ago? Can he guarantee that the millennium bug will cause no problems for defence-related information technologies? If he cannot give that guarantee, will he ensure that contingency plans are put into place, and that they are thoroughly tested in time for the millennium?
    Mr. Robertson: Few Departments are more aware than the MOD of the dangers and problems that might arise with the millennium. Indeed, few countries in Europe have, so far, done as much as Britain to deal with the problems. My Department is spending £200 million addressing the problems for technology that could arise over the year 2000.
    I can give the hon. Gentleman the assurances for which he asked, as we are taking the matter extremely seriously. My right hon. and noble Friend the Minister for Defence Procurement has a specific and long-running interest in the issue and I have made sure that the problem of the year 2000 is on the agenda for every Defence Council meeting.

    Gulf War Syndrome
    Dr. Ian Gibson: What assessment he has made of recent evidence relating to Gulf war syndrome. [55892]
    The Minister for the Armed Forces (Mr. Doug Henderson): We continue to keep new information about Gulf veterans' illnesses under review. It is encouraging that recently published scientific research is making progress on this subject and I look forward to seeing the first results from the epidemiological studies of UK Gulf veterans at around the turn of the year.
    Dr. Gibson: Is not the evidence a long time coming? We have been raising the issue in the House for more than a year. Does not the evidence point towards one common biochemical activation of molecules, which is induced by different chemicals either singly or together? Might that not have different clinical outcomes in individuals? Has not the time come to pay up and to prevent other people from being subjected to those dangerous chemicals?
    Mr. Henderson: I thank my hon. Friend for that question, which deals with an important issue. We owe a heavy debt to those who served in the Gulf on our behalf. There are a number of interesting developments in research and I anticipate that three pieces of British research will be published in the coming months. There are also interesting pieces of research in the United States, in particular from the Centre for Disease Control and Prevention, in Atlanta, which continues to cover new ground. It believes that it is close to defining what sort of illnesses are being suffered by those who served in the Gulf. I look forward to being able to assess the various pieces of research when they are available to me, around the turn of the year. It is essential that, where there is illness, we try to identify the causes and how to remove them, as well as dealing with other important questions.

    Defence Establishments (Shoeburyness)
    Sir Teddy Taylor: If he will make a statement on the future of the defence establishments at Shoeburyness. [55893]
    The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): The Horseshoe barracks, old ranges and Gunners park at Shoeburyness have been declared surplus to Ministry of Defence requirements and are being prepared for disposal. A draft planning brief has been agreed with the borough council and has been issued for public consultation. The MOD still has a requirement for the new ranges at Shoeburyness, and the Defence Evaluation and Research Agency is seeking to enter into partnership with industry to operate those facilities. It is hoped that such a partnership will create new employment opportunities at Shoeburyness through increased exploitation of the site for non-defence purposes.
    Sir Teddy Taylor: As DERA's rather surprising decision—supported by the Government—to change its policy on the new ranges will lead to an unemployment increase in an area that already has a high unemployment rate, will the Minister assure the House that the Department will work closely with Southend borough council to ensure that the land that becomes available will be used for attracting useful job opportunities to the area?
    Mr. Spellar: I can certainly give the hon. Gentleman that assurance. The borough council is keen to obtain local views on the matter and will review the draft planning brief in the light of any comments received. We are working in co-operation with the council, and will be working closely with it precisely because we want the site to be returned to useful economic use and to offer employment possibilities.

    Royal Hospital, Haslar
    Mr. Peter Viggers: If he will make a statement on the future of the Royal hospital, Haslar. [55895]
    The Minister for the Armed Forces (Mr. Doug Henderson): The future of the Royal hospital, Haslar is still under review. We shall make an announcement when final decisions have been made.
    Mr. Viggers: Is the Minister aware that it is not only my constituents who are aghast at the threat hanging over Haslar? Many hon. Members from both sides of the House, members and former members of the Defence Committee and service personnel are horrified that the Government cannot confirm that Haslar's role will be continued. Does he realise that we must have a centre of excellence in the defence medical services, and that even Government publications have said that uncertainty would be the worst of all options? Will he confirm Haslar's role soon?
    Mr. Henderson: I hope to be able to confirm Haslar's role soon. However, as the hon. Gentleman is aware from our previous correspondence, a major gap in medical provision in the armed forces was identified during the previous Government's period in office. We have been

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    trying to put that gap right, so that we can guarantee that we have the back-up support necessary when our forces go into battle. We have to have the right number of consultants, nurses and ancillary staff based in centres of excellence—to which staff are attracted, and at which they receive the right training and provide essential services. I have an implementation team examining the matter, on which I hope to be able to make an announcement soon.
    Laura Moffatt: Is it not important that we get the issue absolutely right? The defence medical services suffered an enormous blow under the previous Government. Although there are great difficulties at Haslar, and there will be much discomfort until the issue is settled, is it not crucial that, this time, we get it right?
    Mr. Henderson: I agree with my hon. Friend, who clearly makes her point that the problem has existed for a long time. I am not saying that the previous Government did not attempt to address the issue. However, they were unsuccessful in making long-lasting proposals to meet the well-identified shortcomings. It is crucial that, this time, we get it right, which is why I have asked an implementation team to examine the options.
    Mr. Edward Garnier: As other hon. Members have said, the problem with the Royal hospital, Haslar exemplifies the difficulties generally with the defence medical services, and specifically with Territorial and reserve medical forces. What will the Government do about preserving the strength of the Territorial defence medical services?
    Mr. Henderson: Again, the hon. and learned Gentleman raises an important issue. Shortcomings in our medical provision were identified under the previous Government, one of the main areas being the Territorial Army. By any estimate, the TA is thousands short in the necessary provision. One of the central features and guiding principles of our review of the TA is that we should try to put that right. The hon. and learned Gentleman makes a key point, and he will find that, when a statement is made to the House, it will have been well taken into account in our proposals.

    United Nations (Peace Support Operations)
    Mr. Barry Jones: What steps the Government are taking to improve the United Kingdom's ability to contribute to the United Nations peace support operations in the future. [55897]
    The Secretary of State for Defence (Mr. George Robertson): I announced, as part of the strategic defence review, our intention to sign an agreement with the UN that will boost our military support for its operations in future. The new memorandum of understanding, which will be signed by March next year, will revise and update our existing declaration under the UN standby forces arrangements. It will include those capabilities that we have strengthened as a result of the SDR and that are most relevant to UN needs: more and better-equipped rapid reaction forces, additional strategic lift and improved logistics support.
    Mr. Jones: In thanking my right hon. Friend for his comprehensive reply, may I acknowledge the
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    distinguished contribution that he and his Department make in support of the UN in that important sphere? In his efforts to have even better military support, has it crossed his mind that he would have a better force at his disposal if he had some 40 to 50 of the Airbus future large aircraft at his command? May I urge him to consider that and tell him that, if he did, my constituents would help build that aircraft?
    Mr. Robertson: As ever, I admire my hon. Friend's ingenious way of promoting the interests of his constituents, which he always does with enthusiasm, dedication and complete justification. As it strengthens the future additional strategic lift capability of the Royal Air Force, the future large aircraft project is very much in our sights for long-term supply. It will become increasingly important in terms of our commitment to the UN, because it is clear that, yet again, Saddam Hussein is intent on engineering another confrontation with the UN. Force was an option in February this year and brought a climb-down by Saddam. Force must again be an option on this occasion because, regrettably, it seems to be the only thing that Saddam understands. He still represents a threat, not only to his neighbours and to the region but to international stability. The international community must stand united and firm in making sure that he complies with yesterday's unanimous view of the UN Security Council.
    Miss Anne McIntosh: Will the right hon. Gentleman join me in recognising the role played by the Territorial Army and other reserve forces in peacekeeping operations in, for example, Bosnia, and in congratulating them on that role? Will he confirm that, with the cuts envisaged in the SDR, this country will be able to meet its commitments in respect of the TA and other reserves in future operations?
    Mr. Robertson: I believe that we shall be able to meet those commitments much more efficiently. I visited our troops, including the TA reserves, in theatre in Bosnia last week. I was enormously impressed by their bravery, skill and dedication in rebuilding that country. The whole purpose of the restructuring and updating of the TA is to make sure that the TA can play an even bigger and better part in the sort of operation that it has carried out so well in Bosnia.

    Archer Communications Project
    Mr. Mike Gapes: If he will make a statement on the future of the Archer project. [55898]
    The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): I am pleased to announce that we have now signed a contract worth £185 million with the Bowman prime contractor, Archer Communications Systems Ltd., for the next stage of the Bowman programme. This will cover further risk reduction work, the completion of system definition, initial system integration and initial conversion planning. Subject to satisfactory progress by Archer, it is intended to place a production contract in late 1999. This marks a major commitment by the Ministry of Defence to Archer and to the delivery of the Bowman system.
    Mr. Gapes: I thank my hon. Friend for that reply. Will he consider the remarks that I made in the debate on the

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    strategic defence review last week about the award of the local area sub-system contract to Thomson rather than to British Aerospace? That has caused some unhappiness in my constituency, where we have excellent facilities and where people are willing to play a full part in the future of the Archer programme as it develops. I hope that the Government will support the future development of the facility in Ilford.
    Mr. Spellar: I congratulate my hon. Friend on his assiduous lobbying on behalf of the plant in Ilford and his constituents. British Aerospace and Racal are not only the prime contractors, but were involved in the local area sub-system competition. Therefore, it is fair to say that they would have made a proper evaluation on technical grounds and in terms of value for money. The excellent manufacturing facility in my hon. Friend's constituency is well recognised not only by us, but by the manufacturers.

  The President of the Council was asked—
  PRESIDENT OF THE COUNCIL

    Recess Dates
    Mr. Mike Gapes: What plans she has to ensure that recesses in the autumn and spring coincide with school half-term holidays. [55913]
    The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): The Government proposed to the Modernisation Committee that we should attempt to arrange business to allow constituency weeks to coincide with school half-term in February and October.
    Mr. Gapes: I thank my right hon. Friend for that reply. Did she see the large number of children, including my own, who were in the House for part of last week because the House came back on 19 October and half-term was the week after? I am sure that many right hon. and hon. Members on both sides of the House would be grateful for better long-term arrangements that might allow us to spend time with our children instead of parading them around the Tea Room and other places in the building.
    Mrs. Beckett: I am grateful to my hon. Friend for making it clear in the latter part of his remarks that he did not consider that a good idea, as I was not quite sure at the beginning. We are taking all issues into account and certainly will bear in mind concerns such as those he expressed. However, he will recognise that, although the Government have made a proposal to the Modernisation Committee, as yet, the Committee has neither agreed nor reported the matter to the House.
    Sir Patrick Cormack: I sympathise with the right hon. Lady's general point of view, but is not the most important thing about the parliamentary programme that it should give right hon. and hon. Members a proper opportunity to hold the Executive to account and to scrutinise the business placed before the House? Although we would welcome a more
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    structured parliamentary year, we would not agree to anything that inhibited the rights of hon. Members on either of those fronts.
    Mrs. Beckett: I agree entirely with the hon. Gentleman that it is the purpose of the House to hold the Government to account and scrutinise parliamentary business properly. It is an error that some of the suggestions that have been made for improving the way in which we handle business in the House are sometimes described in other terms. The underlying motive of those who seek, in some cases to preserve and in other cases to change and modernise our procedures, is to preserve scrutiny. Some might argue that, much as they enjoy spending time with their children, attempting to do so and at the same time to hold the Government to account may not be easy.

    National Parliament Office, Brussels
    Miss Anne McIntosh: What plans there are to implement the recommendation of the Select Committee on the Modernisation of the House of Commons to establish a National Parliament Office in Brussels. [55916]
    Mrs. Beckett: The hon. Lady rightly draws attention to the recommendation of the Modernisation Committee. I understand that some work is being done by the House authorities on the implications and the practical problems associated with it, which no doubt will be reported to the House in due course.
    Miss McIntosh: I am grateful to the right hon. Lady for that answer. Given the greater powers afforded the European Parliament by the Amsterdam treaty and the desire of the House—and, I believe, the Government—for greater co-operation, mutual understanding and partnership between the House and the European Parliament, does the right hon. Lady agree that such an office should be set up as a matter of urgency to train our very able officers in the House to prepare for when the Amsterdam treaty comes into force?
    Mrs. Beckett: It is important that we should do everything that we can to improve the liaison between the European Parliament and this Parliament. In particular, we should use whatever channels we can to get advance information for hon. Members so that we can be well aware of what is being proposed, the full implications for the House and how we should respond. The proposed National Parliament Office would be one means to achieve that, but it is not the only proposal.

    Summer Recess
    Mr. Chris Mullin: What plans she has for reviewing the length of the summer recess; and if she will make a statement. [55917]
    Mrs. Beckett: The length of the summer recess is one of the issues that the Modernisation Committee can consider in its inquiry into the parliamentary calendar. As the House knows, the length of the summer recess is affected by several external factors and I do not envisage any change in the immediate future.
    Mr. Mullin: Does my right hon. Friend agree that it is not healthy in a democracy for the Government to enjoy a holiday from scrutiny that amounts to the best part of three months every summer? A possible solution, which may also meet the concerns of those who want us not to sit during half terms, would be for us to sit for a couple of weeks in early September and then not sit during half terms.
    Mrs. Beckett: I am aware of my hon. Friend's views. I understand his anxiety to ensure that the House properly holds the Executive to account. However, as anyone who has ever considered changing such arrangements has discovered, there are eminently sound and practical reasons for the shape of the parliamentary term as it has emerged. Changes frequently cause substantial inconvenience not only to Members of Parliament and their ability to hold the Executive to account, but to other organisations, such as political parties that hold party conferences.

    Prime Minister's Questions
    Mr. David Amess: What recent representations she has received on the arrangements for Prime Minister's questions. [55918]
    Mrs. Beckett: I have received occasional letters about the content of Prime Minister's questions, but no recent proposals to alter the arrangements.
    Mr. Amess: Now that we have 18 months' experience of the new-style Prime Minister's Question Time, will the right hon. Lady consider reverting to the original arrangements? Is she aware that many hon. Members feel that the weekly visitation means that the Executive are no longer being properly scrutinised? There is also some frustration that, although the Opposition keep asking questions, they receive no answers.
    Mrs. Beckett: I am afraid that those who believe that a return to the previous system would be better are allowing their prejudices to triumph over an examination of the facts. Since my right hon. Friend the Prime Minister got rid of the preamble, there is far more—probably almost twice as much—substance in the answers than there was before. My right hon. Friend has missed only one Prime Minister's Question Time since May 1997—when the Belfast agreement was being negotiated. He has also made more statements to the House than his predecessor over a comparable period. Those who are insinuating that the Prime Minister comes to the House less often or is less accountable have not studied the facts.
    Mr. Gerald Bermingham: Perhaps my right hon. Friend will consider the number of questions asked by the Leader of the Opposition. His six in succession tend to be repetitive and miss the point. If we want a sharp, clear exchange of views, perhaps short, sharp questions, limited in number, are the solution.
    Mrs. Beckett: I certainly would not venture to give advice to the Leader of the Opposition on how he should conduct himself. I know from experience that that post requires considerable skill.

    Standing Committee for the English Regions
    Mr. Austin Mitchell: What plans she has to set up a Standing Committee for the English regions. [55920]
    Mrs. Beckett: The Standing Orders already provide for a Standing Committee on Regional Affairs, although it has not met for many years. I am considering whether the Committee might serve a useful purpose in future and how it might be convened.
    Mr. Mitchell: I am delighted to hear that. With the establishment of regional development agencies and the possibility of regional devolution, we are clearly moving in a regional direction. It would be useful if each English region—particularly Yorkshire and Humberside, which is the best of them and has a population equal to that of Scotland and problems that are, in many respects, more severe than those of Scotland—should have its own Committee to study its problems.
    Mrs. Beckett: I am well aware of the strong regional loyalties in the House. As I say, I am considering whether changes can be made to improve the scrutiny of business. As we all agree, that is what we are here for.
    Mr. Michael Fabricant: If such a Standing Committee were established, would its locus be to find out how regional governments can possibly be paid for without demanding extra from the taxpayer, as has been claimed? Does the right hon. Lady agree that people do not want regional governments in England? Would that not cost the taxpayer money? Is it not another example of jobs for the boys?
    Mrs. Beckett: As no one has the smallest intention of forcing regional government on anybody, the hon. Gentleman's remarks are interesting but not precisely relevant.

    Modernisation
    Gillian Merron: If she will make a statement about progress in modernising the work of the House. [55921]
    Mrs. Beckett: Better information for Members of Parliament is being provided through improving the content of the Order Paper, normally giving advance notice of business two weeks ahead, and publishing, from the start of next Session, the new-style explanatory notes

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    for Bills. On Wednesday, the Social Security Committee reported on pre-legislative scrutiny of the first Bill published in draft, on pension sharing on divorce. The House has approved a report on conduct in the Chamber, to dispense with some of our outdated practices. The parliamentary calendar is being considered by the Modernisation Committee. The report on improving European Union scrutiny procedures will be debated soon.
    Gillian Merron: I thank my right hon. Friend for her answer. Given the Government's commitment to
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    family-friendly policies, will she give the House some idea of development in that area, other than the very welcome reference to half-term holidays?
    Mrs. Beckett: The balance that the House is striving to achieve between better and more productive scrutiny of Parliament's business while wishing, of course, to do as we encourage others to do and to promote family-friendly policies, is one with which the Modernisation Committee is, struggling almost even as we speak.

International Financial System
3.31 pm
The Chancellor of the Exchequer (Mr. Gordon Brown): With permission, I should like to report to the House at the earliest available opportunity the terms of a new agreement reached on Friday by Finance Ministers and central bank governors of the Group of Seven countries to reform and strengthen the international financial system. A full copy of that and a statement by the Heads of Government, setting out the agenda for further action, is available in the Vote Office.
Tomorrow, I shall present to the House the pre-Budget report, with its detail on the domestic economy. However, the financial crisis that swept Asia last year and reverberated around the world has revealed long-standing weaknesses in the international financial system, which G7 Ministers agree must be addressed as a matter of urgency.
Our predecessors had to meet the challenge of ensuring economic stability in an era of national economies. Our generation must meet the challenges of ensuring stability in the era of a global economy, in which each economy can directly affect the prospects of every other. The new way forward is sensible global financial regulation, credible crisis prevention, orderly mechanisms for crisis resolution and a sure foundation in minimum standards and best practices that all countries adopt to participate in the international financial system.
That is directly relevant to the United Kingdom economy. It is everybody's business, not only because we are dependent on trade in goods and services with other countries—the Asian crisis, for example, cut in one single year UK exports to Indonesia, Malaysia, South Korea, Thailand and the Philippines by more than 50 per cent.—but because, in countries such as ours, as we have seen, a weak financial system or inappropriate economic policies in one country put at risk another country's financial system and threaten people's savings or investments, and eventually, their companies or jobs. That is why it is in everyone's interest to support a new mechanism for crisis prevention and resolution, a new transparency in the global financial order and a new process of financial regulation.
The G7 Ministers' statement reaffirms that the balance of risks in the world economy has shifted from concerns about inflation to concerns about growth. In the last month, interest rate policy has been adjusted in Japan, the United States, Canada, the United Kingdom, Spain, Portugal, Ireland, Denmark, Italy and again in the United States. The G7 statement issued on Friday reaffirms our commitment to create or sustain the conditions for strong domestic-demand-led growth and financial stability in each of our economies. The authorities will continue to be vigilant in the light of the shift in the balance of risks on a global basis.
In our statement, each continent has agreed to make a contribution to creating the conditions for stability and growth—Japan with banking reform, Europe with structural reforms to tackle unemployment, and America by promoting growth with low inflation. In the case of Latin America, we welcome the policy commitments that the Brazilian Government have made, and we will work with the international community to support them. All of us must act to avoid a retreat into protectionism.
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As well as measures to deal with short-term instabilities, we need action to reform the financial architecture. For 50 years, our policies for regulation, supervision, transparency and stability have been devised and developed for a world of relatively sheltered national economies with limited capital markets. Now that markets transcend national boundaries, we must create for global markets systems for supervision, transparency, regulation and stability that are as sophisticated as the markets with which they have to cope.
G7 Governments have therefore concluded that the international architecture devised in the 1940s for the economies of the 1940s is no longer adequate for the challenges of the 1990s, and that we need new rules for the global financial system. In the statement, each G7 country has now agreed to adopt and apply codes of conduct founded on minimum standards and best practice. These are new disciplines and undertakings that each country is prepared to accept as a condition of its participation in the international system.
In monetary and financial policy, we are agreed on the need for greater openness, and that each country should specify its objectives for monetary policy. We are agreed that each country should identify responsibility for achieving those objectives, and for reporting and explaining monetary and financial policy decisions. We are agreed that these standards should be set down in an internationally agreed code of conduct that all countries are prepared to accept.
We have committed ourselves to complying with the code of conduct of good practice on fiscal transparency that has been drawn up by the International Monetary Fund. Similar standards of transparency are required in the private sector. By spring next year, the Organisation for Economic Co-operation and Development will complete work on a code of principles on sound corporate governance and structure. By early 1999, we will also have in place a plan for internationally agreed accounting standards.
Those codes of conduct in monetary policy, fiscal policy and corporate governance will mean radical changes in the way in which financial markets function. They will help to produce an environment in which financial markets can operate better. They should reduce the risk of future failures and mean that, when failures do occur, the financial system is robust enough to withstand them. By improving public understanding of why and how decisions are made—and by making sure that the right long-term policies are in place—the codes will help to build public understanding and support for the policies that are necessary to deliver economic growth and prosperity.
Proper implementation of the codes of conduct should be a condition of IMF and World bank support. Immediate action to promote transparency in these areas should be key components in any reform programme which the IMF and World bank agree in coming months. The IMF and the World bank must themselves be more open and accountable, with a presumption in favour of releasing information and external audit of their performance.
We have agreed that there should be new undertakings on social policy, too. The G7 statement underlines the importance of policies that protect the most vulnerable—the real victims of financial crises, whose pain is very real

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indeed. That is why the G7 Governments have agreed that there should be general principles for good practice in social policy. These should serve as a guide to best practice by individual countries, and there must be, as a matter of immediacy, a new World bank emergency facility to provide additional funding on special terms to the most vulnerable groups in society.
On global financial regulation, the G7 Governments have now agreed to support the establishment of a process for strengthened financial sector surveillance, using national and international regulatory and supervisory expertise. That will be used in the IMF's regular surveillance of individual member countries.
We will bring together the key international institutions and those national regulatory authorities that are involved in financial sector stability to co-operate and co-ordinate their activities in the management and development of policies to foster stability and reduce systemic risk. They will be able to exchange information more systematically on risk in the international financial system.
Dr. Tietmeyer, the president of the Bundesbank, has agreed to consult the relevant international bodies on the reforms. I want an international memorandum of understanding to establish a proper division of responsibility between regulators and international authorities.
In the G7 statement, we also commit ourselves to strengthening the regulatory focus on risk management systems and prudential standards in financial sector institutions, and, in particular, to examining the implications of the operations of leveraged international financial organisations, including hedge funds.
A fundamental problem has been a lack of transparency and poor standards of disclosure by some financial market participants. The Basle committee on banking standards will look at that important issue when it considers an international standard of best practice for transparency and disclosure. An agreed international standard of best practice would act as a benchmark both for financial institutions and for their regulators.
The United Kingdom is clear that financial institutions that deal with hedge funds must take into account all proper prudential standards and requirements of disclosure—proper due diligence procedures are essential. We also believe that, as part of the review of capital adequacy rules, the Basle committee needs to examine the appropriate treatment of banks' exposures to hedge funds to ensure proper recognition of the risks.
As Howard Davies, the chairman of the Financial Services Authority, has emphasised, managements of financial institutions have a responsibility to ensure that circumstances never arise in which personal relationships with potential counterparts could get in the way of appropriate due diligence. He said that there must be complete transparency in senior management's personal investments in counterpart firms to avoid any suspicion of conflicts of interest. I fully endorse those remarks.
In their statement, the G7 Heads of Government said that they would examine not only the operation of highly leveraged operations of offshore institutions but how they can encourage offshore centres to comply with internationally agreed standards. That is of particular
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importance for the United Kingdom, because Long-Term Capital Management was registered in the Cayman Islands.
The Government are committed to improving standards of regulation and regulatory co-operation in our overseas territories and to implementing the European, G7 and other OECD initiatives to tackle unfair tax competition. We will not allow high-risk hedge fund speculation by a few to translate into wider risks for the many, and destabilise the financial system on which we all depend for prosperity.
Through international examination of transparency in hedge funds, proper due diligence procedures, potential conflicts of interest and dissemination of standards to offshore centres, Governments can play their part in minimising the implications of future sudden and systemic disturbances.
G7 Ministers are agreed on the need for a new procedure for crisis prevention and tackling contagion. The central element is an enhanced IMF reserve facility, which would provide a contingent short-term line of credit for countries pursuing strong IMF-approved policies. That facility could be drawn on in times of need, and would entail appropriate interest rates along with shorter maturities. It could be complemented, in individual cases, by bilateral contingent financing, and it would be accompanied by appropriate private sector involvement.
The G7 countries have also agreed on the need for a better long-term mechanism for international authorities to work with the private sector and national authorities in handling debt rescheduling at times of potential crisis. We are asking the private sector to adopt collective action clauses to facilitate more orderly work-out arrangements, and we will consider the use of such clauses in our own sovereign and quasi-sovereign bond issues.
We are asking the World bank, in co-operation with the IMF, to work to put in place effective insolvency and debtor-creditor regimes and, we are asking the IMF to consider lending into arrears, under carefully designed conditions and on a case-by-case basis. We want the private sector to build on its experience with some emerging market countries in developing new, market-based contingent financing mechanisms. We will now support the more active use of loan guarantees to encourage greater private-sector involvement in emerging market financing.
Following the welcome United States Congress decision, we call for the IMF quota increase and the new arrangements to borrow to be implemented as soon as possible. Together, they will provide additional IMF resources of $90 billion to ensure the stability of the international financial system.
Globalisation has happened. We must now make it work in hard times as well as good. As we have shown, we need not new institutions, but new rules and disciplines. I want to thank other G7 Ministers and central bank governors, and Heads of Government who have backed this work all along, for working through this new agreement.
Taken together, the reforms that we have agreed—global financial regulation, new codes of conduct for transparency and mechanisms for crisis prevention and crisis resolution, backed up by the resources that those need—represent the first steps and now set the agenda for what will become the most radical restructuring of the

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international financial architecture since its creation in the 1940s, making us better equipped to tackle the challenges of the 1990s and the century ahead. I commend this detailed statement to the House.
Mr. Francis Maude: That statement was less about the global financial architecture than about distracting attention from Britain's looming downturn and the Chancellor's four basic blunders, which created it. Not once did he admit that there is a problem, and not once did he admit his responsibility for it. The House will have thought it surprising that, although the Chancellor announced this morning to the Confederation of British Industry a date for proposed British membership of the euro and the establishment of a parliamentary body to prepare for it, he has not found time to announce it to the House.
In view of the concern that the Chancellor expressed in the agreement about the performance of domestic financial regulators, will he give an absolutely clear undertaking that the financial services Bill that would create Britain's financial regulator will be in the Queen's Speech, or confirm that the legislation is in such a mess that he is not in a position to include it?
How does the Chancellor square the greater openness and disclosure about which we have heard much—including the repeated use of the word "transparency", in the belief that constant repetition makes it true—with the impenetrable thicket of changed definitions and fiddled statistics with which he has surrounded our public finances? The central point that the Chancellor failed to address was that the IMF was set up to encourage national Governments to pursue sensible economic policies. His predecessors in the previous Labour Government know that only too well.
Today's economic downturn in different parts of the world is primarily due to different domestic policy blunders in each country. Will the right hon. Gentleman tell the House how British businesses are supposed to cope with £40 billion of extra taxation and regulation? Is he merely going to say that they all have to sharpen up their act, while he lectures the world about their deficiencies?
Gavyn Davies of Goldman Sachs has said:
"the UK is teetering on the brink of recession".
Will the Chancellor tell the House what he is doing to avoid such a recession? Has he not read the surveys that put Britain at the bottom of the European growth league for next year? Is he aware that the poll of forecasts published by The Economist shows British growth of less than 1 per cent. next year, while even Australia, which is heavily dependent on Asia for its trade and prosperity, is set to grow by 2.2 per cent?
When will the Chancellor stop lecturing others, and tell us what he intends to do here in Britain to prevent our sliding into a recession that will have been made in Downing street?
Mr. Brown: I knew that the Conservative party wants to opt out of Europe; it now seems to want to opt out of the whole world. When we have an agreement that has been signed by Governments of right and left throughout the world; when the central banks in America, Europe and Japan recognise the need for action; when growth in world trade is set to fall by two thirds this year, from 11 per
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cent. last year to the 4 per cent. forecast for this year; and when 25 per cent. of the world is in recession, it ill befits the Conservative party to fail to examine the need for fundamental reforms in the international financial system.
We supported the previous Government when they considered heavily indebted poor countries and international debt and when they went to Lyons to sign an agreement tackling unemployment. I believe that, on reflection, Conservative Members will think that all-party support for an agreement signed by everyone from Alan Greenspan and President Chirac to the Prime Minister of Japan and the new President of Germany would be a more sensible approach.
Let me deal with the right hon. Gentleman's individual points, such as they were. He says that constant repetition of "transparency" will bring no answers in itself. That is precisely why all countries have now agreed to follow a code of transparency. It would have been far better if the previous Conservative Government had taken the action that might have avoided some of the crises in the first place.
Yes, it is true that the International Monetary Fund was set up primarily to deal with balance of payments crises affecting individual national Governments, because of the risk that they would spill over into other national economies; but the world has changed since 1945, and we are dealing with global financial markets that need supervision and transparency not only nationally but globally. It is hardly surprising that central bank governors and international regulators are prepared, despite the shadow Chancellor's advice, to meet and consider big reforms in the international financial system.
When the shadow Chancellor sees the result of the work being done by the Basle committee, the International Monetary Fund and the World bank to reach agreement on a new mechanism for financial regulation that can spot problems before they arise in individual economies; deal with some of the current gaps in the regulatory system; and spot some of the difficulties that arise from the international operation of hedge funds, he will think twice about pouring cold water on a very sensible idea.
The crisis resolution system—the special facility of the IMF—was an idea originally proposed by America as a temporary facility to deal with crises arising from current events, and the House agreed the funding of the IMF behind it last July, so it ill befits the Conservative party to oppose a measure that is of good use to the international system.
When Japan has to nationalise many of its banks; when the public sector is buying shares in private companies in Hong Kong; and when the United States has had to mount a rescue operation for a hedge fund that was exposed to $1.3 trillion, it ill befits the Conservative party not to take seriously the problems of our international system. I hope that, on reflection, it will think again.
Mr. Robert Sheldon: Is my right hon. Friend aware that his role in getting the G7 to provide the £90 billion has been widely applauded? Will he say something about the problems of contagion of perfectly respectable economies from some of those in crisis, and in particular about some of the hedge funds? We are dealing with very large sums, and at times of

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variability in the markets concerned, it is difficult to control them. What plans does he have, or might he think of having, to monitor such funds?
Mr. Brown: I am grateful to my right hon. Friend, and I agree with him that the issues are complex and detailed. The Conservative party should face up to that when it examines the issues.
The crisis prevention facility—the supplemental reserve facility, which has been set up by the IMF—is designed so that countries pursuing sound economic policies are not brought down by international events beyond their control. The emergency facility and the resources behind it should be accompanied by bilateral help from individual countries willing to contribute and a serious contribution from the private sector, which should now play its part—on this as on other issues—in helping to resolve some of the crises that arise from the operation of the financial markets.
On hedge funds, I assure my right hon. Friend that the measures that I have outlined this afternoon—including a code of standards, the examination of dependent territories and rules of capital adequacy—are being pursued urgently. The Financial Services Authority is taking a great interest in the issue, as is the Basle committee, which brings together all the banks, and I am confident that, although it is difficult to deal with the problems caused by the operation of hedge funds, those who invest in them will be prepared to follow codes of conduct requiring higher standards of transparency and disclosure.
Mr. Malcolm Bruce: I welcome the Chancellor's statement and his recent work on trying to tackle global market turbulence. Does he agree that we in the United Kingdom have a responsibility to address our domestic problems as part of the solution, including getting down our overvalued pound and exchange rates? He mentioned the monetary and fiscal codes included in the G7 agreement, but will he consider the connection between the two? In his Budget statement, will he undertake to avoid any fiscal easing, to make it possible for the Bank of England to bring down interest rates in accordance with the approach that he advocated on his summer tour of world capitals?
We all wish to see greater stability in the exchange rate. I welcome the Government's proposal for a parliamentary committee to prepare for the single currency, and, whatever difficulties the official Opposition have with the issue, we will be happy to co-operate. However, does the Chancellor accept that serious private sector preparation for the single currency will not happen unless there is evidence of serious public sector commitment to joining it? The two must go together.
The Chancellor pointed out the fall in exports to Asian markets, but does he accept that we trade more with the Netherlands than with the whole of Asia, Russia and South America combined? In those circumstances, he cannot blame our current problems on difficulties in those regions, and he must pursue an action plan at home to bring down our uncompetitive exchange rate and high interest rates.
Mr. Brown: I am grateful to the hon. Gentleman for being more generous than the shadow Chancellor in
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recognising that international issues must be addressed. The Conservative party seems to want to fail to recognise that. I will address the exchange rate issues again tomorrow, but I remind the hon. Gentleman that the exchange rate is now 10 per cent. below its peak. It was DM3.10 at one point, and is now below DM2.80. The dollar exchange rate has barely changed in the past three years.
It was announced some time ago that the Government were preparing a draft national changeover plan for the single currency. The Conservative party is, of course, free to use one of its Opposition days to debate its new policy on the European Union, and I would enjoy that very much.
Individual national economies have been severely affected by what has happened around the world for two reasons. First, although trade with Asia is smaller than trade with other continents, trade as a whole, which was growing by 11 per cent., is now growing by 4 per cent. Secondly, $3 trillion has been wiped off stock exchanges around the world, which is the equivalent of 10 per cent. of world GDP. That is unlikely not to have an effect on confidence in individual countries and people's ability to make decisions about investment.
I hope that the hon. Gentleman will come to understand that the combination of the downturn in world trade—arising initially from what happened in Asia, but affecting Russia and eastern Europe and Latin America, and now affecting some decisions being made in the United States—and what is happening on the stock exchanges, has had a powerful effect on the world economy and on confidence. I want us to steer a course of stability, but we must ensure that the world economy is also in a position to steer such a course. That is why we need major international financial reforms. I hope that, when the Conservative party grows up, it will welcome them.
Mr. Stuart Bell: Does the Chancellor agree that the British Government, and our friends in the G7 countries, are acting so that nation states can come to terms with their own economies and seek to deal with the financial contagion of speculation that has spread across the world? Long-Term Capital Management was able to raise $100 billion on $4 billion of capital. At one point, it was $3 trillion in debt. Japanese banks were not regulated properly, according to the Basle agreement. Derivatives trading has stripped the world's economies of good money made by manufacturers. Does my right hon. Friend agree that what he has said today puts the emphasis back on the real economy, on manufacturing, on services, on sales and on exports by getting a grip on the financial economy?
Mr. Brown: I agree that, if a Japanese bank fails or a Korean industrial company is unable to continue its investment, there will be an effect on jobs in the United Kingdom. If a Japanese manufacturer, or even an American or Latin American one, cannot maintain investment, that too affects our ability to invest and to create jobs.
People are coming to recognise that events in individual economies, and the fragility of the banking systems in some developing economies, can have a powerful effect on the world economy. To deal with that is not just in the interests of one country; it is in the interests of all. That is

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why global financial regulation is a central issue. It was not an issue when capital flows were so small in the 1940s, but it is bound to be an issue in the 1990s, and that is why the international financial institutions must be reformed.
Mr. John Townend: I have been in the House for 20 years, and I have never heard a statement from a Chancellor that contained so much waffle and so little detail. Is not the right hon. Gentleman's statement basically a diversionary tactic that will give him an alibi tomorrow when he will announce to the House that our growth rate next year will be way under 1 per cent. while growth rates in France and Germany are way over 2 per cent? Is not that due to the failure of his economic policy of spending too high, taxing too high and imposing too much regulation, which has forced the Bank of England to keep interest rates sky high, and has created a growing depression? The right hon. Gentleman talked of transparency, but there is none in the European Central bank, which he is keen to join. Will he advocate that the bank's minutes be published? How much will his package cost the British taxpayer?
Mr. Brown: I do not know what has happened to the Conservative party. [HON. MEMBERS: "Answer."] Answer? The hon. Gentleman made a statement of prejudice against the world, and he failed to recognise that what happens in Britain is affected by what happens round the world. If he were criticising a statement that I had made without the agreement of our G7 partners and of central bank governors, that would be all very well.
However, I have worked on the statement with the Chairman of the Federal Reserve bank in the United States, Alan Greenspan, the governors of all the central banks in Europe, and the Finance Ministers of those countries. That includes Ministers of right-wing views and left-wing views, all of whom agree that international financial reform is necessary. The only people who do not agree with that, it seems, are in the Conservative party.
Mr. Dale Campbell-Savours: I warmly congratulate my right hon. Friend on his statement, and I pay tribute to the expert, confidence-inspiring way in which he set about it—[Laughter.] Oh yes, people all over the world will wish to thank the British Chancellor of the Exchequer for what he has done.
May I ask about a tax on speculative flows? Is that idea completely ruled out, or might it perhaps be on the agenda at some future point?
Mr. Brown: The key problem of a tax on speculation is how it would be applied, given the numerous financial centres that exist. We think that disclosure is the better answer to some of the problems that have arisen from the effects of speculative activity around the world, when it has become excessive. People must disclose the activities in which they are engaged, there must be proper international bodies that can deal with managing disclosure issues, and there must be proper standards that people have to follow.
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I believe that even the Conservative party will see that that is the proper way forward. It wants to keep laughing, but we are talking about an international crisis that has left scores of millions of people in poverty. I wish that it would recognise what is happening around the world.
Mr. Peter Viggers: Does the Chancellor accept that he has a problem in the growing gap between income and expenditure, and that, at the heart of his statement, despite all the appeals for private sector support, is an announcement that the Government will commit more money to the International Monetary Fund? Will that commitment increase his problem by increasing public expenditure, or will it not count as public expenditure? If it does not, would it not be more honest if it did?
Mr. Brown: In the traditions that have been followed by Governments of both parties, the contributions to the IMF count as coming from foreign exchange reserves. Our IMF quota has been voted by the House. America was the last country that had to make a decision on whether to go ahead with it. There has been a great welcome around the world for the American decision that makes it possible to create the new reserve facility. Under the previous Government, the then Chancellor of the Exchequer, who seems to have become very unpopular on the Conservative Benches, supported these measures. I think that, on reflection, the Conservative party will again support them, but it is a pity that it cannot do so today.
Mr. Tom Clarke: Does the Chancellor accept that, in any other forum in Britain, what he said would have been welcomed unanimously as sheer common sense? His two major points—the vulnerability of developing nations and the problem of debt, and the need for transparency in the IMF and the World bank—are surely self-evident. If people cannot be persuaded of the social and moral grounds that underscore his arguments, cannot we point out that economic interdependence means, for example, that, because of the meltdown in Asia, 1 million fewer Asian tourists are using the services of the British tourism industry than previously? On transparency, can he assure us that, with Oxfam and other non-governmental organisations, he believes that there should be separate representation at both the IMF and the World bank?
Mr. Brown: I am grateful to my right hon. Friend, who has long taken a great interest in development. I agree with what he says about transparency and the effect of what is happening all around the world on European economies. The agreement sets up a new emergency World bank facility that can give additional help to the poorest groups, particularly in Asia. The World bank is investing an extra $17 billion to help deal with social problems in Asia: 2.5 million children in Indonesia are being helped; a special employment programme is being developed in Thailand; in Korea, special adjustment finance is being provided. All those things are necessary to avoid not only unemployment but, in some cases, starvation. I hope that the whole House supports the measures.
Sir Teddy Taylor: One of the key recommendations in the statement is the

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reduction of European Union unemployment, which is now at the horrifying level of about 10 per cent., and more than 20 per cent. in some countries. Will the Chancellor say exactly how that is to be done? In light of the firm assurance by all G7 members that they are totally opposed to protectionism, will he say that the Government will wholly oppose the common agricultural policy, which is the greatest protection racket ever devised by man?
Mr. Brown: As the hon. Gentleman knows, the Government propose to reform the common agricultural policy. Conservative Members should welcome the fact that there is growth in Europe, and that the projections are for higher growth next year than in America, for example. [Interruption.] Conservative Members do not like it when Europe is growing, and they do not like it when Europe is not growing. Europe is set to grow next year. The employment action measures that we propose to adopt in Britain to deal with the structural problems of youth and long-term unemployment are increasingly being adopted in Europe. That will help to bring down unemployment.
Mr. Harry Barnes: In an economic crisis, the weakest go to the wall first. In this case, the weakest are some of the world's poorest nations, which are looking for the removal of their international debt. Will the debt rescheduling measures that my right hon. Friend mentioned—new rules for the IMF and the World bank—begin to tackle that problem?
Mr. Brown: At the recent meetings of the IMF and the World bank in October, the United Kingdom proposed a number of measures that would help to get more countries into the debt reduction process. We are confident that, if action is taken both by them and by the world authorities, all countries can be part of the debt reduction process by the millennium.
We suggested a measure whereby post-conflict countries, particularly in Africa, which face the double burden of debt and an economy destroyed as a result of war, could get special help to ensure that they are part of the debt reduction process as well. I assure my hon. Friend that what the Churches and voluntary organisations throughout the UK and Europe are pressing for—action before the millennium on debt relief that genuinely helps people in difficulty, particularly in Africa—is part of the programme that the UK is pushing.
Mr. Peter Brooke: Before we set another unnecessary hare running, did the Chancellor of the Exchequer intend to agree with the hon. Member for Middlesbrough (Mr. Bell), as he seemed to, that financial services are not a real service industry, even if they require regulation?
Mr. Brown: No, I did not say that, and I do not think that it was the intention of my hon. Friend the Member for Middlesbrough.
Mr. Dennis Skinner: My right hon. Friend should not pay a great deal of attention to the nervous laughter from the Conservative Benches when he was making his statement, because that party was responsible for seeing Johnson Matthey go down the pan to the tune
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of several hundred million pounds; they sat on their hands while the Bank of Credit and Commerce International lost £14 billion; and they did nothing when Barings lost £800 million. They are the Nicky Leesons of the political world. Will my right hon. Friend bear in mind that, although words like "codes of conduct" and "intervention" are well-meaning, if we are to tame the casino economy there must be some binding measures as well?
Mr. Brown: I am grateful to my hon. Friend for pointing out the Conservatives' record. If they do not believe in international financial regulation, it is doubtful whether they believe in national financial regulation. All G7 countries have agreed to follow the codes of conduct and the intervention that we propose, and there is now a timetable for action. At the beginning of next year, agreements on a number of those issues will be put into practice, and any further work will be completed by the next G7 summit. That is a record not only of moving the issue forward as a result of the financial crisis, but of trying to resolve quickly issues which, on reflection, Conservative Members should have resolved long ago, when they were in government.
Miss Anne McIntosh: The Chancellor mentioned the need to reduce unemployment across Europe. Does he agree that those measures should be business led, and that it is not the role of Governments within the European Union to attempt to create jobs? That should be left to the business community.
Mr. Brown: I agree that businesses create jobs and prosperity, and that is exactly what I would say in every discussion I have. However, the hon. Lady must recognise that welfare to work would not have happened without government. The private sector often needs the Government's lead in helping with training and job opportunities for people who have been left out. We now have 140,000 young people in the welfare-to-work programmes under the new deal. I hope that the hon. Lady's remarks mean that she, at least, will welcome that on behalf of the Conservative party.
Mr. Jim Cousins: I welcome my right hon. Friend's statement, because it offers a firm platform for collective action by the new Governments of the left in Europe to promote growth and employment. However, can he assure the House that, in future, IMF packages will secure jobs and employment in the target countries, not simply bail out banks for risks that they should never have taken? Will he also assure us that Britain's offshore tax havens will have a firm regime of disclosure and transparency, of the kind that he wishes to see in the rest of the world?
Mr. Brown: I can say that we are looking at exactly that, in relation to the offshore independent territories.
As for the IMF, it is true that last year's initial programmes relating to countries such as Indonesia have been found not to be appropriate. That is why there must be more openness and more external audit in regard to what the IMF does, and I believe that some of the decisions that we have made will facilitate the process.
Mr. Michael Jack: In the early part of his statement, the Chancellor mentioned a number of actions

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that countries and groups of countries were expected to take in order to comply with the international agreement. Will there be a country-by-country timetable for such action? What sanctions will be imposed on countries that do not comply with that international requirement? Without a timetable and without sanctions, it will be a worthless and toothless agreement.
Mr. Brown: Countries will report what they have done by the time of the next G7 summit. As for sanctions, we propose that, when the IMF produces its national reports on individual countries, it should report on what has happened to, for example, reforms of the financial system. So there will be a timetable for reports, and sanctions in the form of publicity about what has gone wrong.
Mr. Gerald Bermingham: Will the Chancellor keep a wary eye on our national clearing banks and other financial institutions, so that what has happened with hedge funds in the past does not happen again? When the financial institutions caught a cold in connection with third-world debts, the property boom and one or two other speculative enterprises in the 1970s and 1980s, they promptly recouped the money from customers in the United Kingdom, both industrial and private. Perhaps the Chancellor will keep an eye on them, because we would not like a repeat of something that caused so much damage to the personal and industrial economic health of the country.
Mr. Brown: I agree that it is important for our banks to service the needs of businesses in the best way possible, and the Government will keep that under continuous review. As for hedge funds, we intend to implement the initiatives that I have suggested this afternoon. I will report to the House later.
Mr. Michael Fabricant: Does the Chancellor realise that the CBI and the Engineering Employers Federation will not be amused by his refusal to answer questions about the way in which his actions are exacerbating the effects of the decline in the world economy? Will he now answer the question posed by my right hon. Friend the Member for Horsham (Mr. Maude)? Will he tell us exactly why the Australian economy, which is more dependent on the Asian economy than ours, is growing at a rate of 2.2 per cent., while the United Kingdom economy—which, by his own admission, is less dependent on the Asian economy—is growing at a rate of only 0.8 per cent.?
Mr. Brown: As the hon. Gentleman knows, the British economy has been growing at an average of more than 2 per cent. over the past year. I shall give the figures tomorrow.
The hon. Gentleman should look at the figures relating to employment, which show that more people are employed in Britain than ever before. As for unemployment, which is another measure of bad performance, we have 400,000 fewer people unemployed.
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I can tell the hon. Gentleman that the Australian Government are as interested as the British Government in reforming the international financial system. It seems that the only organisation that is uninterested in reform is the Conservative party.
Mr. Chris Pond: I welcome my right hon. Friend's statement, especially the statement of the principles of social policy that have been agreed through the G7.
Will my right hon. Friend confirm—especially in the light of his last few words—that the country's employment record has been rather better lately than the record of the last Government, from whom we inherited the largest proportion of workless households in the European Union? Will he also confirm that it is understood by all members of the G7, on both right and left, that decent social standards are a precondition for economic progress, and that social justice is not an alternative to economic prosperity?
Mr. Brown: We have held discussions about the code of social policy, not simply with the G7 and the IMF but with the Commonwealth countries. They, too, are interested in how we can establish internationally agreed principles of social policy that can guide their peoples' behaviour. I like to think that we can make some progress on that, in terms not just of international debt, but of laying down social standards that all countries are prepared to adopt.
In view of what is happening in Indonesia—which I visited only a few months ago—and in Korea, Malaysia and many other Asian countries, the sooner we can secure agreement on what can be done to help in these difficult social times, the better. I assure my hon. Friend that, although I can, of course, make my party political points about the Conservatives' record on unemployment, it is more important to us to make progress throughout the world in dealing with some of the major social problems.
Mr. Andrew Tyrie: The Chancellor said that the IMF quota increase was agreed in July by the House. In fact, it was put upstairs in a Standing Committee, where there was an almost farcical exchange, with very little understanding by the Government of what had been agreed. Billions of pounds of British taxpayers' money is at risk here. Will the Chancellor acknowledge that, in future, all IMF quota increases should be taken on the Floor of the House?
Mr. Brown: I am happy to debate the issues of international financial institutions sensibly, and I hope that the whole Conservative party will join that debate when we have it. On the IMF quota increase, it is correct that, in Committee before the summer recess, we approved the UK share of the quota increase. It is also true that we approved in Committee last year the steps that the UK needs to take to participate in what are the new arrangements for borrowing.
I agree that these are important issues, but I think the hon. Gentleman would want Britain to continue to be the fourth biggest shareholder in the IMF, and to play our full part in the international institutions, and would want Britain's influence to count throughout the world. That depends on our playing a full part in the international

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financial institutions, and not on some cheap party political point saying that we should not pay our share of the quota.
Mr. Mike Gapes: Will my right hon. Friend confirm that, when he discussed these matters with his G7 colleagues, one of the matters that might have been discussed was how to promote such policies internationally? Will he confirm that the Conservative party has decided to get rid of the torch symbol and instead adopt the ostrich in its approach to these matters?
Mr. Brown: I know that, because the Conservative party failed in government, it wants to think that every Government will fail internationally, and is cynical about what can be achieved; but my hon. Friend is right. Progress on dealing with some of these international problems over the past few months has been important. We must go further, and make more progress on these issues. That cannot be done unless the G7, central bank governors and Finance Ministers work together and we can galvanise the IMF and World bank into action. I would have hoped that there would be all-party support for that throughout the House.
Dr. Vincent Cable: May I add my support for the international economic initiatives, but specifically ask about exchange rate stability? Would the right hon. Gentleman confirm the written answer that was given to me by the Economic Secretary to the Treasury a few days ago—that, since the Government came to office, the pound sterling had appreciated by over 10 per cent. in real terms, when we take into account different rates of inflation and the movements of all currencies, including the dollar; in other words, the pound sterling is over 10 per cent. less competitive?
Mr. Brown: I do not accept the hon. Gentleman's interpretation of the figures. When we came to power, the pound against the deutschmark was, if I remember rightly, 2.79; it is now less than 2.79. For a time, it was up further. It has now come down 10 per cent. In relation to the dollar, the pound and the dollar have not changed a great
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deal over the past two or three years. I have understood the concerns of exporters in these matters, but I keep saying to the House, and I will repeat it: the bigger concern of every part of industry would be if we were ever to return again to the boom-bust conditions that were left to us by the Conservative party in the early 1990s.
Mr. Geoffrey Clifton-Brown: Would not the Chancellor's statement this afternoon have been greeted with greater credibility if he had stopped blaming everyone else except the Government for this country's economic woes? Why did he say in public during the summer that the growth target that he announced in the last Budget had been revised downwards from 1.7 to 1 per cent? Why did he tell this morning's "Today" programme rather than Parliament that our borrowing was being increased to a staggering £22 billion? When will he take some proper measures to help manufacturing industry, and to save some of the jobs that are being lost in his constituency and elsewhere?
Mr. Brown: I do not know what question the hon. Member has been given to ask, but let me say that America is revising down its growth forecast, Japan has revised down its growth forecast, and Europe and Latin America are revising down their growth forecast. Every country is having to revise down its growth forecast as a result of what is happening throughout the world. The Conservative party wants to opt out of the world. We are part of a global economy, and the sooner it recognises that, the better.
Mr. Tim Collins: Will the right hon. Gentleman now answer the question he dodged earlier? If he believes in transparency on monetary policy, why has he not criticised the refusal of the European central bank to publish the minutes of its meetings? He has lectured Conservative Members on foreign policy, but has he not noticed that Germany has not a new President, as he said earlier, but a new Chancellor? That is something that Britain needs, too.
Mr. Brown: If the hon. Gentleman wants to be accurate, he will acknowledge that I have criticised the European central bank and asked it to have transparency in its operations. The hon. Gentleman should be correct rather than wrong in his assertions.

Personal Statement (Mr. Ron Davies)
4.26 pm
Mr. Ron Davies: I am grateful to you, Madam Speaker, for allowing me this opportunity to make a personal statement.
Last Monday evening, I made a severe error of judgment in failing to protect my personal safety. I became the victim of what was for me a frightening and shocking crime. I reported the matter to the police, and the process of law will now take its course. For that reason, I shall make no further comment on that aspect of the matter. However, I offer my heartfelt apologies to the House for any embarrassment that I might have caused.
On Tuesday morning, I explained to the Prime Minister what had occurred, I apologised for it, I offered him my resignation, and he accepted it. I want to place on record my thanks to the Prime Minister for his personal support and solicitude over the past few days, which have been of very great comfort to me.
The events of the last week have been unremittingly agonising. I could not have got through them without the love and support of the two people most dear to me—my wife Chris and my daughter Angharad. Without the constant support of a few other very close friends I cannot imagine how I could have got through this nightmare, and I offer them my heartfelt and most profound thanks. I also want to thank many other close friends for their endless patience in the face of a constant barrage of media pressure. I am grateful for the messages of support from former ministerial colleagues, Members of both Houses—from both sides—and the public at large.
The shock, for me, of the events of last Monday, and the sadness of my resignation, have been added to by media intrusion into my private life, reporting as fact a stream of rubbish. Rumour and lies have been asserted as truth. The whole of my adult life has been pored over for something that could be twisted to suit the present prejudice.
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Ultimately, this arbitrary abuse of power is an attack not just on me, but on all our rights. The right to privacy belongs to all citizens. The victims of crime, even if they are in public life, cannot be excluded from that. We all have rights; we also all have responsibilities, of course, and that applies to the media. The media have the right to freedom, but they must carry the responsibilities to exercise that right judiciously.
In my childhood, I learned a very hard lesson at a very early age—one cannot allow powerful people to bully the weak or to abuse their own power. How willing will the next victim of a crime be to report it; how eager will people be to stand for public office in the knowledge that one mistake might result in the whole of their lives being picked over and twisted out of all recognition? How can it improve democracy if our lives in this House, our influences and our relationships, were all laid out for public titillation? We are what we are. We are all different—the product of both our genes and our experiences. Members of Parliament are no different from the society that we represent.
Since I became the Labour party spokesman for Wales in 1992, the creation of a new democracy for Wales has been for me a personal commitment and a political responsibility. I know that the process that I started will go on, creating a more tolerant, more open and more mature way of conducting politics. My experience in the past week could not have provided me with a more vivid demonstration of the need for such a tolerant and understanding society. The support that I have received from colleagues, from ordinary citizens and, indeed, from the Welsh media reassures me that that is a vision that is widely shared.
Not for the first time in my life, I have been badly beaten and hurt. I believe that my defences are strong enough to see me through this very trying time. From adversity, of course, can come strength. That will be so in my current circumstances. I worked hard to change the face of politics and government in Wales. I am now more determined than ever to see those changes through.
I am very grateful to you, Madam Speaker, and for the attention of the House.
Hon. Members: Hear, hear.

Journalists (BBC)
4.30 pm.
Mr. Eric Forth: On a point of order, Madam Speaker. You and other hon. Members are very much aware of the reliance that we place on a free journalistic corps—on the fact that journalists must be absolutely free to report on what hon. Members and others do. Can you suggest what we might do to protect journalists in the BBC against an absolutely unjustified trammelling of their freedom which seems, on the face of it—if we can believe the reports—to result from some high-level cronyism between elements in the Government and elements in the senior level of the BBC? The matter surely must concern you, Madam Speaker, as much as it does other hon. Members. Will you say what can be done about it?
Madam Speaker: I concern myself with many matters in the House, and try to give useful and beneficial guidance to hon. Members. However, on those matters, I think that we must all act in accordance with our own consciences.

Security and Intelligence Agencies
[Relevant documents: The Intelligence and Security Committee's Annual Report (Cm. 4073) for 1997–98 and the Government's reponse (Cm. 4089).]
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dowd.]
Madam Speaker: Before I call the Secretary of State, I should say that I had intended to place a time limit on Back Benchers' speeches in this debate, as there is great demand to speak in it. However, we are starting in good time, and I leave the House to discipline itself for once.
4.32 pm
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): Thank you, Madam Speaker; I shall take your words to heart.
Today's debate is a piece of parliamentary history. This is not the first report of the Intelligence and Security Committee, but it is the first time that Parliament has had an opportunity to debate one. It is not so long ago that Governments would not officially recognise the very existence of the Secret Intelligence Service—or I6, as it was popularly known—and in those years it would have been inconceivable that Parliament should debate its functions. Even the location of the agency's headquarters was protected information. It is perhaps a measure of the new openness that, when I last visited those headquarters, I noticed that the nearest bistro has been named Miss Moneypenny's"—which is an interesting case of fiction invading real life.
It is a consequence of the work of the Intelligence and Security Committee that we are able to have this debate at all. The first report of the new Committee fully justifies the new mechanisms of scrutiny. It sets out the work programme of the agencies with clarity, and also raises openly, but responsibly, discussion of areas of legitimate public concern, particularly relating to the personnel management of the agencies and the files on individuals held by them.
The Committee's work necessarily is not in the open. It would sharply inhibit the candour with which its questions were answered if it met in open session. Some hon. Members may imagine that, because the Committee meets and takes evidence in private, it provides an easy life for its witnesses. I should disabuse the House of that idea. As one of those who has given evidence to the Committee, I can assure the House that the fact that the meeting takes place in private does not in any way diminish the acuteness of the questioning, which is just as testing as any in front of the press.
I thank all members of the Committee for the hard work that they have put into the report. Their effort is all the more appreciated as, by definition, it cannot lead to the public recognition that might attend membership of a Select Committee. The success of the Committee owes much to the experienced hand of its Chairman, the right hon. Member for Bridgwater (Mr. King). The House is fortunate to have in the Chair of the Committee a Member who has had extensive experience, in Northern Ireland and at the Ministry of Defence, of the work of the agencies. As the report of the Committee stresses, the frankness with which the agencies are able to respond to

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its scrutiny is crucially dependent on the relationship of trust between the agencies and the members and the Chairman of the Committee.
The Government welcome the report. Our published response to the report has already demonstrated that we find ourselves in agreement with the bulk of the Committee's recommendations, although there are some which are for the House itself, not for Ministers, to progress. I would begin with the very lucid observations in the foreword to the report. I would agree with the Committee that the three agencies are operating in an environment that has changed dramatically over the past decade.
For the first 40 years after the war, the role and justification of the three agencies was self-evident. Europe, and indeed much of the world, was divided into two armed camps, with a very real risk of hostilities between them. Today, three of our former potential enemies in the Warsaw pact are becoming firm allies in NATO. Almost a dozen of the countries of the former communist bloc are democracies on the threshold of membership of the European Union.
We are fortunate to be living through a period of such exciting and historic transformation in our continent, yet there remain security threats to our country, some of which have become more serious over the same decade in which the cold war has receded. The cold war provided a world order of a kind, and not everything that has happened since its disappearance has been either predictable or welcome.
The conflicts in the former Yugoslavia continue to bring home to us the dangers to regional peace from the revival of a narrow ethnic nationalism. The recent strategic defence review confirmed that British forces must be ready for deployment on a variety of missions to keep the peace and to ensure humanitarian relief. Accurate and reliable intelligence will remain as important to those missions as it ever was to the defence of the central front of NATO. Moreover, the increased communication and speed of transfer of equipment and technology which comes with globalisation brings with it challenges as well as opportunities.
Increased mobility creates new opportunities for the drugs trade, which is now second only to the oil trade in value. The revolution in the transfer of knowledge creates new problems of preventing access to the technology required for weapons of mass destruction; and terrorists today can conduct their campaigns on a global horizon, not just on a national stage.
We have sought to give new priority to combating the global concerns of drugs, terrorism and proliferation, and I want to put on record my appreciation of the vigorous and imaginative way in which the three agencies have responded to these fresh priorities. It is of course essential to the continuing success of the agencies' work in these spheres that I cannot disclose to the House their specific successes, of which I know from my own experience. The nature of what they do means that they cannot boast of their achievements if they are to remain effective, but let me assure the House that they have scored real achievements.
The work of the agencies is of major importance in fighting the menace of the drugs trade. The intelligence that they provide to the law enforcement agencies helps us to go further up the supply chain, targeting the barons
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rather than the underlings. In the past three years, the agencies have contributed to more than £200 million worth of drugs being seized and dozens of criminals being arrested.
The work of the agencies is also crucial in frustrating the ambitions of those regimes that are trying to acquire the technology for nuclear, chemical or biological weapons. Without the intelligence from their monitoring, we would never have the accurate information needed to apply diplomatic pressure or to secure effective international agreement to discourage proliferation; nor would we be able to disrupt covert attempts to acquire such technology. They are also vital to the fight against terrorism. By keeping us alert to the preparations of the terrorists and by helping us to frustrate those preparations, they have saved lives from the hands of the terrorists.
Sir Peter Emery: I thank the Foreign Secretary for giving way. Although none of us would wish to decry the work of any of the three agencies, does he accept that because the Intelligence and Security Committee was set up by the Government and reports to the Prime Minister, it is different from the Select Committees? Does he further accept that Select Committees retain the right to call on any of the agencies that may be concerned specifically with the work of the Intelligence and Security Committee—for example, in respect of drugs, which would concern the Home Affairs Committee? Matters of foreign affairs which are the responsibility of the Foreign Affairs Committee would be another case in point.
Mr. Cook: I would anticipate that the Chairman of the Intelligence and Security Committee might wish to make an observation on that later. However, I would correct the right hon. Member on one point: the Intelligence and Security Committee was set up by Act of Parliament. It is accountable to my right hon. Friend the Prime Minister and we are laying before Parliament the report that it submitted to him. That is right, and it gives Parliament the proper opportunity to exercise scrutiny.
The involvement of other Select Committees will be a matter for review on an ad hoc, case-by-case basis where it may be appropriate for those Committees to intervene on intelligence matters. However, it does not seem to me that there is much merit in maintaining an Intelligence and Security Committee—with the specific task of building a relationship of trust with the intelligence agencies in order to carry out the job of scrutiny—if the same job is then done by Select Committees. A Select Committee that wished to intervene in those matters must be carrying out a clear and distinct job.
Mr. Dale Campbell-Savours: Will my right hon. Friend give way?
Mr. Cook: I happily give way to my hon. Friend, who I believe is a member of the Committee.
Mr. Campbell-Savours: I have listened with great care to my right hon. Friend. Is it not the truth that if the Committee were to be a fully fledged Select Committee, many of the arguments that have taken place would not be necessary in future?
Mr. Cook: Possibly the one that we have just had would not need to take place in future, but I can assure

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my hon. Friend that there would be many others. I believe that he has not yet commanded a majority on the Committee for his proposal that it should transform itself into a Select Committee. Of course it must be a matter of judgment—ultimately the judgment of Parliament as to whether it wishes to amend the legislation—but I am sure that Parliament would be wise to reflect on whether, in the move to greater openness that would be made with becoming a Select Committee, some of the candour and openness with which the agencies can co-operate with the present Committee would be lost.
Mr. David Winnick rose—
Mr. Chris Mullin rose—
Mr. Cook: I shall give way, but at some stage I need to proceed with my speech on the report.
Mr. Winnick: Does my right hon. Friend accept that, in opposition, we made proposals for more openness and voted accordingly? Does he further accept that as long as there is a lack of proper parliamentary accountability, as is the current position, regardless of the existence of the Committee, the controversy will continue in one way or another? The way to resolve it is by allowing the type of scrutiny that we proposed in opposition.
Mr. Cook: We did commit ourselves to more openness, and today's debate is an example of our being more open than any previous Administration. Moreover, our work on accountability for the Secret Intelligence Service shows that we are willing to be more open. As the House will be aware, I have ordered a report to be prepared by historians in response to a parliamentary question on the Zinoviev letter which will put more into the public domain than has yet been revealed.
The current Administration have no need whatever to be apologetic about our record on openness in regard to the intelligence and security services. On the contrary, we have taken steps that no previous Administration have taken, but at the same time we have to be careful that we create mechanisms of scrutiny that will actually work and will not result in the process being so open that the agencies cannot co-operate with them in the same way as they co-operate with the present mechanisms.
So far, I have discussed the work of the three agencies as one single effort. That makes sense because they co-operate fully together, and the intelligence assessments which we see as Ministers can draw on the work of all three agencies. I also wish to give a few examples of their separate work.
The Security Service leads the intelligence war against terrorism related to Northern Ireland. Its work with the police has led directly to the disruption of major terrorist attacks and the arrest and conviction of many terrorists.
Last year, six Provisional IRA members were convicted of planning to blow up six of the main electricity substations feeding London. Had the terrorists succeeded, there would have been immense disruption to the lives and prosperity of the people of London.
Since 1996, the service has supported the law enforcement agencies in the fight against organised crime. That co-operation has already resulted in success.
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One example is the conviction last year of a major criminal on a firearms offence. The Security Service played a key role in bringing him to justice.
Similarly, GCHQ has given vital support to our military in every crisis since the second world war. That is as true today as it was at the time of the cracking of the Enigma code. We have well over 50,000 troops deployed in more than 20 different operations around the world. Some of them operate in conditions that are anything but safe. The intelligence provided by GCHQ helps them cope with volatile and dangerous circumstances. Our troops in Bosnia, for example, get intelligence from GCHQ that enables them to work more effectively and safely.
GCHQ also has a key defensive role. It is one of the world leaders in developing information technology that is safe from attack. The Government secure intranet launched in April was a good example. So was the GCHQ-designed Brent secure telephone, which is both highly effective and the cheapest totally secure telephone system ever produced. In a world in which information is increasingly the single most important commodity, the ability to protect computers from attack is a fundamental requirement for our national security. The work of GCHQ will help ensure that Britain can go into the information age with confidence and, as a result of current investment, GCHQ will be able to face that future in a modern building on a single site in place of the present two sites.
Mr. A. J. Beith: Will the Foreign Secretary give way?
Mr. Cook: I had rather anticipated that the hon. Member for Cheltenham (Mr. Jones) would wish to intervene, but I am happy to give way to the right hon. Gentleman.
Mr. Beith: My hon. Friend hopes to catch your eye, later Mr. Deputy Speaker. I hope that the Foreign Secretary recognises the force of what the Committee said about how undesirable it is that such an enormous project of tremendous importance to Cheltenham and the surrounding area should have been overseen by no fewer than four different director-generals.
Mr. Cook: I felt that on one arithmetical problem, the Committee slightly overegged it. To be fair, the fourth director was in post for five years, which is a reasonable period. However, I acknowledge that there have been three directors over the past two years. Of course, there is a balance to be struck. It would indeed be desirable that directors should remain at GCHQ for longer. On the other hand, over the past two years the present Government and the previous Administration, who were responsible for the first of those three appointments, have sought to make sure that those appointed as directors were people of the highest calibre and potential. It is a matter of record that people of high potential and high achievement tend to get poached for promoted posts, and the fact that two of those three have departed for posts of permanent secretary is a tribute to their calibre.
I assure the right hon. Gentleman that we will continue to make sure that GCHQ continues to receive top management of the highest calibre; and I hope that we can now have a period of stability to see the project through. The project is not just the work of one man or woman as director. It is the work of a team. Expertise has remained available throughout that period.

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GCHQ and the Security Service have been opening up. Both have publicly advertised for recruits and both now have websites. The Security Service has produced a booklet describing its work. However, the third agency—the Secret Intelligence Service—must remain secret. I cannot be as frank with the House about its successes as I have been about those of the other two agencies.
Those who work with SIS overseas often risk their lives so that our lives may be safe. Their effectiveness and their lives depend on their identities and work remaining out of the public eye. Their ability to gather intelligence depends on the confidence that their sources have in the absolute trustworthiness and discretion of the service. Their international links depend on their sister services in other countries knowing that when they hand information to SIS it will remain secure.
For all three agencies to perform their work adequately, they must be adequately financed. The function and structure of the agencies were separately examined in the recent comprehensive spending review. We concluded that there was a real and continuing need for the work of the agencies. If they are to do their job, they must have confidence that they will be resourced to fulfil the tasks that we place on them. I am pleased that the comprehensive spending review has halted the decline in the resources available to the agencies and enabled them to face the future with confidence. That is in contrast to the past five years, during which the budget of the agencies declined by nearly one third.
I particularly welcome the care and attention that the Intelligence and Security Committee has paid to issues of personnel management. All three agencies depend wholly on their staff. For each, their staff are their key asset. When they join they sacrifice some personal freedom. The agencies depend on the loyalty and discretion of their staff. In return, we need to make sure that there are proper arrangements in place to deal with their problems and grievances.
I am glad that the Committee recognised the valuable work done by the staff counsellor. We share the Committee's view that Sir Christopher France has an important role. The Government also share the Committee's anxiety that staff should, as much as possible, enjoy the same rights as other employees, including access to industrial tribunals. As we have already said, we are reviewing whether and how it might be possible to give access to a tribunal for those sensitive cases that are currently excluded from such arrangements.
The Government have already demonstrated their commitment to the rights of the staff who do important national security work. One of our earliest acts was to restore to staff at GCHQ the right to belong to an independent trade union. Three of those who lost their jobs because they refused to lose their union membership are now back at work at GCHQ.
Mr. Nigel Jones: Will the Foreign Secretary accept the thanks of all the people of Cheltenham—particularly the 14 who were fired for keeping their trade union membership—for the fact that the Government kept their promise to remove the ban on GCHQ trade unions soon after taking office?
Mr. Winnick: Are the Tories embarrassed?
Mr. Cook: I do not think that my hon. Friend addressed that question to me.
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I am grateful to the hon. Member for Cheltenham for that comment. I know from what the 14 people concerned have said that they appreciate what we have done. As one of them has said, we have righted a wrong that lasted for too long.
The Committee is right to pay attention to personnel management, because this is not just an issue of ensuring that we treat fairly those who are dedicated to the national interest. It is also vital for the security of the agencies that they detect—and when possible resolve—staff dissatisfaction before it leads to disaffection.
At the height of the cold war, a major threat to the security of the agencies was the possibility of the corruption of a member of staff by bribery or blackmail. Although that threat may have receded, a new one has arisen. Today, the extravagant rewards that can be gained from an exclusive deal with a newspaper or book publisher can provide a bigger payout for disloyalty than the KGB ever offered. Moreover, it does not necessarily come with the same insistence on accuracy that the KGB might have required. It therefore remains vital that the agencies be vigilant in recruiting their staff and maintaining the motivation of their officers.
The members of the Committee are familiar with the difficulties caused to SIS and the Security Service by former members of staff who present a cocktail of fact and fiction as a portrait of the work of the services. Considerable investment has been made to reduce the possibility of such cases in future by improving the vetting and recruitment procedures and strengthening the monitoring of staff in post.
The secrecy that is essential to the work of the agencies means that most of our constituents are not aware of their real work. They are left to form their impressions of the three agencies from the word processors of novelists and the cameras of Hollywood. Those impressions are not always entirely accurate. It may be challenging for the Intelligence and Security Committee to correct all those false impressions satisfactorily. Nevertheless, by providing a candid and sober account of the work of the three agencies, the report restores some balance. Our constituents pay for the three agencies. They must have access to an honest explanation of why it is important that their money should be invested in them.
That is why it was right to commit a day of parliamentary time to debating the report of the Intelligence and Security Committee. I commend the work of the Committee to the House and I look forward to working with it to ensure that we get the right balance between operational secrecy and parliamentary scrutiny for these three pillars of our national security.
4.56 pm
Mr. Michael Howard: I pay tribute to the men and women who carry out, on behalf of us all, some of the most difficult, delicate and dangerous duties that any servants of the Crown are asked to discharge. I speak as shadow Foreign Secretary, but for four years, as Home Secretary, I had responsibility for the Security Service. In that capacity, I acquired detailed knowledge of the activities in which the personnel of that service engaged, through general briefings and through the ability to follow the course of particular investigations that comes with the duty to authorise warrants. I was left in no doubt about the enormous risks run by those whom

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we charge with such responsibilities on our behalf. I welcome this opportunity to pay tribute to them and to members of the other agencies for their work.
There can be no doubt about the continuing need for that work. In the introduction to its latest report, the Intelligence and Security Committee refers to the threats to this country and to the peace of the world that have arisen in the aftermath of the cold war. The report asks starkly:
"Was not the Cold War, in its awful way, a form of rigid security system that has now collapsed, and have not new developments and technology and 'globalisation' produced their own dangers?"
Without any trace of nostalgia for the cold war, few, if any, hon. Members would decline to answer that question in the affirmative.
The next paragraph of the report identifies some of the threats, including the enormous increase in the instability of the world and the breakdown of what had previously appeared to be stable sovereign entities into separate states, often riven by ethnic enmities. The consequent need for peacekeeping or humanitarian missions places a premium on the product of intelligence services. The new world order, which was hailed with such optimism just a few short years ago, has since degenerated into a discord of disorder.
Despite welcome developments in Northern Ireland, the threat of terrorist attack remains. Growth in the activities of serious criminal organisations, centred on the drugs menace and associated with large-scale money laundering, has continued apace. Many such organisations have access to resources that dwarf the entire national incomes of many sovereign states. Their sophistication is formidable. The proliferation of weapons of mass destruction poses a danger that we ignore at our peril. The need for this country to have efficient, effective intelligence services at its disposal is as great as ever.
Efficiency and effectiveness can be helped by proper scrutiny arrangements. The increased accountability that such arrangements bring can promote the better working of the agencies as well as, of course, providing all the advantages of greater openness and democratic control. That is why the previous Government introduced arrangements in the Intelligence Services Act 1994 which included the establishment of the Intelligence and Security Committee. Its latest report does much to inform today's debate. I am happy to join the Foreign Secretary in paying tribute to the Committee, and particularly to my right hon. Friend the Member for Bridgwater (Mr. King), who has chaired it with such distinction since its inception.
The way in which the Committee has discharged its responsibilities in both the previous Parliament and this one has given the lie to the doubts that were expressed by some who now sit on the Government Benches. The present Secretary of State for Trade and Industry, for example, asked in respect of the Intelligence and Security Committee:
"Are not we…supporting what is, to all intents and purposes, becoming a charade?"
The hon. Member for Walsall, North (Mr. Winnick) spoke against the presence on the proposed Committee of former Cabinet Ministers. He said:
"Those people will be seen to be against any type of oversight of the security services."—[Official Report, Standing Committee E, 29 March 1994; c. 267–72.]
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I hope that, in winding up the debate, the Home Secretary will acknowledge that those objections were misconceived, and will distance himself from those comments.
That is the background against which we must consider some of the issues raised in the report that are relevant to today's debate. Yet another tragic murder over the weekend, and the acknowledgement of responsibility for it by what might be a new terrorist grouping, reinforce the need for continuing vigilance by the Government as a whole and the security services in particular in respect of events in Northern Ireland. The work that has been done on combating Irish terrorism in recent years has been, in the full and literal sense, absolutely heroic. It must continue; it will not be assisted by the continuing release of those who have been convicted of the most brutal crimes without any decommissioning of paramilitary arms.
The report contains a brief and necessarily curtailed reference to Iraq. Again, events over the weekend underline the importance of continued vigilance. The threat to world peace from Iraq is acute, and we must combat it by all legitimate means at our disposal. The contribution of the security services must continue.
The Committee's programme of work refers to its intention to pursue questions of intelligence policy in relation to recent events in Sierra Leone in the light of the findings of the Legg report. The House will recall the difficulty faced by the Foreign Affairs Committee in trying to question the Foreign Secretary on the subject. At every stage, information had to be squeezed out of Ministers and officials. The process was as prolonged and painful as drawing teeth without an anaesthetic.
The arms-to-Africa affair evolved into a constitutional confrontation between the Executive and Parliament. The Foreign Secretary attempted to put into practice a new constitutional doctrine that, if he orders an internal inquiry, which is held in private, it should take precedence over and, indeed, displace the role of Select Committees. In view of that, will my right hon. Friend the Member for Bridgwater tell the House a little more about the Committee's plans in that regard and what progress, if any, has been made?
One of the most significant changes in recent years in the Security Service has been the additional responsibilities entrusted to it concerning serious organised crime—a change made when I was Home Secretary. I therefore read with particular interest the information in paragraph 17 of the report, and look forward to the results of the further work that the Committee intends to undertake in the area. I hope that the Home Secretary will tell us a little more about the Security Service's work in that area in his winding-up speech. Like the Committee, I very much welcome the new priority given by the Secret Intelligence Service and GCHQ to their work against drug trafficking.
The Committee highlights several other issues in its report. Its recommendations on finances seem very sensible. The new form in which information was presented to the Committee is helpful, and may be helpful to Ministers. I agree, too, that formal provision should be made for the disclosure of information and reporting by the Comptroller and Auditor General to the Committee, in consultation with the Chairman of the Public Accounts Committee. It would be desirable, where practicable, for

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the National Audit Office to carry out further value-for-money studies into the agencies' activities. Will the Home Secretary tell us to what extent that has been taken forward since the publication of the Committee's report?
The Committee's recommendations on personnel management issues are especially important. It is clearly crucial, as the Committee said, that every effort should be made
"to address and resolve potential disaffection at an early stage."
The Committee makes other recommendations on the subject, of which the most interesting is that employees of the agencies should have access to industrial tribunals. The Government have said that they are examining the proposal. I suspect that it will prove to be necessary for the Secretary of State to retain the power to issue a certificate where necessary to prevent an individual from having access to a tribunal, although it may nevertheless be possible to adapt several of the Committee's recommendations and, indeed, adopt them. I would support such a move. Has any further progress been made in implementing the proposal?
Conservative Members will watch with interest the effect of the Government's decision to restore trade union rights at GCHQ, conscious of the fact that, before the decision to withdraw those rights, 10,000 man days had been lost to strike action. As a result of the previous Government's general trade union reforms, the entire climate of industrial relations in Britain is very different. That difference in climate may well be sufficient to prevent a return of the sad, strike-torn days that led to the ban. I certainly hope so.
Mr. Allan Rogers: I am sure that the shadow Foreign Secretary would not want to mislead the House, but by just giving the figure of 10,000 man days, he has created an entirely sad picture. Will he say how many people work at GCHQ and over what period the days were lost? For instance, we could be talking about 1,000 employees losing only 10 days each—but over what period? It is not good enough to make such a statement without justifying it.
Mr. Howard: I am afraid that I do not share the hon. Gentleman's premise. The 10,000 man days lost through strikes at GCHQ were 10,000 fewer man days devoted to protecting the defences of the country and reinforcing them with valuable intelligence activity. That is the point at issue.
Mr. Winnick: The ban was imposed on 26 January 1984. Is the shadow Foreign Secretary aware that, after the Falklands war, GCHQ employees were greatly praised by the director-general? Does that not show that, once again, GCHQ employees carried out their work properly? Some 18 months after that lavish and justified praise, the ban was imposed. Do the Conservatives plan to restore the ban, should they return to power?
Mr. Howard: There is no inconsistency whatever in the two points to which the hon. Gentleman referred. Of course employees of GCHQ did excellent and important work during the Falklands war. Of course it was right to pay tribute to that work. Of course it was wrong to have 10,000 man days lost through strike action. There is no inconsistency in those propositions.
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The one area where the Government appear to differ from the Committee relates to the need for an independent element of scrutiny in reviewing files for destruction. The other recommendations of the Committee in respect of files and personal records have found greater favour with the Government. I have noted the reasoning behind the Government's reply, which is set out in paragraph 16 of their response to the Committee's report.
I have also read the report of the Adjournment debate secured by my hon. Friend the Member for New Forest, East (Dr. Lewis) earlier this year, and the Home Secretary's reply to it. In that debate, the Home Secretary delivered a comprehensive snub to the then Minister without Portfolio—now Secretary of State for Trade and Industry—who was reliably reported to have called for the destruction of his own files. In view of that Secretary of State's admitted membership in his youth of the Young Communist League, the House may well consider his call for the destruction of his files a piece of gut-wrenching hypocrisy. I appreciate that a number of my hon. Friends will have views on that proposal, and I want to hear them before coming to a firm view.
The Government are rightly more sympathetic to the Committee's decision to have available some investigative capacity of its own. We look forward to seeing how that matter develops.
Mr. Malcolm Savidge: On a point of order, Mr. Deputy Speaker. May I ask whether the Secretary of State for Trade and Industry was informed that an attack was to be made on him before it was done as I believe is usual in the House.
Mr. Deputy Speaker (Sir Alan Haselhurst): That is entirely a matter for right hon. and hon. Members.
Mr. Howard: I am happy to allay the anxieties of the hon. Member for Aberdeen, North (Mr. Savidge). I did cause a message to be passed to the Secretary of State for Trade and Industry to make sure that he was fully apprised of the position.
Mr. Robin Cook: The right hon. and learned Gentleman did not tell me.
Mr. Howard: I did not do so because, to the great pleasure of the House, I know that when I oppose the Foreign Secretary across the Table he will be present in the Chamber in his usual place, and it is therefore unnecessary for me to give him notice.
The activities of the intelligence agencies in a democracy must be the subject of proper scrutiny. With the establishment of the Intelligence and Security Committee—and the holding of this debate—that scrutiny has seen significant advances in recent years. Her Majesty's Opposition will play our full part in that scrutiny process in an appropriately responsible way.
5.12 pm
Mr. Tom King: Whatever our views may be on the operation of the intelligence agencies and of our need to scrutinise them, it is right—I speak on behalf of the Intelligence and Security Committee—to pay tribute to those who work for the Secret Intelligence Service, the Security Service and GCHQ. As a former President of the

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United States would put it, those people often put themselves in harm's way for our security. I certainly join in the tributes that have been paid to the staff of those agencies by the Foreign Secretary and the shadow Foreign Secretary, my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard).
As Chairman of the Intelligence and Security Committee, I welcome this first such debate, which is part of the parliamentary system and part of our parliamentary accountability. The Committee has a different structure. It is not a Select Committee, but a Committee of parliamentarians with responsibility for oversight of the intelligence and security agencies.
I appreciate the presence in the Chamber of the Foreign Secretary and the Home Secretary because, with the exception of the Prime Minister, they are the only people who can answer the debate by virtue of the nature of their responsibilities and the direct responsibility of the intelligence and security agencies to them. Much of their work cannot be delegated to more junior Ministers. Therefore, it is right for the Foreign Secretary and the Home Secretary to be here for the debate.
This is the first such debate, but it is the Committee's third report. However, it is the first report of the new Committee in the new Parliament. I have had the privilege of chairing the Committee throughout its years of existence, and I am grateful that a number of the Committee members were in the previous Parliament, so we have had a continuity of membership. I could not, for political reasons, say that we have had a welcome infusion of new members. However—granted that there would be a change of membership—I am very grateful to the old and new members for the role that they have played in what I am conceited enough to believe has been a successful and effective Committee. I am grateful to the Foreign Secretary and to my right hon. and learned Friend the shadow Foreign Secretary for the kind words that they have expressed to me personally and to the Committee.
This is the fullest report that we have produced as a Committee. I should like to express my thanks to our staff—led by Jonathan Allden—for the role that they have played throughout the past year. They have a lonely and independent role, because they are on secondment from the Cabinet Office and owe their allegiance to the Committee, a separate body. It is not the easiest of roles, and I am extremely grateful to them—as are the other Committee members—for the way in which they discharge it.
I owe an apology to the House, and to the wider public, for the content of our report, in the sense that—by nature of the reports that we publish—certain parts become totally unreadable because it is impossible to publish certain matters. The presence of asterisks in the most interesting places is perhaps best exemplified by the financial charts at the end of the report, which I insisted should appear. Someone suggested that we should just publish a summary but, with the support of the Committee, I insisted that the full charts appear.
Although not a single figure appears, the charts illustrate clearly that we had all the figures and the details. That was not the case in the first years of the Committee. It is a further illustration of the extension and evolution of the Committee's role that all those figures are now
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available. By looking at the headings, hon. Members at least know the subjects that we considered, including details, in terms of the SIS and the Security Service for example, of the payments to agents for information, and the different categories of information that we investigated and examined.
We are grateful in that respect for our relationship with the Comptroller and Auditor General and the National Audit Office. I pay tribute to my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis), the Chairman of the Public Accounts Committee—who is in his place—for his Committee's co-operation, and for his support in ensuring that the Intelligence and Security Committee had access to information. We are grateful to him also for encouraging the full co-operation of the Comptroller and Auditor General and the NAO.
In our unanimous report, the Committee referred to a fundamental question, which was addressed by both the Foreign Secretary and the shadow Foreign Secretary: do we need the agencies any more? Is it not true that, for the past 45 years or so, the structure of the agencies has been concentrated on tackling the biggest threat that we faced—the threat of a major world power, in the shape of the Soviet Union, intent on the subversion of the western democracies and posing a threat to our democratic institutions, our existence as a country and the continuity of our alliances?
After the collapse almost overnight, of the Soviet Union and the Warsaw pact, the problems that faced Russia as an independent country caused people to ask whether the threat had ceased to exist and whether we needed the agencies to continue in the same form. Many suggested that the agencies had invented new threats to justify their existence.
The Committee examined those assertions as fully as we could and, as the Foreign Secretary said, the Government considered the matter in the comprehensive spending review, in which we took a close interest and played a part. The Government concluded that expenditure on the agencies should continue to be much the same as before, recognising the fact that new threats had taken the place of old threats.
Probably the biggest threat is the risk of proliferation—a major preoccupation of the SIS—in nuclear, chemical and biological capabilities, especially because missile systems have increasing ranges and may be within the reach of some undesirable and unstable regimes.
The threat posed by the collapse of old structures is most clearly seen in the former Yugoslavia. If we are to play a part in peacekeeping—in Bosnia or in Kosovo—asking British people to go unarmed to monitor difficult situations, the very least we owe them is the best possible intelligence of the dangers that they may face.
I have read only the brief headlines of Sir Michael Rose's account of his time in Sarajevo but, when I was Secretary of State for Northern Ireland, he was a brigadier commanding one of the brigades, and I should expect him to confirm that the dangers that he faced in Northern Ireland—during what was, in many respects, a hairy time—were as nothing compared to some of the risks, uncertainties and hazards that arose as a result of the violent and unstable elements in the former Yugoslavia.

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The Foreign Secretary rightly paid tribute to the Security Service for its outstanding work in preventing what would have been two significant and hugely damaging IRA attacks in this country. However, the current extent of international terror is a sobering thought. Hon. Members may have read in our report the surprising fact that, on average, every month, there are 60 international terrorist incidents of one sort or another in the world. Those attacks may not impinge on us directly, but British citizens may be affected through hostage taking or other threats to our interests.
The increase in the drug trade and in international crime has been given a nasty new dimension by gangs from Russia, some of which include former KGB members. Their viciousness and their involvement in that nastiest of cocktails—drug trafficking—pose problems of a scale that we have not previously experienced.
Another new development, to which we referred only briefly in our report, is information warfare. Growing public concern about the millennium bug—a self-inflicted injury—has drawn attention to the wider problem. It may seem a harmless accident when a 17-year-old in Ealing hacks into the US Department of Defence computers on nuclear structures, or when innocent people amuse themselves by hacking as a hobby, but such techniques can be used as an instrument of aggressive activity by one nation state against another. That emphasises the importance of GCHQ's advisory role in securing our organisations and information structures against such attacks.
The Committee examined how the agencies allocate effort and decide on their priorities—in general, we supported their decisions. We also consider new issues—for example, what happened in Sierra Leone—as they arise. In that case, we examined the criticisms that were made about the lack of intelligence and the amount of support that was given to our high commissioner in an extremely difficult situation, involving not only the evacuation and safety of British citizens but relationships with outside companies and mercenaries.
My right hon. and learned Friend the Member for Folkestone and Hythe asked me to report on the interest that the Committee has taken in the matter. We have heard from Sir David Spedding, the head of SIS, and we have taken evidence from the chief of defence intelligence. We hope shortly to take evidence from Mr. Penfold, the high commissioner in Sierra Leone, and we shall consider the intelligence aspects of that affair.
Sir Peter Emery:Before my right hon. Friend leaves that subject, will he consider a matter that I do not think has arisen in the work of the Intelligence and Security Committee? Security matters are of considerable importance to the work of the Foreign Affairs Committee, which is responsible for looking at the conduct of the Foreign Office. The Committee, of which I am a member, will hear from the head of MI6 later this month but our invitation to security services involved with the Foreign Office has been declined.
Should not Select Committees be able to co-operate with the intelligence and Security Committee, so that, when a Select Committee is unable to obtain information, the matter could be passed to that Committee with its special relationship with Government? The Intelligence and Security Committee could then report to the Select
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Committee, so that the Select Committee would not be debarred from information that might be vital to its inquiry.
Mr. King: I shall speak about our role in oversight at the end of my speech; it may be relevant to my right hon. Friend's point.
A matter of particular interest—it has been the focus of the Committee's work this year and previously—is internal security in the agencies. The story has not been entirely happy on either side of the Atlantic. The most spectacular betrayals have been in the US—they led to the betrayal of British agents, too—but, as the Foreign Secretary said, and as the Committee identified, failures in security are no longer a result of ideological commitments. A deep commitment to the communist cause was the background to the famous British traitors and spies of earlier generations. Now, people are more likely to be seeking funds because they have financial or personal problems. The United States has also suffered as a result.
Secrets must be protected within an agency. People who give information to intelligence agencies are risking their lives. They will not do so if they believe that the agencies cannot be trusted not to disclose their name, address or background. One does not have to live in Northern Ireland to know what happens to people who inform. People will not take risks unless they are confident that the information and their identity will be protected. That is why that matter must be taken so seriously.
In some cases, we have lost information and secrets have been divulged—there has been a straight betrayal with the passing of information. People have breached their contracts, and the Official Secrets Act, in return for money. Staff have become disaffected because of grievances of one sort or another. The Foreign Secretary referred to two recent cases. People may, or may not, have been seeking payments from national newspapers for information or hearsay. Some cases have been the result of lax internal discipline and a failure properly to safeguard and classify information. Whatever the reason, all the cases matter.
The Committee has been trying not to chase after individual hares but to consider the fundamental issues that must be tackled. We have been, and will continue to be, critical of the agencies' attention to matters as elementary as personal security, such as random searches of people leaving buildings and ensuring that documents are secure. We have mentioned that problem in three successive reports. The most spectacular and awful CIA traitor carried shopping bags full of documents away, but no one checked or searched him. The result was the destruction—and execution—of the CIA network in the Soviet Union at the time, which endangered the life of Mr. Gordievsky, who was bravely passing on information.
We must not forget personal security and the boring business of continual vigilance, random searches, checking on people's concerns and taking an interest in people's personal circumstances. If an agency employee is divorced or has marital or financial problems, that may be a matter of national security concern. It is a difficult balance to strike. Agency employees are entitled to reasonable personal privacy. We cannot make their lives totally intolerable. With the benefit of hindsight, we can

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see that incidents in this country and in the United States have shown that someone should have realised that there were problems and identified them. That is why the report deals also with recruitment, as care must be taken to ensure that people are suitable for employment in the agencies in the first place. Employees should be monitored so that stress and personal difficulties can be identified before they pose serious problems. There should be proper counselling.
If all else fails, people should be entitled, as far as possible, to the sort of employment rights that others expect to enjoy. I am glad that the Government have responded positively on that. That is why we recommended the setting up of some form of tribunal to replicate as closely as possible an ordinary industrial tribunal. It might have a lawyer as chairman, with the membership including an employer and a trade union representative. Surely and certainly in this country we can find people patriotic and trustworthy enough to hear any secret that the Committee can hear and deal with it in such a tribunal without prejudicing the information.
The Foreign Secretary and shadow Foreign Secretary mentioned files, but I shall leave that subject to my colleagues, as many have taken an interest in it.
GCHQ has considerable capabilities and it is no secret that they have increased substantially. New challenges exist, since new technology is also available to some pretty nasty and dangerous people, not least drug traffickers and some of the big new organised criminal gangs. GCHQ must have accountability structures that ensure that systems authorising the proper interception of communications match up to the new challenges. We must also ensure that the privacy of the individual, to which all law-abiding citizens are entitled, is properly protected.
GCHQ is a massive organisation with extremely sophisticated equipment. It has to operate 24 hours a day, seven days a week without a second of interruption. That is the nature of its undertaking. However, it is planning to move, and not all transfers of public or even Government activities have been a seamless robe. The organisational challenge of the GCHQ move is massive, as the right hon. Member for Berwick-upon-Tweed (Mr. Beith) has pointed out, and the Committee makes no apology for drawing the Government's attention to that fact.
Oversight has been a process of evolution. The Committee is a strange animal—like no other Committee in the House. It is a Committee of parliamentarians, but we report not to Parliament but to the Prime Minister, who tables our annual report for debate here. We are not a Select Committee and we have our origins in the Intelligence Services Act 1994. The Committee was established at the same time as it was first admitted we had the Secret Intelligence Service, and the SIS and GCHQ were given a statutory basis, barely four years ago, which seems incredible when one looks back through the history of the CIA's activities.
The two agencies came in from the cold. They were perhaps fearful that parliamentarians might not be entirely reliable: that they would become caught up in party political warfare or point scoring between Members of Parliament and that secrets would leak out. Committee members realised that, whenever a Bill is enacted, the
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legal arrangements set out therein are only the bare bones on which one has to build. We have taken the trouble to study other oversight bodies. The American system is massive. The Inspector General of the CIA has a staff of 140. Its former director, Jim Woolsey, told me that, during his three years in office, there was not one day when he did not have to give evidence on Capitol hill to one committee or another. We did not want to follow the model of oversight on that scale.
One or two countries are still managing to proceed heroically with no oversight whatever: one of them is not far from the channel tunnel; but I understand that it is considering the matter at present. Others set up oversight committees to which they appointed all the difficult squad who had made speeches about intelligence agencies and did not believe in them in the first place. The intelligence agencies made jolly sure that they told those people nothing, so there was inadequate oversight and open warfare.
We have recognised that we work within the ring of secrecy. We inevitably, have, a close relationship with the agencies, and I hope that we have established a measure of mutual respect, but not a cosy relationship, as that would prevent us from doing our job. We expect to be told everything and to have every question answered unless there are clear and obvious reasons—of national security or secrecy, as narrowly defined as they can possibly be—why such information should not be made available.
We do not expect the agencies to hide behind a narrow interpretation of the law, because to do our job we need the clearest possible picture. We try to ask only what is relevant to our purposes, and I believe that we have succeeded in ensuring that the information is kept secret. We have sought not to destroy or undermine the agencies but to ensure, in their own best interests, that their performance at all times matches the standards that the public expect of them.
The public often see the agencies as sinister bodies that are out of sight and out of ministerial control, operating in a world of their own. Public support can be fragile: on the occasions that the Foreign Secretary mentioned, there were banner headlines thanking God for our security services, and people were full of praise, but when something goes wrong and there is an allegation of a mistake, misunderstanding or compromise involving the agencies, people are quick to believe the worst.
Our job is to try to bring some balance and ensure that we can investigate when there are serious grounds for public concern. That is why we have proposed an investigative arm: in certain circumstances, we need the ability to verify. When a situation arises that gives serious cause for public concern, the public often react to a statement by the head of an agency by saying, "He would say that, wouldn't he?", and if Ministers merely repeat an assertion from an agency head whom the public suspect of putting his agency's interests first and defending its position, the necessary public reassurance is lacking.
We shall not be able to help matters unless we can say that we have investigated the allegations, with full access to all the relevant information, and that we are satisfied either that a charge needs to be answered or that the charge is merely malicious and unfounded. Then we can speak with the unanimous, all-party voice of our Committee, which will carry the authority that the agencies are entitled to expect.

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I am grateful for the Government's positive response. We shall see how we go, because I well understand the nervousness and uncertainties, but I believe that an investigative arm is the correct next step in the development of oversight. It will be good for the agencies and attract public support and give our reports the authority that they need to meet any circumstances that may arise.
Oversight is the heart of our work. We need to have appropriate openness and oversight of a world of activity that is necessarily secret and essential to our country's ultimate security. We have made a start down that road; I do not pretend that we have reached the end of it. That is the sensible way of proceeding, and I believe that the existence of the Committee and its successive reports will create some public confidence and awareness that there is accountability in the agencies, that they serve our country well and that the systems under which they operate are appropriate to their activity.
5.45 pm
Mr. Allan Rogers: On behalf of all the Committee members, I pay tribute to the Chairman for his extremely hard work. His knowledge of the ins and outs of Whitehall has been invaluable in achieving what we all regard as an evolutionary process. I know that he would confess that, on occasion, he has been a little irritated with me when I have wanted to proceed a bit more quickly with that evolutionary process than was possible under the previous Government;, but now we are moving apace. Members of the Committee are unanimous in their desire to make progress on oversight.
Some of us—although not the Secretary of State for Trade and Industry or the Minister for Defence Procurement—who served on the Intelligence Services Bill when it was outed are present today; the Chairman of the Public Accounts Committee, who is here, was then one of the Foreign Office Ministers responsible for the legislation. The Government of that time were very brave in outing the security service with the Security Service Act 1989 and then the Intelligence Services Act 1994, but they were a little hostile to some of our suggestions.
Some of my hon. Friends may be anxious to reproduce some of the words that I uttered in 1994 promoting the idea of a Select Committee; perhaps I can pre-empt them by drawing attention to the fact that the Government accepted only one of dozens of amendments, if not more than 100, that I tabled on behalf of Her Majesty's Opposition of the day. That amendment increased the Committee from six to nine, which was a very wise step. The easiest way to describe the rest of my experience is that it was like running up against a brick wall.
The Government of the day were determined to move. I remember speaking to a senior member of MI6. I said, "I suppose you wrote this Bill, Sir Colin." He replied, "No, I didn't write it, but I did give a job description." That was the extent to which the agencies co-operated. It is important to remember that the agencies wanted a system of oversight, and co-operated in developing it. That was as far as we could go in those days. Since then, a critical development has been not only that the agencies trust the Committee, but that we are beginning, in some ways, to trust them.
We must also have the trust of our parliamentary colleagues, because without it we cannot properly oversee the agencies. At the press conference last week, a
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gentleman from the press asked whether we regarded ourselves as poodles of the agencies. I jumped in, with my big mouth, and said, "Yes." Everybody clapped and reported my comments, but they did not say that I added that we could be regarded as poodles if the present system continued.
One of my colleagues answered the question by saying that he was nobody's poodle, but he could have added that, under the present system, nobody would know whether we were poodles, because we get only the information that the agencies want to give us. We have a question and answer system, and we can investigate, but if the agencies hide behind reasons of national security or the risk of endangering the lives of agents in operations, we have to accept that and go no further. In that sense, we cannot perform our task of oversight properly, but the system is evolving and slowly moving forward.
As the Chairman of the Committee has said, one of the most important aspects of the report is the Committee's realisation that it is necessary to extend our powers, within the parameters of the present Act and the ring of secrecy, to include an investigative arm. We must develop that aspect of our work, but it is not intended that every member of the Committee should charge into MI5, MI6 and GCHQ and demand to see the books and lists of agents.
One suggestion is that the Committee should use someone who operates, or has operated, within the ring of secrecy to act on the Committee's behalf. That would protect the secrecy that the agencies require to carry out their work, but the Committee could be confident in its conclusions if, for example, any allegations were made about an agency's conduct.
Fellow parliamentarians should not think that we do not have heated debates on these contentious issues. We have long and difficult discussions on how the Committee's role should develop. We have had strong debates on the possible adoption of a Select Committee style for our proceedings.
The right hon. Member for East Devon (Sir P. Emery), who intervened at some length, is not in his seat now, but I can tell him that we have examined whether the Committee impinged on the functions of the Foreign Affairs Committee over the issue of Sierra Leone. All we are interested in is whether the intelligence systems worked. The Committee is not concerned about the politics of the incident, but we want to discover whether the Foreign Secretary, the High Commissioner and the other politicians involved were in receipt of fresh intelligence at the critical times.
There is obviously an interface between our role and the role of the Home Affairs Committee, which has a general responsibility in the area of crime. The previous Home Secretary asked the Home Affairs Committee to consider whether MI5 should be involved in the investigation of serious and organised crime, and it concluded that the police should be the body that investigated crime. However, MI5, with its peculiar talents and abilities which are not available in the police force, should be available to help.
If we cannot harness every aspect of the state against drug traffickers and other evildoers, what hope is there for our communities? Some have suggested that there is jealousy between different Committees, but I say that we must work together. The virtue of using MI5 in the

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investigation of serious and organised crime is that it has abilities and qualities that allow it to take a long-term view. It does not have to bring the criminals to account and follow them through the judicial process, because that is the responsibility of the police and others, such as Customs and Excise. For the Committee to do its job properly, it must evolve slowly along those lines.
Mr. David Davis: The hon. Gentleman kindly referred to my involvement in the original creation of the Committee. Now that I am not fettered by ministerial shackles, I can say that it was always my understanding that the Committee would develop and grow into the job. I strongly support the Committee's proposals for an investigative power, but does the hon. Gentleman recognise that the example he just gave of the overlap between the Committee's responsibilities and those of the Home Affairs Committee clearly demonstrates the specific powers that his Committee already has? That shows the experiment's worth.
Mr. Rogers: I wish that the right hon. Gentleman had been a little more positive back in 1994 and given us the benefit of his wisdom during the passage of the Act, because we have lost four or five years; but I accept his conversion with good grace.
The right hon. Member for Epsom and Ewell (Sir A. Hamilton) is not in his seat—although I think he poked his head in a little earlier—but I recall his arguments early in the Committee's life about whether intelligence should be a free good. [Interruption.] I apologise to the right hon. Gentleman, who is present after all.
I was impressed when I first joined the Committee by the range of the work that the intelligence agencies undertook, which is used by other Government Departments in pursuit of their functions. The right hon. Gentleman rightly asked whether such work could be done by other people more efficiently, and we had lengthy debates about the issue. I pay tribute to the right hon. Gentleman and his colleagues, some of whom have lost their seats, for the work they did.
The Committee started from scratch, and even now is still involved in a learning process. Our work load is so heavy that we have had to divide the responsibilities. I know that other colleagues will speak about specific issues, but I wish to make the point about the Committee's evolution because I have been involved from the beginning. I have been especially concerned about changes in priorities, given recent geopolitical changes.
The development of new priorities, and a change of emphasis in the work of the Committee since the end of the cold war, has made it content that the agencies should operate within the general parameters of the law with proper accountability and warranting. During our discussions in the Standing Committee that considered the Bill, in which we had considerable help from John Wadham and Liberty, we covered the peculiar area of warranting. We considered actions that might be illegal and for which, in certain circumstances, a warrant might be required. The Committee was satisfied by its dealing with the heads of the services that the agencies act circumspectly in those circumstances.
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My final point concerns defectors and dissatisfied people, a matter of long discussion in the Committee, to which I am sure some of my colleagues will wish to refer. The Foreign Secretary and the Chairman of the Committee were quite right to emphasise that chequebook treason—there are no other words for it—is prevalent today.
One person wrote to a newspaper to say that we had not sought to protect whistleblowers, like himself, who spoke out in the public interest. I am wary of those who claim to be whistleblowers in the public interest, but who accept £80,000 or £100,000 or a contract to write a book. If they are speaking in the public interest, let them not go into the marketplace to sell their souls and their country's secrets for money.
If the individual to whom I have referred had wanted to speak purely for the love of country, there are mechanisms by which he could have done so. I accept that the mechanisms are not perfect, and the Committee has considered that point. We have suggested industrial tribunals. Perhaps the Home Secretary would consider the whole structure of the security commissioner and the bodies that exist in this area. Perhaps they need modernisation to meet changing aspects of chequebook treason. We must bring the mechanisms up to date. If people want to act in the public interest, they need not accept money for it.
It will not always be possible to prevent treachery or betrayal of national security. It will not always be possible to prevent jeopardising the lives of colleagues, agents who are operating in dangerous situations. The Committee's responsibility is to set up systems to allow people to have, for whatever reason—a defect in their personalities, perhaps, or simply the fact that they cannot cope with the job into which they have been recruited—a sympathetic hearing outside the agency. That would allow them to feel that they could do something. If we can set up such systems, we shall have a better overall system of oversight and accountability.
6.2 pm
Mr. A. J. Beith: I join other speakers in paying tribute to the work of the right hon. Member for Bridgwater (Mr. King), the Chairman of the Committee, and to the staff of the agencies for their work. Some of that work is courageous, and some shows outstanding skill and dedication. Much is extremely valuable, done with commitment to the welfare of the whole community, and often with a full awareness of values that matter to me, such as civil rights and liberty. Many employees of the agencies are fully aware of those values, which form a part of their own thinking.
There is no doubt about the need for and the value of intelligence, if it is well used. I say, "well used", because an awful lot of money and intelligence has been wasted over the years. One need think only of the years running up to the Falklands war to realise that effort can be wasted and intelligence not properly used. If used properly, intelligence saves lives, prevents acts of war or terrorism and arms us against the dangers of those acts. It helps us to catch highly dangerous terrorists and criminals. It can prevent costly errors.
Threats continue, even though the cold war is over. Espionage continues among those who have traditionally practised it—including Russia. Instability in parts of the

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former Soviet Union is worrying. A proliferation of nuclear and biological capacity has resulted partly from the break-up of the Soviet Union, and partly for other reasons. British troops find themselves in extremely dangerous situations, in which they deserve intelligence support. Drugs and crime on an international scale are issues on which the agencies can make a valuable contribution, although they are not the bodies primarily responsible for dealing with those problems. The threats of information warfare are serious. There is always a continuing threat of betrayal of our defensive capacity.
To Liberal Democrats, the world of intelligence is by nature both important and challenging. Intelligence protects civil rights about which we care. It also impinges seriously on those rights, using methods that deny some element of civil rights such as invasion of privacy. It permits Governments to undertake actions and policies without public knowledge. It may allow actions to be taken which, if widely known and discussed, would not have public approval.
Secrecy can allow agencies to pursue their own agendas independently of Government, perhaps because of excess of zeal or because of partisanship within an organisation—the charge levelled against MI5 during the Peter Wright controversy. MI5 has a legal position different from that of other agencies, because it is not merely tasked, but makes its own judgments about what the threats to the state are.
Most of the charges were based on a much more heavy-handed approach to matters of domestic subversion than is contemplated nowadays. They are part of history more than of the present, as the law specifically precludes the agency from acting in the furtherance of the interests of any political party. The situation has changed significantly since those allegations were made, although the possibility exists nevertheless.
In secret, inefficiency can flourish and resources can be wasted. We must find a way to scrutinise the service without destroying secrecy. That is difficult. In some areas of operation, to disclose the existence of an activity is to make that activity's continuance impossible. I do not see why an individual whistleblower or a member of a committee should take it upon himself or herself to decide that an activity is unacceptable and should be ended, and to make an announcement or put a story in a newspaper. Such a decision must be taken by more than one person, and we need a means at every level by which actions may be tested by a range of people with possibly differing opinions. Our current mechanism is a genuine and valuable attempt at that.
While on the subject of secrecy, I want to ask one question. Is there an unnecessary culture of secrecy, and does the secrecy go too far? Certainly, that has been so in the past. The existence of the agencies was once denied, as other hon. Members have said. While we pretended that we did not have an intelligence service, the Russians knew perfectly well that we did, and they knew all its principal managers, too. People wrote books about the agencies. There were factual books and fiction: often there was more fact in the fiction, mainly because some of it was written by ex-employees of the agencies. It was absurd that we pretended that these organisations did not exist.
The culture has changed, partly under the impetus of cases and anticipated cases under the European convention on human rights. It is welcome that we now
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recognise the existence of the agencies, and that they must be scrutinised, but the Committee had to show that it can be taken into the agencies' confidence. The Committee has shown that it does not leak. Former members of agency staff, and even ex-Ministers, have done more to leak the work of the agencies than anything done by the Committee.
The culture of secrecy owes more to a desire to protect sources in dangerous circumstances than it does to an instinctive wish not to have people knowing about the agencies' work. The idea that, "Your identity is safe with the British," is a valuable byword in the difficult world of intelligence gathering. The Ames case, in which many American agents were compromised and met an awful fate—thankfully, no British agents did—explains the obsession with secrecy that sometimes goes beyond what most would think sensible. It is a way of communicating to those who might help this country, in dangerous situations, that their secret is safe with us. One can understand that, but it cannot be an absolute bar to mechanisms of effective scrutiny, or to the public knowing things that it is reasonable they should know.
Is the present formula right, of a Committee of parliamentarians within the ring of secrecy reporting to Parliament through the Prime Minister? We have always advocated a specially chosen parliamentary Select Committee, possibly a Joint Committee of both Houses. The present Committee is a Joint Committee with only one representative from the upper House.
It remains our objective to obtain a body that is a Select Committee of this House, but it can never be the same as other Select Committees. I have advocated that for many years, first in a lecture in 1968. I took part in debates, and introduced motions, in favour of some such committee structure in the 1970s, 1980s and 1990s. The Liberal-Social Democratic party alliance tabled an Opposition day motion in favour of such a committee in 1986. It took an awful long time to get to where we are. In 1986, I said that existing Select Committees
"clearly cannot be the exact model for a body that must operate in a much more restricted way."—[Official Report, 3 December 1986; Vol. 106, c. 985.]
If we moved immediately to a Select Committee, what advantage would we gain? The main issues are direct reporting to Parliament and the ability to call for persons and papers. If it was a Select Committee that reported directly to Parliament, I do not think that there would be a significant difference from what happens now.
The Committee's reports come before Parliament formally with deletions. Such deletions would have to be made by some mechanism, even if they did not go through the Prime Minister. The Prime Minister is forced to pay attention to the parts of the report that are not published as well as to those that are. It is open to the Committee to report to the Prime Minister on an issue on which it cannot report to Parliament at all, because every aspect of it requires the protection of secrecy.
I am not sure that any great gain would be made in respect of reporting to Parliament, but what about the power over persons and papers? If a Select Committee was carrying out the role, the same arguments that confront many such Committees would be encountered, but more often. The authorities would have recourse to

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the argument that something was "advice to Ministers" or that there were "operational reasons". One or other would be used frequently.
The mechanism suggested in the report, adding an investigative capacity to the existing Committee, is likely to take us further forward, at least in the short term, than an immediate move to a Select Committee. Indeed, I think that we would take a step backwards in the short term if we were to move to one now.
I say that without prejudice to the possibilities of getting to that destination in future. The confidence that has been built; the fact that we do not need a legislative change—or even a change to the House's Standing Orders—to take the steps advocated in the report; and the Government's favourable response lead me to believe that, if the objective is immediately to get more effective scrutiny, we will serve it better if we get on with that task now and leave the Select Committee issue for a later date.
The investigative capacity is important, because it is not possible to deny some of the assertions put to the Committee, or give firm reassurance that all is well on some matters, without being able to check the papers fully. Such a capacity is not foreign to our system. The commissioners who review the carrying out and issuing of warrants for interception have such a capacity. It has caused no problems. They make judgments based on careful review of the detailed papers. There are no barriers to their examining papers, and one has greater confidence in their judgment because of it.
I shall briefly consider Government communications headquarters at Cheltenham, though my hon. Friend the Member for Cheltenham (Mr. Jones) will understandably seek to catch your eye, Mr. Deputy Speaker, not least because many of his constituents are employed there.
GCHQ is an important place for Cheltenham. I hope that it can stay there, where it has such strong community support and is closer to the homes of the thousands who work there than any other site would be. I share my hon. Friend's welcome for the Government's reversal of the ban on trade unions. The ban put GCHQ on the front pages of newspapers all over the world—not a sensible thing to do with a sensitive institution that likes to get on with its work with the minimum of publicity. The decision backfired dreadfully on the Government who took it, and on the country's interests.
I intervened on the Foreign Secretary to point out that it is ludicrous that, at the time of the biggest ever GCHQ investment decision, there were four directors. None was removed for incompetence—they retired or were promoted. What business, confronted with such a major investment, would do that at such a stage? That suggests to me that the Government's promotion policy, of grabbing whoever it can for whatever job, without regard to the institutions they are managing, is not sensible.
On warrants, I remain of the view that giving authority for interception of communications and intrusion into people's property and private lives should be a task for a judicial or independent body, not a Minister. The sanction for such intrusion is more appropriately given by someone who is not part of the Executive and does not have Executive responsibility. We have accepted that principle, and fought for it, in respect of the use of such powers by the police. In the closing days of the previous Parliament,
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a fierce battle took place. My right hon. and hon. Friends in both Houses can claim credit for insisting on a judicial form of examination of authority for warrants for such intrusions.
The long-established system for the Security Service and the intelligence service is that Secretaries of State give the permission. I know what care they attach to that, how they examine cases individually and do not delegate. The Committee examined them very thoroughly on the matter. However, the final process of approval should have an independent judicial element: a review not merely of the process as a whole, as happens now, but of the decisions when they are made. That is the practice in many other countries.
I have two concerns on files. First, there should be more protection for individuals on whom files may be held. The Committee says in its report that it wishes to do more work on that. It is a serious matter, but I hope that concern will be less fevered, because there is no longer a practice or policy in the Security Service of investigating broadly political subversion as it was viewed in earlier decades, when persons present became the subject of files. Nevertheless, it is a matter of such importance that we should seek ways of getting more protection.
Secondly, the Government are plain wrong in their response to the proposal for independent review of files that are to be destroyed. They are records of how the service operated, and may have individual liberty implications. In their otherwise constructive response to the Committee's report, the Government state:
"the Government does not believe that the process of reviewing files for destruction would be assisted by independent scrutiny."
Their argument is that it would not be appropriate because
"it would involve second guessing decisions that the Service is required to make".
That is not true. It is not second-guessing the service's operational decisions but deciding whether a file on a decision that the service made years ago should continue to exist, the service having decided that it has no further need of it. That is not second guessing, but a decision about an historical record which should be independently taken. The danger is that the service could, knowingly or unknowingly, destroy evidence that would demonstrate both the good and the bad things about its previous work, which would be wrong.
I draw my final comment from the report of a royal commission set up in Canada, which published a report in 1981 on "Freedom and Security under the Law", setting out the principles that should govern the Canadian security service. Four of the five principles that it set out were that the rule of law must be paramount; that the means of investigation must be proportionate to the gravity of the threat; that the need for investigative techniques must be weighed against the damage that they might do to personal freedom and privacy; and that, the more intrusive the technique, the higher should be the authority to authorise its use. Those are good principles. By and large, they are practised in our three agencies, but they could be written in larger and brighter letters, or incorporated into the agencies' mission statements.
The use of intrusive methods should be limited to special or overriding circumstances. The carrying out of operations of which only a few people are aware can be justified only in exceptional circumstances. The

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mechanisms by which those matters are examined should be equal to the difficult task, in terms of both oversight and how the Executive handles them. Such principles could usefully be added to the vocabulary of statements that govern our services. The rule of law should be paramount; the means should be proportional to the gravity of the threat; we should weigh the techniques that we use against the damage that they might do to freedom and privacy; and, the more intrusive the technique, the more carefully it should be scrutinised.
6.21 pm
Mr. Chris Mullin: I welcome this debate, which is another small step towards rendering our intelligence and security services democratically accountable, and I look forward to its becoming an annual event. I also welcome the gradual removal of some of the unnecessary mystery that has surrounded those organisations in the past, particularly the detailed statement on 29 July by my right hon. Friend the Home Secretary on the number and status of the files held by the Security Service. One must pinch oneself to recall that my right hon. Friend was once identified as a potential subversive and was once, as the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) said, the subject of such a file. It must be satisfying now to find himself in charge of the Security Service—a responsibility that he takes very seriously.
I welcome the latest report from the Intelligence and Security Committee. It is a serious piece of work. May I make it clear that, although I am critical of the mechanism by which the security and intelligence services are accountable, nothing that I say should be read as a criticism of the right hon. Member for Bridgwater (Mr. King) and hon. Members on the committee, who were obviously working conscientiously within the powers available to them. People who serve on such committees sometimes have the distressing tendency to go native after a while. Parliament should be constantly on the alert for symptoms. I have been listening carefully to this afternoon's debate, in which one or two speeches occasionally strayed a little close to going native, but nobody could actually be accused of it thus far.
Today I shall address only one issue: whether the existing arrangements are the appropriate mechanism for rendering the security and intelligence services accountable in a mature democracy. For the avoidance of doubt, let me say at the outset that, provided that they are properly managed and accountable, the intelligence and security services have an important and legitimate function in a democracy. The difficulty has been that, until the advent of the ISC, no one outside the services had a clue as to whether they were properly managed. To put it mildly, such snippets of evidence as emerged from time to time did not inspire confidence. Political oversight was always a fiction in the past. It was always ludicrous to imagine that, with the best will in the world, the Home Secretary or Foreign Secretary, let alone the Prime Minister, had time to take a close interest in what the agencies got up to.
For the purposes of today's argument, however, I am prepared to accept that MI5, at least, has cleaned up its act in recent years. Some time ago, a former Conservative Home Secretary remarked to me that a great deal of dead wood had been cleared out since the scandals of the 1970s and early 1980s. I was glad to hear that because
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there was certainly no shortage of dead wood. I am less sure about MI6. I may be wrong and I make no allegations, but it is hard to believe that MI6 had no hand in reinstating the regime in Sierra Leone, which is now busily murdering its enemies. If I am right, one cannot help wondering who authorised it, as it does not seem to have been the Foreign Secretary.
If the public are to have confidence in the security services, it is important first to be certain that they are protecting democracy rather than attempting to subvert it, as they have done in the past. Secondly, we must be confident that we are getting value for the considerable sum—currently some £700 million; I hope that no more is hidden away in other budgets—that taxpayers contribute to the upkeep of the Security Service. We want reassurance that that expenditure is all strictly necessary, especially given that the cold war has ended and, with it, a considerable part of the services' reasons for existence.
It was an unlucky coincidence that, just as the Berlin wall fell, both the Secret Intelligence Service and the Security Service moved into lavish new headquarters on either side of the River Thames. Furthermore, if the war in Ireland is over—I appreciate that it is much too early to say yet—another large part of their work load will disappear. In such circumstances, there should be scope for a little downsizing, to use a phrase that is popular in the City of London.
I am glad to see from figures published in the report that some savings have already been made. There is always the danger that the agencies will invent new tasks, or expand into areas into which they should not expand, in order to make work for otherwise idle hands.
Mr. Rogers: My hon. Friend has made some fairly sweeping statements without giving illustrations. Would he care to give us some to support his generalisations?
Mr. Mullin: I am not sure what my hon. Friend is referring to, but if it is expansion into other areas, I suppose that one possibility is expansion into serious crime. It only requires vigilance; I am not making a big deal of it. In 1996, I served on the Committee that considered that authorised that expansion, and the authorisation was very general. The crime that the service was, in theory, allowed to become involved in investigating was not all that serious, but I am sure that what it actually investigates is, and that the number of officials involved is relatively small.
Mr. Rogers rose—
Mr. Mullin: I am sorry, but other hon. Members want to speak this afternoon. My hon. Friend asked me to offer an illustration. My response is simply to say that the authorisation in the Bill was a little general.
Public confidence requires rigorous scrutiny, and it is Parliament's job to provide it. The question is: do we have it? As I have made clear, I do not wish to cast aspersions on the right hon. Member for Bridgwater and his colleagues, who are doing as good a job as we could hope for with the powers that they have been given. However, are those powers adequate, and is the relationship with the agencies correct? Reading between the lines of the ISC's report, and having listened to what the right hon. Member for Bridgwater said, I see that the Committee itself

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appears to have doubts. For example, at paragraph 58, it says that it cannot express a view on the effectiveness of the commissioners and tribunals
"since we have not had access to the material to enable any judgment to be made."
At paragraph 65, the Committee says that it has not yet formed a view on whether its existing status is adequate. I was glad to note that, in a section headed "Further evolution of the UK oversight structure", the possibility of changing the Committee's remit in due course was left open.
I welcome all that. As the right hon. Member for Berwick-upon-Tweed (Mr. Beith), said, it is an evolutionary process, and we are all learning as we go along. For what it is worth, it is my firm view that the Committee's existing powers are inadequate. It is a fundamental principle in a democracy that those who spend public money and exercise power should account to an elected Parliament. The Select Committee system ensures that the work of every Department is scrutinised by Members of Parliament, who are, in theory at least, appointed by Parliament, and can be removed only by Parliament. Each Committee employs its own staff, and each has the power to summon people and papers as it sees fit. Although that power rarely needs to be used, it defines the relationship between a Committee and the Department whose activities it is responsible for scrutinising.
The relationship between the Intelligence and Security Committee and those whom it is supposed to scrutinise is entirely different. First, this Committee's members are appointed not by Parliament but by the Prime Minister, who can remove or fail to reappoint them as he sees fit. Secondly, it does not employ staff of its own, but it is serviced entirely by officials in the employ of the Government. Thirdly, it has no power to summon people or papers; it must take what it is given. How can there be effective scrutiny when the body that it supposed to be the subject of such scrutiny can ultimately decide what will and what will not be disclosed?
I realise that some will protest—indeed, I have heard several people say this during the debate—that everything is working smoothly so far. That may well be so, but the new arrangements have never really been tested. We have not yet experienced a crisis: we have not had a Zinoviev letter, an operation Clockwork Orange, a "Spycatcher" or a miners' strike. In any event, we may have to wait for years before some disaffected ex-employee of one of the agencies reveals that things were not going quite as smoothly as we all thought at the time.
It is essential to get the mechanism right at the outset. After that, everything else will fall into place. I firmly believe that the ISC should be a Committee of Parliament, appointed by Parliament, with the same powers and facilities as a Select Committee. That is the only way to create public confidence in the integrity of the security services. When the right hon. Member for Berwick-upon-Tweed asked what the Committee needed, one thing that he did not mention was public confidence. I am referring not just to what is actually happening, but to its perception in the world outside. I do not think that the importance of that should be overlooked. There would, of course, have to be special arrangements recognising the need for secrecy and security, but that is not an insuperable problem, and should not be used as an excuse for doing nothing.
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I might add—others have mentioned this—that, until not so long ago, my view was the official Labour party view. Like my hon. Friend the Member for Rhondda (Mr. Rogers), I was a member of the Standing Committee that considered the Bill that became the Intelligence Services Act 1994, which set up the ISC. I vividly recall that, at that time, the position of our Front Benchers was that oversight of the security services should be the responsibility of a parliamentary Committee. I have a list of quotations from Labour spokesmen, some of whom are now senior members of the Government, espousing exactly the view that I am now advancing. I shall not embarrass anyone by reading out those quotations, although I am tempted to do so; but let it not be said that my view is held only by a small minority of extremists.
My point—and it is a matter of record—is that the security services have run rings around all previous Labour Governments. Past Labour—and, for all I know, Conservative—Home Secretaries, Foreign Secretaries and Prime Ministers have been systematically misled, and even spied on, by the very agencies of which they were supposed to be in charge. I do not allege that that is happening now, but the only way to be sure that it never happens again is to set up an effective system of parliamentary accountability—and that we do not yet have. Such a system is also in the interests of the security services, which will never entirely enjoy public confidence until they are properly accountable. If they are wise, they will not stand in the way of proper accountability.
As my right hon. Friend the Home Secretary is aware, the Home Affairs Committee has long taken an interest in the matter. Our first report on the accountability of the security services was published four years ago, under a previous management. In this Parliament, we have raised the matter with my right hon. Friend several times, and I am grateful to him for not ruling out the possibility of change. I urge him to keep the door open, for the issue will not go away for as long as the present inadequate arrangements obtain. I realise that the Government have other priorities for the time being; I only hope that we will not wait until some future scandal makes change inevitable.
6.34 pm
Mr. David Davis: I, too, praise the agencies that the ISC oversees. They have done a great deal in the past to defend the country's freedoms and civil rights, and, no doubt, will have to do the same job equally effectively in the future.
I did not intend to comment specifically on the committee's work, but I want to respond to what was said by the Chairman of the Home Affairs Committee. I have considerable respect for him, but in this instance I think that he is wrong. I was one of the Ministers who brought the committee into being when the Bill that became the 1994 Act was going through its stages, I have been a customer of the agencies in the past, as a Minister, and—somewhat unusually—I have even appeared before the Committee. I can testify that it was not a comfortable or an easy process, but a process that demonstrated that the Committee was after the truth, and, in the widest sense, concerned with the country's interests.
I am very much in favour of what has happened so far. I compliment the Committee on its operations and, in particular, the effectiveness of its Chairman, my right hon.

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Friend the Member for Bridgwater (Mr. King), during its first four years. I support the arguments put by my right hon. Friend and the Committee's members, including the right hon. Member for Berwick-upon-Tweed (Mr. Beith), recommending the committee's development through its investigative capability. I feel that such progress would have no down side and a considerable up side, and would add to a public confidence that is already well established.
What I want to say is narrow in scope. It relates principally to points raised about the National Audit Office and its actions in support of the Committee. As such, it will be dull in comparison with the Hollywood, not to say James Bond, references of the Foreign Secretary—although, by the standards of the auditing profession, it will be unbearably exciting.
On page 10 of its report, in paragraph 21, the Committee says:
"We were told … that no value for money project work in respect of the Agencies had been carried out over the past few years".
That, although accurate, gives a slightly unfair impression. The financial audit of what are, effectively, the public accounts of the agencies dates back only to 1995, and it is the financial audit that often provides the understanding, insight and, indeed, intelligence to make a good value-for-money exercise possible. It takes a little while for that to develop. There is also a problem of limitations on capacity to which I shall return shortly.
On page 11, in paragraph 23, the Committee says—and I wholeheartedly agree—that
"there should be a specific obligation on the Agencies to inform the NAO"—
the National Audit Office—
"of material items of expenditure";
and that
"the arrangements for the disclosure of information by SIS, approved by the Foreign and Commonwealth Secretary, should be brought as far as possible into line with those of the Security Service, specifically in providing for the C&AG to be given the reasons for any refusal to provide him with information".
I consider that a wise proposal. Although it is pretty technical at this stage, because there has been no such occurrence, it will be useful in the future.
In the same paragraph, the committee states that
"in view of our own statutory responsibility to examine the Agencies' expenditure, formal provision should also be made for the disclosure of information and reports by the C&AG to this Committee, in consultation with the Chairman of the House of Commons Public Accounts Committee."
The Government accepted that, and I agree entirely with their proposal. As my right hon. Friend the Member for Bridgwater has said, we have had informal discussions on the matter.
We should not, however, have too high expectations of value-for-money studies. In intelligence and security matters, value for money is no magic wand. Normally, it depends on a determination of whether the maximum value has been obtained for the minimum cost. That means that we have to assess the value of what is produced. The "value" half of the equation is difficult to assess with intelligence and security. It is rather like research and development. Once, when I worked in that sector, I was told that some hits justify a lot of misses. The same rule applies here.
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What is more, the value of the information, even with a hit, is difficult to assess—even more difficult than in commerce. Take the example even of the apparently hard technical data that the agencies sometimes bring up. We know—certainly my right hon. Friend the Member for Bridgwater will know from previous experience—that, on occasion, we can demonstrate the saving of hundreds, even thousands, of lives in wars in living memory; so clearly value has been obtained there, value beyond price, but with narrow exceptions, even that sort of technical data depends on information about intentions or deployment.
I pose a hypothetical example to demonstrate my case. Let us imagine that the agencies find that a foreign power has a nuclear, biological or chemical missile system that is capable of attacking a British city. If we determine that there is an intention to use or to deploy it as a threat, that information is invaluable—again, valuable beyond price because it will save thousands or millions of lives—but if there is no intention to deploy or no clash of interest, it is interesting to us, but of little national value.
In these days of military stretch, decisions on soft data are necessary. We cannot make decisions that take into account every possible risk; we know that already. Also, in these days of international uncertainty, those decisions are, by definition, difficult and it may be impossible to demonstrate whether they are right for several decades afterwards.
Today, we could probably make a decent assessment of the intelligence gathered in the 1970s through to the early 1980s. I am not sure that we could make a proper assessment now of intelligence that was gathered between, let us say, 1985 and 1995, so it is difficult to assess the value of the information that we get. It is even more problematic in those areas—this happens quite commonly with the agencies—where soft data are used in judgments in conjunction with much other public data, or much other data obtained by normal means. That means that, for the National Audit Office's actions to help the Committee, value-for-money studies will tend to focus on cost control, on coming to the conclusion that we have obtained whatever it was that we wanted at the minimum possible cost, with no wastage; the very point that the Chairman of the Home Affairs Committee has made.
I have discussed this with the Comptroller and Auditor General. There are appropriate value-for-money studies that might deliver some useful information for the Committee—the House will understand if I do not elaborate on them—but I say as an aside that my right hon. Friend the Member for Bridgwater pointed out some of the problems that some agencies in other countries have had with excessive bureaucracy: a sort of sclerosis of the agencies involved. I would be wary of trying to second-guess absolutely everything that is done because we might then destroy the flair of the agencies.
Mr. Campbell-Savours: The right hon. Gentleman has an important role in these matters. It may be that a productive intelligence can be secured at a fraction of the cost simply by looking at open sources. The question that we have to ask ourselves is: how can we be absolutely

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sure that, in securing that intelligence, the cheapest means of securing it has been used? That is very much a matter for the National Audit Office.
Mr. Davis: I absolutely agree; that was my point about obtaining the intelligence at minimum cost. It is what I refer as to as the Mossad rule. The previous head of Mossad once commented that he was not going to spend Israeli taxpayers' money or risk the lives of his agents on obtaining things that were on the front page of Al-Ahram, the Arab newspaper. It is a well-taken point, but my point is that that is not strictly a value-for money exercise; it is a cost-effectiveness exercise.
There is one other area of value for money that might deliver significantly more than what I have discussed already: comparison with other allied services abroad. That would require international agreement, but I could think of three or four other services that might be interested. However, such an idea, if it were possible—and I do not know whether it is—would require a separately financed exercise.
I say that because it is not the entire National Audit Office that is engaged in this process. By definition, this is a process that uses a small cadre of the NAO—those who are cleared to the level necessary. To extend that cadre would be expensive and would need funding.
In this assessment process, the tasking of the agencies is important. Crisp, clear tasking leads to sharp and effective operational management and facilitates after-the-event evaluation. Soft or tardy tasking makes it harder, and occasionally impossible, for the agencies to act.
The Liberal Democrat spokesman referred to the Falkland Islands war. I refer the House to paragraph 311 of the Franks report, which points out only too clearly that late tasking created problems for the intelligence assessment there—as it turned out, the tasking change was too late because it was only six months before the operation.
Effective and clear tasking allows good management. It also makes it possible to devise and measure cost-effective delivery—the very point that the hon. Member for Workington (Mr. Campbell-Savours) raised—in which process the NAO will play its part in helping the agencies and the Committee to do their job: to protect this nation and defeat the enemies of the realm.
6.46 pm
Yvette Cooper: The Intelligence and Security Committee report is broad in scope. I want to concentrate on only two issues—oversight and personal files—while joining in the tributes by other hon. Members to members of the agencies, who work hard on our behalf and are frequently unrecognised.
In the 1994 Richard Dimbleby lecture, Stella Rimington, former Director-General of the Security Service, said:
"Accountability lies at the heart of the tension between liberty and security".
She could just as easily have said "between democracy and secrecy", because democracy holds that we must hold public organisations openly to account, while good intelligence saves lives; secrecy saves lives.
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Inevitably, we cannot hold our secret agencies to account by the public, press and Parliament in the ordinary way, but that is all the more reason why those who are charged with oversight and who have responsibility to look into what the secret agencies are doing really have the power to do the job properly on behalf of everyone else. There are gaps in our system of oversight—in particular, in the ISC's access to information about what the secret agencies do.
At the moment, information is provided by agency chiefs and by Ministers at their discretion, which raises a difficult point: how can we have proper oversight if the very people whom we are supposed to be overseeing are determining what information we get? That severely jeopardises the Committee's ability to pronounce with authority on important intelligence issues. Credibility demands knowledge and knowledge demands the power to verify—the power to check what is going on. Until now, the ISC has not had that power, and that reduces its credibility in the public mind, as well as in Parliament's mind.
None of that means that I suspect the agencies of any wrongdoing; it means simply that we on the Committee lack the ability to pronounce with confidence that all is well. We cannot come to the House, put our hands on our hearts and say that all is well, because we do not have the power to know.
A good oversight committee will never be able to answer all the questions that are raised by hon. Members about the secret agencies or their work. It may never be able to answer questions about all the issues that it is investigating. That is inevitable. However, colleagues in the House should be able to feel confident that someone is investigating issues on their behalf and has the power to do the job properly, even if ordinary Members of Parliament are not able to get the answers themselves. At the moment, colleagues cannot do that, but they should be able to do so. It is possible, without jeopardising national security or secrets that we need to keep, to move to a better system of accountability. That is why the ISC's investigative arm is so crucial. It is worth thinking through the objections and the likely objections, because we must make the investigative arm work in practice. Although there has been a great deal of positive discussion today about that investigative arm, we have not yet made it work in practice.
The first objection that people raise is that a security risk is involved—that information that the Committee demands may jeopardise the lives of agents or threaten the security of sensitive operations. That does not fit with the facts. We should consider the experience of other countries. The German oversight committee has the power to call for papers and for people to testify before it. In the United States, the congressional intelligence committees have a right of access to all the information that they require. So, too, does the Canadian oversight committee, the Security Intelligence Review Committee. Those committees do not leak. When we visited them, the agencies and the committees told us that, with just one exception, there had been no security breaches from their oversight committees.
There is also a precedent in the United Kingdom as the commissioners have full access to information. They have full access to all the files that they want to see and anything else that they want to look at to do their

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job. If commissioners for the agencies can be trusted not to abuse their power, surely a group of politicians should be trusted to do exactly the same.
The second objection, and I have heard this raised, is that the existing system of accountability is already adequate—that the ISC may have limited powers, but there are also commissioners and tribunals. It is argued that agency chiefs answer to Ministers and Ministers answer to Parliament and that a complicated system of accountability is in place. The problem with that argument is that it does not stack up to an adequate system of accountability. It simply is not acceptable in a modern democracy for the agencies to be answerable only to the Executive, especially given their growing technical power to invade people's privacy and look into their lives. Where they have so much power, they must, for the sake of public confidence, also be answerable to Parliament.
Ministers must also answer to Parliament for their security decisions. The ordinary process of ministerial accountability to Parliament will never work for security issues. We cannot have Ministers at the Dispatch Box answering parliamentary questions on security issues, and we would be horrified if such a system were ever to start. However, in the absence of that, we must have a credible and powerful system of parliamentary oversight, even if that cannot be done by the whole House. Without some sort of Committee, neither Ministers nor agencies will be properly accountable for their decisions.
Colleagues have argued that we should go further and set up a Select Committee. I think that that would be a good idea, but we must remember that such a change would not of itself magically solve the problem of access to information, which is the issue at the heart of the debate. Existing Select Committees are routinely denied information on the ground of national security. The Canadian oversight committee is not a parliamentary committee, but it is more credible than Britain's ISC because it has greater access to information and can act as an independent check on what the agencies are doing.
There is an issue surrounding the lack of independent checks in Britain that goes far wider than the ISC and accountability to Parliament. It is about the principle of external independent checks on organisations that have had a long tradition of self-regulation. At the moment, agency chiefs report directly to Ministers, but the secret agencies' tradition of autonomy and self-regulation means that that is often the sole point of Executive accountability, as Ministers and their civil servants rarely go beyond the agencies' doors. Commissioners check whether it was legal for Ministers to sign a particular warrant, but who outside the agencies checks whether operations are actually carried out in accordance with those warrants? Who checks whether operations are well managed? Who outside the agencies checks the wider issue of compliance with the law?
Obviously, we cannot have a system under which absolutely everything that the agencies do is checked in that way, but who outside the agencies checks any of it? In principle, the commissioners could do that, but as Lord Justice Stuart-Smith made clear in his annual report this year:
"It is not my function to review operations."
I hope that Ministers will consider the tradition of self-regulation of secret agencies, because I believe that it is out of date. That applies not only to secret agencies,
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but to any organisation operating in the modern world. It is not a criticism of the secret agencies; it is simply an argument for proper independent checks that can improve efficiency and act as a spur to improvements. After all, my right hon. Friend the Secretary of State for Education and Employment does not rely on self-regulation for schools; he sends in the Office for Standards in Education. My right hon. Friend the Secretary of State for Health today argued for an independent external audit for doctors. The US, Canada and Australia have inspectors-general to fulfil that function in their secret agencies. It is something that the Committee has said it will consider further, but Ministers should pursue in more detail the issue of Executive oversight.
Of course, it is vital that such checks do not become over-bureaucratic, but it is possible to have effective independent checks that work for the benefit of the secret agencies and make them better able to perform their functions for the sake of all of us. Such a system is not just in the interests of democracy; it is in the interests of the agencies themselves. A credible oversight system would give them more cover. It would give the ISC the ability to defend them, to take some of the flak and to object to some of the more ludicrous allegations that will inevitably arise and will not go away, no matter what sort of oversight system we have.
I want briefly to raise the question of personal files—in particular, the destruction of the old subversive files, where the same principle of independent checks applies. The ISC has argued that there should be an independent check on those files that the Security Service has decided it does not want any more and should be destroyed. It appears that the Government have rejected that recommendation and I strongly urge Ministers to reconsider. If the only objection to independent checks is that they are too bureaucratic, we should keep all the files. They should be put in a vault or microfiched; we must not destroy those old subversive files for good simply on the say-so of the Security Service.
The Government's response states:
"the decision to retain or destroy a file must be an operational one."
However, that is only part of the story. I accept that only the Security Service can make the operational decision whether it still needs to retain a file and continue to use it, but, once the service has decided that it does not need it, there is an historical—not operational—decision to be made. History is not an operational decision. There is absolutely no reason why only the Security Service should be capable of deciding whether something has historical significance for the future. In fact, for the sake of the credibility of history, someone other than the Security Service should make that decision.
It is controversial stuff. We have all heard the allegations about the monitoring of so-called subversives in the 1970s and 1980s. For all I know, none of it may have happened. On the other hand, all sorts of outrageous things may have happened. The point is that future generations have a right to know what happened and how the organs of the state behaved. They have a right to be able to learn from that and to know that what they are looking at is the entire record. They need to be confident about that. For the sake of credibility, it should not be the Security Service that decides that. Future historians should never be able to say that the service was given a licence to write its own history.

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There are all sorts of other issues about individuals' rights to see their files if the Security Service has decided that they are now redundant and should be closed. It is too difficult an argument to go into in detail tonight; it is a matter to which the Committee has said it will return. Important issues are involved—files that the Security Service has decided are redundant should not be destroyed without there being at least some consideration of whether it is possible to consult the individual involved on what should happen to his or her files.
I welcome today's debate. We have certainly come a long way since the mere existence of MI5 and MI6 was denied. I believe that, sooner or later, we will travel much further. We will have to improve our system of accountability, for the sake not only of democracy but of the very secret agencies that the United Kingdom needs to function and to protect our modern democracy. If we do not improve our system of accountability, those agencies' capacity to operate in the national interest will be threatened.
7.9 pm
Mr. Nigel Jones: I am delighted to be called to speak in this important debate. As hon. Members have already said, the headquarters of GCHQ is in my Cheltenham constituency. Moreover, it is the town's largest and most important employer.
Since implementation of the Intelligence Services Act 1994—I served on the Standing Committee that
scrutinised that Bill—the Intelligence and Security Committee has made regular visits to Cheltenham to visit GCHQ. I pay tribute to the work being done by the Committee, and echo Committee members' tributes to the dedicated personnel working in our intelligence and security services, especially at GCHQ.
I wish to speak primarily to paragraph 8 of the Committee's report. However, I should like first to mention the now-ended ban on trade unions, which has been. mentioned already in the debate by the Foreign Secretary and other hon. Members. Once again, I thank the Foreign Secretary and the Government for ending the trade union ban at GCHQ, thereby ending a disgraceful episode in which the loyalty of dedicated employees was questioned.
Each January while the ban was still in operation, on the anniversary of its imposition, trade unionists, Members of both Houses of Parliament and ordinary, decent citizens used to meet in Cheltenham to march through the town to protest against the ban. Since I was first elected to the House, in 1992, I have marched shoulder to shoulder with campaigners to end the ban. For five years, I had the privilege of addressing great rallies, at one of which I shared the platform with the late John Smith. Four great party leaders have shown solidarity in redressing the great wrong of the ban—John Smith, Neil Kinnock, Lord Steel of Aikwood and my right hon. Friend the Member for Yeovil (Mr. Ashdown).
We met to support especially each and every one of the 14 loyal trade unionists who were sacked from GCHQ for sticking to their principles and wishing to belong to a trade union. Many of those 14 are my constituents, and they are very special constituents. They are Mike Grindley, Graham Hughes, Brian Johnson, Alan Rowland,
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Gerry O'Hagan, Dee Goddard, Bill Bickham, Alan Chambers, John Cook, Clive Lloyd—a distinguished local councillor—Roy Taylor, Barry Underwood, Gareth Morris and Robin Smith.
Of the 14, 13 were involved in supporting our armed forces during the Falklands conflict, and every one of them was positively vetted. The previous Government claimed that they were a threat to Britain's security, although they did not make that claim when those people were working their socks off helping our troops in a war and providing crucial, round-the-clock support in hugely difficult conditions. The previous Government also did not make that claim at the end of the conflict, when they honoured those people.
The ban on trade unions was a shabby act, and the new Government have put it right. Mike Grindley, Clive Lloyd and their friends—all 14 of the trade unionists—are about as subversive as a bunch of bananas. I thank the Government for keeping their promise to remove the ban on trade unionists at GCHQ.
Hon. Members will know that the previous Government decided to proceed, under the private finance initiative, with new accommodation for GCHQ. The remit was to consolidate GCHQ on a single site, and there were three options—to consolidate on one or other of the existing two sites, at Oakley or Benhall, in Cheltenham, or to build on a new site within the Cheltenham, Gloucester and Tewkesbury triangle. Soon after taking office, the new Government confirmed their intention of proceeding with that PFI, to the surprise of many people, including me. I must admit that I am still not convinced that using a PFI is a good idea in a service that is as vital to national and international security as GCHQ. However, the argument is over, and the PFI will proceed.
The local community has felt left out of the decision-making process because of the confidential nature of the bidding process. Some of the consortiums bidding for the contract were better than others and tried to keep local people informed, whereas others were downright cowboys—although some of my constituents have used the expression "sharks". Rumours were rife, causing considerable alarm and anxiety to local residents, especially those living near GCHQ, Oakley. Local councillors and I did what we could to alleviate the concerns.
Sadly, however, some mischief makers seemed determined to undermine the chances of GCHQ remaining in Cheltenham. At one stage, I found it necessary to tell a journalist that the wild stories that were circulating were "pie in the sky" and would never happen. Fortunately, he used the expression in the headline of his article. Even more fortunately, my comments have proved to be correct. The director of GCHQ found it necessary to take the unprecedented action of writing to the local newspaper to try to calm the rising hysteria. It was a sorry chapter, which, fortunately, has now come to an end.
Last month, the Government announced that they had decided against building GCHQ's new accommodation at Oakley. I support that decision. The Oakley site was far too cramped, and the roads were not suitable to cope with a doubling of office traffic. Currently, during rush hours, queues build up, particularly along the A40 London road, at Sixways, in Charlton Kings, and on other roads leading to GCHQ, Oakley.

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The Government have announced also their decision on the successful consortium. GSL—which includes Tarmac, BT and Group 4—submitted an attractive circular design, with a central open courtyard, for the Benhall site in Cheltenham. On the land to be released—all of Oakley and part of Benhall—there are outline plans for a science park, perhaps a hospital, housing, retail facilities and a public centre. Needless to say, the circular design for the new accommodation has been christened "the GCHQ doughnut".
Unfortunately, when announcing the preferred developer, the Government did not announce the site. Instead, they have rather confused the issue by saying that the doughnut would be built either on the Benhall site or over at Brockworth, in the Gloucester business park, in the Tewkesbury parliamentary constituency. I should explain briefly why the Benhall option should be chosen. I should also like to urge the Government to make a decision quickly—today, if possible—to end speculation on the matter.
On the GCHQ PFI project, in paragraph 8 of its report, the Intelligence and Security Committee states:
"The challenge of ensuring no interruption to operating capabilities during this reorganisation is a daunting one, which will require the highest levels of management skill."
The Committee Chairman, the right hon. Member for Bridgwater (Mr. King), eloquently expressed the importance of that point.
The Government currently own land at Benhall that is within the GCHQ's boundaries, which will allow new accommodation to be built alongside existing offices. Therefore, there need be no interruption of or conflict with the vital work done there. Many talented employees working at GCHQ tell me that they wish to remain in Cheltenham. The vast majority live in or near the town. Visiting American security officers who occasionally visit Cheltenham have said that they think it is "unthinkable" that GCHQ should leave Cheltenham. Frankly, it would be disastrous if GCHQ left.
I have been told that GCHQ's work force is the equivalent of one quarter of Cheltenham's entire work force. Estimates show that, with the multiplier effect, GCHQ and its staff annually contribute more than £200 million to the town's economy. The people who work there contribute not only through their high street spending but in various other ways. They contribute to sports clubs and to voluntary and arts groups; some are school governors and a few are even local councillors. I was told last night that Cheltenham's Bach choir is made up mainly of GCHQ employees. If GCHQ moved out, property prices would fall, shops would close and many jobs would be lost.
There is also an important environmental reason for building the GCHQ doughnut at Benhall. A large majority of GCHQ personnel live in Cheltenham. If the new accommodation were built at Brockworth, the staff would need to travel to and from the new site every working day, many of them along busy and narrow roads. Hundreds, perhaps thousands, of extra vehicles would use the A46 through the delightful village of Shurdington. According to one estimate, an extra 5 million miles would need to be travelled each year.
I understand that, under the terms of their contracts, GCHQ employees would be reimbursed for up to three years for the additional costs of travel. I shall let hon. Members work out for themselves how much that would cost the taxpayer.
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The Government claim to be environmentally aware. Indeed, each Government Department has appointed a green Minister, and I support the thrust of that policy. I therefore find it impossible to believe that the Government are considering using taxpayers' money, which is always in short supply, to force GCHQ staff to waste their time travelling millions of extra miles to and from work, using non-renewable resources and adding to air pollution. How would that policy fit in with the Government's obligations under the Kyoto agreement? One of my constituents is the country's leading environmental campaigner, Jonathon Porritt. I discussed the issue with him last week, and he was horrified to hear what was being considered.
Another key point to bear in mind is that the people of Cheltenham, whom I have the honour and privilege to represent, want to continue the long and successful partnership between the town and this vital Government installation. I pay tribute to the councillors and officers of Cheltenham borough council who have bent over backwards to help GCHQ during the PFI process. On 12 October, the chairman of the council's policy and resources committee, Councillor David Lawrence, asked the council to approve a resolution welcoming
"the selection of GSL as the preferred developer"
and urging the Government to
"accept the Benhall option".
That motion was carried unanimously.
In order to gauge local opinion, I sent a letter and survey to thousands of people living near the Benhall site. I pointed out the importance of GCHQ and the fact that development would take place at the site whatever the decision over GCHQ. My office has received bucketfuls of responses, and 97 per cent. of the people responding want GCHQ at Benhall.
By contrast, the people of Brockworth say that they do not want GCHQ. Brockworth parish council chairman Jim Hunt is reported in the Gloucester Citizen as saying:
"I'm dead against it. It would be a horrible blot on me landscape".
Other councillors have also said that they do not want it. Councillor Mike Matthews said that traffic was a concern:
"We all know what the traffic is like now. It would be worse. There wouldn't be any jobs created for people in Brockworth".
Councillor Colin Gomersall said:
"There would be chaos on the roads. We said 'yes' to Gloucester Business Park because it would bring jobs to the locality but this is a dead duck."
Councillor Barry Morris said the council had been kept in the dark about the proposal. He added:
"I think we should write to Tewkesbury Borough Council to express our dismay mat we knew nothing about the prospect of GCHQ moving to Brockworth."
I understand from a constituent that the water table on the Brockworth site, formerly used by the Gloucester Aviation Company, is no more than a metre below the surface. He writes:
"The geology of the site reveals alluvial lias clays. These sub-soils have the ability to absorb large quantities of water, expanding to double or triple their size. The downside is that when they dry out they contract in similar proportions, from where they get the name 'shrinkable clays'.
Modern construction methods can overcome the worst effects of these clays on normal rectangular buildings, but it must be a major concern for the potential distortion of an annular form of the proposed doughnut."

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What my constituent is saying is that the Brockworth site is not suitable for a circular design like the GCHQ doughnut.
The decision for the Government should now be easy. The people of Cheltenham want GCHQ; Brockworth does not. The Benhall option in Cheltenham ties in with the Government's green agenda; Brockworth does not. The employees of GCHQ want to stay in Cheltenham; they do not want to waste time travelling to Brockworth. The Benhall site in Cheltenham is structurally sound for the circular design of the new GCHQ; Brockworth is not.
I urge the Government to announce, sooner rather than later, that Benhall is to be the home for a successful future for GCHQ.
7.15 pm
Mr. Dale Campbell-Savours: I warmly welcome this debate. I have been a member of the Intelligence and Security Committee for only 15 months. Before that appointment, I must confess to an underlying unease—a healthy scepticism—about the security services. Indeed, in the 1980s, I hunted with the hounds over the Wright affair and played my part in embarrassing the Government of the time.
Following my experience of the past 15 months, I feel greatly reassured. I have "been in", "seen much" and "pondered at length", and I am much reassured by what I found and by the conversations that I have had with people in the services. Some people might say that I was "going native"—a phrase used by my hon. Friend the Member for Sunderland, South (Mr. Mullin)—but I assure him that I am not. All members of the Committee observe the performance of others, and I do not think that my fellow Committee members could accuse me of going native. I would suggest to my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), the former Chairman of the Public Accounts Committee, that the nature of my questioning was little different from when I was on the PAC. My colleagues can be reassured that, along with others, I play my part.
I hope that the agencies are reassured by today's debate. In my view, they should welcome the report, as I do. It is an excellent report, especially in its reference to the investigative arm which, as my hon. Friend the Member for Pontefract and Castleford (Yvette Cooper) said, is critical to the workings of the Committee. The Committee needs teeth, and that is the route that we must take.
I must pay one or two tributes at the outset. I pay tribute to my hon. Friend the Member for Rother Valley (Mr. Barron) for his very important work on industrial relations, work that is of some historical significance. I also pay tribute to my hon. Friend the Member for Pontefract and Castleford for the excellent work that she did on files, and to the Chairman of our Committee, who I believe has been an excellent Chairman and who adds credibility to the work that we do. I mean that most sincerely.
I pay tribute to the service heads who have painstakingly set out to reassure the Committee within the terms of the legislation. I pay a special tribute to the work of agency personnel, whoever they are and wherever they are in the world. Their names I know not, but I would
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like them to know that their work and dedication have been an inspiration to members of the Committee as they carried out their duties. However, there is a hole in the way we work, and a big hole in the report, and that is the status of the Committee. I shall comment almost uniquely on that aspect of the debate.
I do not believe that oversight is fully credible while the Committee remains a creature of the Executive—and that is what it is. The problem at the moment is that the Committee considers its relationship with the Prime Minister more important to its operation than its relationship with Parliament. I strongly dissent from that view and find the arguments in favour of Select Committee status utterly overwhelming. So what are they?
First, we live on the threshold of an era in which our civil liberties and freedoms will be the subject of increasing pressure as the state strives to maintain collective responsibility. It is an exercise in which states throughout the world are involved. Curiously, closed circuit television adequately illustrates my point. Civil libertarians were hostile to its introduction. Now they simply talk of safeguards and regulation. The demands of society for protection against the excesses of criminal activity have crowded out arguments over the intrusion of camera surveillance on our lives. In such conditions, one has to be beef up systems of regulation, safeguard and oversight. Those systems need to command public support, confidence and trust. I do not believe that the ISC, despite the good intentions of its membership and the witnesses that come before it, as a creature of the Executive, can possibly meet those tests.
Secondly, the Committee needs new and increased powers to call persons and papers and to communicate with other Committees. There are times when the information that comes our way should, in certain circumstances, be referred to other Select Committees. It would enable them to carry out their inquiries. That does not mean that security will be in any way breached because mechanisms can be introduced to ensure that that does not happen for the release of material.
It is already acknowledged that the Committee needs the power to report directly to Parliament and the argument has been well rehearsed this evening. I believe that we need the power to take evidence under oath. Select Committees have that power, yet we do not. Without going into any details, it is fair to say that there are times when the Committee might receive assurances on issues where, if those assurances were given under oath, we might have the confidence—under present circumstances, with the approval of the Prime Minister—to make statements that would be extremely helpful during the course of public debate and in the exercise of reassuring the general public.
We need the power to take evidence under privilege. Technically, if a person appeared before the Committee today, he could libel another person because he would not be protected by privilege. The Committee has none of the powers that are accorded to witnesses giving evidence to parliamentary Committees.
Above all, the Committee should have the power to hold witnesses in contempt if they deliberately mislead the Committee—[Interruption.] Does the Chairman of the Committee wish to intervene? I see not. If Parliament knew that the Committee had the ability to take evidence

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under oath and to hold witnesses in contempt in the event that they were deliberately to mislead, it would substantially increase the credibility of any reassuring statement that the Committee makes.
The arguments are not new; they have been rehearsed at length on a number of occasions in the past, most notably during the passage of the 1989 and 1994 legislation. Those supporting Select Committee status included the noble Lord Hattersley, speaking from the Front Bench. If he catches your eye, Mr. Deputy Speaker, my hon. Friend the Member for Walsall, North (Mr. Winnick), intends to go into greater detail about what was said at the time. Other supporters included the noble Lord Randall, who also spoke from the Front Bench, and the Secretary of State for Trade and Industry, my right hon. Friend the Member for Hartlepool (Mr. Mandelson), as well as my hon. Friend the Member for Rhondda (Mr. Rogers), who in 1993 made a number of fascinating speeches that make most interesting reading. I hope that my hon. Friend the Member for Walsall, North will read them. The noble Lord Richard, speaking from the Front Bench in another place, and the Minister for the Cabinet Office, my right hon. Friend the Member for Copeland (Dr. Cunningham) also made positive speeches in favour of Select Committee status. Indeed, in 1989, the entire shadow Cabinet, including my right hon. Friends the Home Secretary and the Foreign Secretary, voted for Select Committee status. I have a copy of the Division list. The entire Labour membership of the Committee today that was in the House at the time all voted for Select Committee status, so we are not arguing new principles this evening.
Some say that legislation is required to accord Select Committee status, but that is not my understanding—a resolution of the House will suffice. We could establish a Select Committee to carry out fully the functions of the ISC by using existing arrangements within the House, simply carrying a resolution. Of course there would be a residual ISC in place by way of the legislation, but that would need to meet only once a year for five minutes to fulfil its function.
I recognise that there is strong opposition, which is to be found everywhere. Some argue that the fact that the Committee reports directly to the Prime Minister gives individual members of it additional clout, kudos, weight or importance in the political world. I strongly reject that view. Others argue that no way can be found to restructure the practices and procedures of the Select Committee so as to ensure Executive influence for reasons of national security over material that it may seek to publish. That is simply untrue. A resolution of the House could require that the Committee sought the approval of the appropriate agency before reporting to the House. The resolution could further provide that, in the event that a dispute arose between the agency and the Committee over the publication of information or evidence in a report to the House, the matter of the dispute could be referred to my right hon. Friend the Prime Minister for his decision and the Committee could be required to comply with the decision of the Prime Minister. If, in unforeseen circumstances, the Committee or any member of it were to threaten to breach the Committee's rules of procedure as approved by the House, it would always be open to the Leader of the House, on the instruction of the Prime
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Minister, to dissolve the entire Committee or remove any member of it on a resolution tabled on one day which took effect on the next. There are adequate provisions.
Mr. Rogers: I accept what my hon. Friend says and there is a great deal of substance to his argument. However, the issues involved are a little more complicated than those of a general Department of State. For instance, the relationship between our allies in matters of national security and defence has to be considered, as does the interrelation between GCHQ and the National Security Agency in America. In so many ways, there is a nexus of relationships. If that were disentangled, perhaps the argument for Select Committee status would be more valid, but at present it is not as simple as dealing with an ordinary Department of State.
Mr. Campbell-Savours: My hon. Friend is arguing that, by implication, accountability to the legislature means a wider form of accountability to Members of Parliament.
Mr. Rogers: No.
Mr. Campbell-Savours: That is how I understood his intervention. That is invalid if resolutions of the House suitably circumscribe the powers of the Committee, which is what the argument is about. We can carry resolutions that make the Committee as hermetically sealed as any structure that currently exists. We are told that such a Committee could not be prevented from taking evidence in public session if that were the wish of the Committee. A resolution of the House could introduce a general prohibition on the Select Committee taking evidence in public session. It could further place a requirement on the Committee to seek the permission of the appropriate agencies and the Prime Minister in conditions of dispute if it wished to take evidence in public.
It is argued that, while a Select Committee is neither more nor less likely than the ISC to leak, it would have the right to publish reports in a way that would prove prejudicial to the interests of national security. A resolution of the House could introduce a general prohibition on the Select Committee publishing reports. It could further place a requirement on the Committee to seek the permission of the appropriate agency, and the Prime Minister in conditions of dispute, if it wished to publish a report. Safeguards would be available for every eventuality.
As prime ministerial appointees, members are currently responsible for reporting collectively to the Prime Minister. It is argued that such limited powers to report would not be possible if the Committee were appointed by the legislature. There is no reason why the resolution of the House should not stipulate the procedure to be used in the publication of reports. It could require the Committee to publish its reports subject to sidelining by the Prime Minister for reasons of national security, as currently happens.
It is also argued that a move to a parliamentary arrangement would lead to greater pressure on Ministers to be accountable as witnesses to a parliamentary Committee structure, with less emphasis on agency heads giving evidence. That argument is not supported by an examination of practices in some of the House's other

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Committees. In my 11 years on the Public Accounts Committee, Ministers never attended as witnesses. I am not advocating a prohibition on Ministers attending. Ministers would be no more likely to attend a House Committee than the ISC. With hearings being held in private, there would be no additional pressure on Ministers to attend.
The most remarkable argument is that a lack of secure accommodation in the House would make it impossible to conduct inquiries, take evidence and deliberate in secure conditions. We have been to all parts of the world recently and seen parliamentary Committees working perfectly. The relevant House authorities manage to find secure arrangements.
My hon. Friend the Member for Rhondda may have been alluding to the fact that dealing with foreign powers and the agency involves trust. The problem in this particular instance is not the structure, but the people. With the right membership, a parliamentary Committee is no more likely to leak than the ISC. If the right people are selected, there will not be a problem. I remind those on the Committee—this is the first open debate that we have had; I welcome that—that we have to grasp the nettle, because there is an expectation among our colleagues that the system should work. We may be satisfied that it works, but they are not. They do not believe that it is credible. Journalists ring us all the time and we all give them the same answer: "We are not in a position to talk about those matters publicly." For us, that is all right, but they have no confidence in the structure set up in the 1994 legislation. Let us change it and build a system that commands public confidence.
7.35 pm
Dr. Julian Lewis: When I look at the extensive gaps on the Benches on both sides of the House, I feel like the last man monitoring subversion in MI5. I believe that even he is now out of a job.
It is always a privilege to listen to the hon. Member for Workington (Mr. Campbell-Savours). I do not always agree with what he says, but his comments are always thoughtful and well considered, and deserve to be taken seriously. I endorse the remarks of the hon. Member for Pontefract and Castleford (Yvette Cooper) about the importance of retaining MI5 files when the Security Service might be minded to destroy them. She outlined the main reasons. I shall not repeat them, but I am pleased to endorse them.
As my right hon. and learned Friend the shadow Foreign Secretary said, I initiated an Adjournment debate on that issue on 25 February. I am pleased to see that paragraph 40 of the report says that there should be safeguards against MI5 using file destruction to rewrite the historical record. There should also be safeguards to prevent politicians from doing the same.
The foreword to the report is a two-and-a-half page summary of the rationale for the continued existence of the SIS, the Security Service, and GCHQ. It is the finest distillation of all the reasons why those services are essential to the nation in the future, just as they have been in years gone by. Emphasis is laid on regional wars, aid and peacekeeping, nuclear proliferation, terrorism, computer security and chemical and biological weapons.
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I pay tribute to those in the SIS and the CIA who were responsible for bringing to the attention of the world community in 1993 the way in which the Russians, who had signed the 1972 biological weapons convention, had systematically flouted it for 20 years, redoubling their efforts to produce deadly bacterial weapons when other nations were honouring the agreement.
However, I find the foreword a mite over-generous in one respect. It says at the start:
"For more than 40 years, the United Kingdom and its NATO allies endured the threatening environment of the Cold War. The genuine menace of an aggressive world power, seeking to subvert and dominate Europe and the wider world, gave abundant justification for substantial defence, intelligence and security structures. In this climate, the case for foreign intelligence and internal security was generally accepted."
I am put in mind of an occasion as recent as April 1989, right at the very end of the cold war, when no fewer than 29 hon. Members saw fit to sign an early-day motion calling for the abolition not only of MI5 but of special branch. I am pleased to note that none of them has been appointed to the Intelligence and Security Committee.
I have sometimes been accused—not least by the honourable and ever-genial Member for Wolverhampton, North-East (Mr. Purchase)—of re-fighting the cold war in some of my speeches and interventions. We would be very foolish when considering the security and intelligence services' future role not to look at the cold war and the lessons it has for us.
Several points in the Committee's report give me grounds for concern. One is that, when the report concentrates on vetting, it says in paragraph 47:
"there may be files on individuals under the age of 55 because they joined an organisation which was categorised as subversive possibly 20 years ago, and these files may still be used for vetting and other purposes. However, no such files would be opened on somebody who joined the same organisation today."
That is a little naive. Many of the organisations that were subversive 20 years ago will no longer be around for people to join; they collapsed with the demise of the Soviet threat. There is no comparison between people who joined an organisation 20, 10 or 15 years ago, when that organisation may have been organically linked to the Soviet Union, such as many of the Soviet front organisations, and people who join a similar organisation today even though the Soviet threat has disappeared.
I am concerned that paragraph 17 of the Government's response to the report says:
"the Government's policy is that the Service"
—the Security Service—
"will no longer surface records in the vetting context purely on account of membership of organisations hitherto considered subversive."
Does that really mean that, if, for example, someone were being considered for appointment to a senior position in NATO, no attention whatever would be paid to whether he had previously been active in organisations classed as subversive at the height of the cold war? The fact that such checking apparently does not happen at least clears up a mystery for me about one person—an academic—who I know was appointed to a senior position in NATO

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despite being actively and prominently involved in seeking to undermine NATO's position at the height of the sensitive argument over European missiles.
Mr. Rogers rose—
Dr. Lewis: Does the hon. Gentleman wish to intervene?
Mr. Rogers: No, I am walking out on the hon. Gentleman's speech.
Dr. Lewis: The problem with MI5 dealing with subversion was that its task was much easier in war than in peace. In war, as we now know, the Security Service succeeded in the incredible task of taking control of the German spy network in Britain by means of the double-cross system and the XX committee. The German spy network was so fully controlled that not only was no effective espionage carried out in this country, but when the time came for London Controlling Section planners to work out the strategic deception that would fool the Germans on D-day, German agents in this country were used as the conduit for disinformation, which was fed to the Nazis and undoubtedly saved many lives.
It is more difficult to trumpet the achievements of the security services in peacetime. One tends to wish that they would be a little more forthcoming. For example, in 1961, when Colin Cross was writing his account—definitive at the time—of the fascist movement in Britain, he was still unable to say for certain that the fascists had been funded during the 1930s by Mussolini. It should not have taken the security services until November and December of 1983 to reveal special branch and Security Service reports that show that Mosley had indeed been the paid stooge of Mussolini for part of that period.
Similarly, I do not know, even to this day, whether the Security Service realised that, at least from 1958, right through until at least 1979, the KGB was financing the Communist party of Great Britain. Certainly, throughout all those years, leaders of the Communist party of Great Britain angrily denied that anything of the sort was going on. The fact came out not as a result of a revelation from the Security Service's archives, but when researchers who were looking through the archives in Moscow found reports of payments—in one year as much as £100,000—to Reuben Falber, the bag man for the Communists at the time.
I understand the security services' need for reticence when they are touching on matters that could relate to party politics. Much of the debate until now has inevitably been a mixture of generalities and structural recommendations. I should like to describe a few examples that might illustrate the difficulties that arise when people who belong to the security and intelligence services must make decisions about action and intervention.
During the second world war, in 1944, MI5 tendered a report to Cabinet Minister Herbert Morrison on the Trotskyist movement in Britain. It was remarkable for its comprehensiveness. It especially identified a man called Edward Grant—Ted Grant, as he later became better known—the editor of Socialist Appeal, as the leading organiser of Trotskyist subversion during the war. Strangely enough, that man was still active when, in the
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1970s, the Revolutionary Socialist League—the direct successor to the organisation with which he had been involved during the war—began infiltrating the Labour party as the Militant Tendency.
The question that one must ask is whether it is right for a security service to intervene when a democratic political party is being infiltrated by people who are subversive. I am delighted to say that, 10 years after I tried to help the Labour party to kick out activists of the Revolutionary Socialist League in the 1970s, the Labour party finally got round to doing it itself.
It is very strange that one can still look back at events in the 1980s and try to criticise the Security Service for taking an interest, but forget the interest that the security services took in the 1970s in the undermining of the Labour party by people who were trying to get revolutionary communists into Parliament on the back of the Labour ticket, which was finally confirmed by the all too belated expulsions from Labour's ranks.
Perhaps a more immediate example is that of the Soviet propaganda front organisations, such as the World Peace Council, the World Federation of Scientific Workers, the World Federation of Trade Unions and all the others that were set up in the late 1940s and 1950s to carry the Soviet propaganda message into battle against NATO and western countries. Those front organisations were banned by the Labour party for many years, because they were communist fronts. In 1972, the proscriptions were lifted, and suddenly, once again, the security services had a dilemma. What would they do if an activist in a political party were also an activist in an organisation that is an acknowledged instrument of a potential adversary?
To give the House the flavour of my point, I shall cite what the Foreign Office said at the United Nations about the World Peace Council. In a report in 1981, the Foreign Office said that the spokesman for the World Peace Council had said that his organisation represented hundreds of millions of people. The World Parliament of Peoples was presented in the literature of the World Peace Council as a kind of rival to the United Nations itself. However, the Foreign Office said, the grand facade of the World Peace Council was no more substantial than a Hollywood film set. The report said that the World Peace Council was a disguised instrument of one country's foreign policy. It was a wolf in sheep's clothing, and its clothing had begun to look very threadbare.
During the confrontation of the nuclear debate in the 1980s, an organisation came into existence which was a sub-front of the World Peace Council. It was called Generals for Peace. Generals for Peace consisted of eight former NATO senior military officers, half of whom were in their own right members of the World Peace Council. They were identified at the time as people who were engaging in an operation that was directly aimed at western strategic interests, and they were being orchestrated by a man called Dr Gerhard Kade, who was well known to be active in the Soviet front network.
When the cold war came to an end, those of us who had been denounced for trying to point out what Generals for Peace and the World Peace Council had been up to in this respect were somewhat heartened to

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see a report from a felicitously named former Stasi agent called Gunther Bohnsack, who had spent 26 years in the active measures department of East German intelligence. He confessed that Generals for Peace had been
"conceived, organised and financed by the Stasi."
This had created
"a real power that was in line with Moscow's ideas",
and was
"controlled through intelligence services in Moscow and east Berlin."
Last year, the former head of the Stasi, General Markus Wolf, confirmed the truth of that.
There are those who say that there is no role for the security services in monitoring subversion and the past affiliations of people who may yet be appointed to sensitive posts. I should like to know what they expect of somebody who has been involved with an organisation that turns out to have been actively in the pay and control of a foreign hostile intelligence service. [Interruption.]
Some hon. Members want to know the direct relevance of all this; it relates to the aspect of the report which says that, in future, the Committee should have a further investigative capacity. Paragraph 69 says that the Committee lacks the ability to investigate directly different aspects of the agencies' activities:
"Without such a capability, the Committee cannot make authoritative statements on certain issues … We … intend to introduce this capability in the coming year."
If the role of the Committee and its investigator is to guard against abuses by the security and secret services, quis custodiet ipsos custodes—who will guard the guardians?
Paragraph 26 of the report states that there will be more vetting of agency staff, more random searches and close checks, so that nobody employed by the agencies will be likely to do anything to undermine their security. I suggest that what's sauce for the goose is sauce for the gander. If the Committee, with its extra powers, wishes to take to itself the right to look absolutely, totally and deeply into individuals and cases being conducted by the security services, the Committee itself will have to do something to ensure that its own security is beyond reproach.
I have given examples of the dilemmas faced by the security and intelligence services when they find their inquiries into potentially hostile organisations leading them back towards a political party. Let us imagine what the security services' dilemma might be if they were faced with the prospect of looking at a Member of Parliament who had, for example, sponsored a defence fund for the Trotskyist paper Militant when it was threatened with a libel action by a fellow Labour Member of Parliament; who had described the US air raid against Gaddafi as American state terrorism against Libya; who had welcomed a campaign to have Porton Down closed, thus depriving Britain of its chemical and biological defence research centre; who had supported Cuba and congratulated it on the 30th anniversary of Castro's communist revolution; who had praised the World Peace Council's own bogus Kremlin-organised peace congress in Copenhagen in October 1986; or who had backed a front for North Korean propaganda organisations.
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The problem that would face the security services if they were looking into something of that sort is that they would find themselves investigating at least two members of the Intelligence and Security Committee itself. The security services will face a paradox—they must try to preserve their complete impartiality towards political parties, while doing their duty to follow the trail of hostile organisations, wherever it might lead.
I thank the House for its indulgence in hearing my speech. I look forward to hearing in particular the speech of the hon. Member for Lewisham, Deptford (Ms Ruddock), whose own organisation, the Campaign for Nuclear Disarmament, had a number of very close links with the front organisations which I have mentioned—and on that point I conclude my remarks—
Mr. Deputy Speaker (Mr. Michael J. Martin): Order. Before the hon. Gentleman concludes his remarks, let me make it clear that he will not impugn the activities of any hon. Member, and he will not make any remark against any serving Member of this House. The organisation to which the hon. Lady belonged is a legal organisation, and it is her own business.
Dr. Lewis: If I may conclude—
Mr. Deputy Speaker: The hon. Gentleman has concluded his remarks. I am telling him what he will not do.
7.56 pm
Ms Joan Ruddock: I congratulate the Committee on the report, and associate myself with the comprehensive opening remarks of my right hon. Friend the Foreign Secretary. Because of time, I intend to concentrate my comments strictly on the subject of personal files. I intend to speak of the past—not, I hasten to add, because I want to dwell in it, but because I think that it has direct relevance to this debate and to any future investigations that the Committee may undertake.
In 1979, I was Labour's parliamentary candidate for Newbury, where I lived at the time. At the end of that year, NATO announced that American missiles would be sited in Europe. Some months later, the Ministry of Defence organised a ticket-only public meeting on Newbury racecourse to explain why the cruise missiles should be sited at Greenham common. I spoke for the local opposition. For me, it was a mere accident of history and geography, but the consequences of that time have cast a long shadow over my life.
It was a very different time—a time of cold war, when, as the right hon. Member for Bridgwater (Mr. King) said in the introduction to the report:
"the case for foreign intelligence and internal security was generally accepted."
But then, as now, ordinary citizens thought that they had the right to free speech and peaceful protest. In 1984, the then Home Secretary, Leon Brittan—speaking of the Campaign for Nuclear Disarmament—appeared to agree. He said:
"There is no doubt that peaceful political campaigning to change the mind of government and of the people generally about nuclear disarmament is an entirely legitimate activity."

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So how did I lose my right to legitimate dissent? How did I end up—as I believe I have been—the subject of MI5 surveillance? I do not know if there are files on me or not, but I have been frequently named in that context.
In March 1985, Cathy Massiter, an MI5 agent of 12 years' standing who had left the service two years earlier, made statements in a television programme that she reiterated in a lengthy sworn affidavit. She has never been prosecuted. What I have to say derives from that affidavit.
At that time, the Security Service operated under the 1952 Maxwell-Fyfe directive, which I believe defined subversive activities as those that threaten the safety or well-being of the state or that are intended to undermine or overthrow parliamentary democracy through political, industrial or violent means.
Despite the history lesson that we have just heard from the hon. Member for New Forest, East (Dr. Lewis), I understand that, when I joined CND, MI5 did not believe that it was a subversive organisation—indeed, CND could not possibly have met the criteria that I have described. I was a long-standing member of the Labour party, and I worked for a well-known and respected voluntary organisation. Speaking about me, Cathy Massiter said:
"it was fully recognised by the Service that she had no subversive affiliations and therefore she could not be recorded under any of the usual subversive categories."
However, as she said, the service was not deterred. It took advantage of the fact that CND was an open and democratic organisation, with the highest ethical standards. We had no personal scandals, despite repeated attempts to smear individuals. There was no Russian gold, and we famously sent back the donations from a numbered Swiss account.
We gave interviews freely to anyone who asked. When I gave one to a Soviet journalist, I unwittingly provided MI5 with—according to Cathy Massiter—the opportunity to record me as a contact of a hostile intelligence service.
Dr. Julian Lewis: In May 1982, was not the hon. Lady a member of the delegation that travelled to Moscow to meet the Soviet arm of the World Peace Council? Sally Davison, one of her colleagues in that delegation, said that the difference between CND and the Soviet peace committee was that the Soviet Union was in favour of peace.
Ms Ruddock: I speak only for myself. Because CND was open and democratic, it was willing to engage in discussions with other organisations. At no time in the Soviet Union did we fail to put our case for disarmament equally, east and west. The debate is not about the virtues of nuclear disarmament—all hon. Members will have their own views on that. I want carefully to deal with the report.
Mr. Winnick: Will my hon. Friend confirm that CND, of which I was not a member, produced a pamphlet that condemned totalitarian rule in the Soviet Union, making it clear that the activities in which she and her colleagues were engaged could not take place there? How, therefore, can CND be described as a Soviet front organisation?
Ms Ruddock: I thank my hon. Friend for those remarks. Indeed, members of the democratic movement in the Soviet Union told us how much they had learnt from the way in which we conducted ourselves.
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As I said, Cathy Massiter alleged that I was recorded as a contact of a hostile intelligence service. I will never know whether the journalist was a KGB agent, but, frankly, it hardly matters. Central to the debate is the claim that someone who did not fit the rules for scrutiny was put under security surveillance on a pretext. I had no redress then—and I have none today—for the slur on my character and integrity.
Secret surveillance was not the end of the matter. In March 1983, the then Secretary of State for Defence established a special unit—DS19—inside the Ministry of Defence, with the solely political purpose of combating CND's campaign. Miss Massiter testified that she was required to compile a report based on her MI5 files for DS19. That was a clear breach of the Security Service's duty to remain free of party political bias and influence.
Between 1981 and 1986, I was frequently subjected, as a direct consequence of my involvement in CND, to frightening and intimidating behaviour. I shall never know whether those events related to MI5, but I feel certain that my privacy—and that of my family—was systematically invaded, and my character, impugned, with absolutely no justification.
Did that happen to me? Does it still happen today? Could it happen tomorrow? The Committee must ask those questions for us, and it is clear that it is willing to do so. I share the concerns expressed in paragraph 40 of the report, which my case illustrates.
According to Cathy Massiter, my file grew and grew. It contained, she said, special branch references to my movements, products of mail and telephone intercepts, and police reports recording my appearances at demonstrations and public meetings. I believe that I should have the right to see that file. Indeed, before I heard the arguments of my hon. Friend the Member for Pontefract and Castleford (Yvette Cooper), I was going to say that I believed that I had the right to have it destroyed.
The Committee's report makes no such recommendations about access, but, in paragraphs 50 and 51, it acknowledges the need to consider such matters. It says that more than 250,000 personal files still exist. I am not suggesting that my case is typical, but I suspect that it is not unique.
Changes in the law and the creation of the Intelligence and Security Committee should ensure that there is no repetition of the events of the 1970s and 1980s. However, as my hon. Friend the Member for Pontefract and Castleford asked, how can we have effective oversight if the people we are supposed to oversee decide how much information we receive? I wholeheartedly endorse the sentiments behind that question, and I welcome the Committee's proposals for a new, independent investigative arm.
The events that I have described belong to another time, but, even if my file had been closed a decade ago, I would still be angry that it had been compiled in the first place—solely because I was at the centre of an open and democratic organisation, which had massive public support and which was engaged in peaceful protest.
The charge that I was an enemy of the state was so patently absurd that I had thought that it had long been dismissed. However, The Mail on Sunday now says that I was one of the nine people singled out as "security risks" before the previous two general elections.

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I have never been a security risk. I was and am a loyal citizen of this country, who has done nothing more than campaign for causes in which I believe. If there is any file on me that suggests otherwise, that file contains a falsehood, and I should have the opportunity to correct it.
The rights to free speech and protest are fundamental democratic rights. Take them away, and we lose our ability to defend all the other rights and freedoms that are dear to the House. I very much welcome the Committee's report. I regard its work as one of the important checks and balances that protect those freedoms.
8.8 pm
Mr. Kevin Barron: My hon. Friend the Member for Lewisham, Deptford (Ms Ruddock) will forgive me if I do not cover the areas that she mentioned. Clearly, she listened to what was said earlier about the proceedings of the Intelligence and Security Committee as regards personal files.
I want to cover two areas that the Committee has considered since I joined it in July last year: personnel management and oversight. The Committee has been studying personnel management since it was set up, investigating recruitment, the adequacy of vetting procedures and the handling of disaffected staff. As a relatively new member, I am pleased—as are most members, I think—that changes in personnel management in the agencies are in line with policies and practices in the rest of the public sector and that they are evolving year by year through the use of best practice. For example, the agencies are developing measures to increase personal responsibility for career development. Career progression is no longer likely to be made solely because it is one turn's to move up the ladder, which is not the best way to promote people's careers in any institution. I am sure that it causes resentment if people believe that they are ready for and have earned that next step, but are not promoted. Some people in the agencies had become disaffected as a result.
Recently, we looked into that matter in detail, primarily because of the disaffection that has been reported in the newspapers in the past 12 months. The Committee looked into individuals and bodies inside and outside the agencies that have responsibility for handling the problems of disaffected staff: the individual's line manager, the grade manager in the personnel branch, training or security staff, occupational psychologists, and personal and financial counsellors, in addition to a range of managers. Also, we met welfare staff who are employed by each of the agencies, who are very approachable.
I, and other Committee members, were impressed at the experience and commitment of the professionally trained groups whose role inside the agencies has been to give advice and counselling on employees' problems. Of course, their personal problems vary. The agencies give me great confidence in the way in which they work with staff members who feel that they have not been looked after properly for one reason or another.
In addition, we studied the role of external staff counsellors. We took evidence from Sir Christopher France, and the report states how many disaffected staff cases he has handled. However, in many of the cases that we have read about in the media, the individuals involved
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have not sought to have what they believed to be a wrong put right from within the agency, which is a great problem. The staff counsellor outside the agencies has a reactive role when dealing with disaffected employees. He cannot seek people with problems. His door is open if people choose to walk through it, but many of the people who end up in the media after they have left the service do not choose to walk through his or any other door. The agencies see that as a great problem, as many hon. Members would agree it is. The Committee thought that the staff counsellor could perhaps have a more proactive role with people who have left the service and are dissatisfied with their situation.
The Committee also considered access to employment tribunals for people who felt that they had been wronged in the workplace. Indeed, that was one of our recommendations and we all agreed that it ought to be possible to constitute a tribunal of members and staff qualified to serve as an industrial tribunal and to deal with secret material. I am pleased at the Government's positive response to that recommendation. They are considering it. However, not many of the cases that come into the public domain would be served by such a tribunal. If someone chooses not to go to a tribunal and goes instead to the media—whether by writing books or selling articles to the newspapers—there is little that we or the agencies can do about it.
The status of oversight and of the Committee have been mentioned. Members will have read that there is a difference of opinion about the latter and about whether the ISC should be a Select Committee. My hon. Friend the Member for Workington (Mr. Campbell-Savours) argued that case, saying that the evidence for it to have such status was overwhelming. I feel quite underwhelmed by the debate on the matter. I do not do so because I am worried about status—I am not a status politician or a status person, and I do not feel that our appointment by the Prime Minister gives us some great and grand role and that all wisdom is ours. Having spent 15 months on the Committee, I can say that on occasion it is not ours at all, so I do not buy that argument.
On the question of how we operate as a Committee within the "ring of secrecy", which is a broad brush, but under the Official Secrets Act, I have worked on two Select Committees and have now spent 15 months as a member of the Intelligence and Security Committee, and I realise that it would be difficult for our Committee to be a Select Committee. For example, where would we meet? The public can be removed from Select Committees, but that is done only rarely. Our Committee has no public gallery and most of our questioning and information gathering would preclude that. I suspect that it would be difficult to find a Committee Room in the House in which evidence could be heard in confidence without spilling over into the Corridor. So, there are logistical problems. Some hon. Members think that it would be an easy operation, but because of the very nature of the evidence that we take and the people we interview, we would inevitably end up in the room in the Cabinet Office where we take evidence now, doing so under the same conditions.
My hon. Friend the Member for Workington ended his remarks by saying that what matters is the nature of the people on the Committee and I agree, but that is true of the Committee now. It does as good a job as any Select

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Committee could do. So, we should not spend too much time arguing that it should be a Select Committee without considering what it does.
Mr. Campbell-Savours: I listened carefully to my hon. Friend's reasons for rejecting my argument. He gave two reasons, which were logistical—where the Committee could meet and whether conditions would be secure—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I remind the hon. Gentleman that he should be addressing the Chair.
Mr. Campbell-Savours: Is my hon. Friend saying that, if we could find a secure location in the House, he would change his position? I listened carefully to what he said.
Mr. Barron: Let me finish. The direct answer to that question is no.
Mr. Campbell-Savours: What is the other answer?
Mr. Barron: It is a great pity that my hon. Friend the Member for Sunderland, South (Mr. Mullin), the Chairman of the Home Affairs Committee, is no longer sitting next to my hon. Friend. In his speech, which I thoroughly enjoyed, he said that the Committee has to take what it is given—that is not my experience; we ask for and receive some materials that are not offered to us—and that it has no powers to call for papers and witnesses. I might disagree with that, but I would not want the Committee to have the power to call for papers. There are some papers that no one should be able to see, because of the dangers of certain information ever getting out.
My hon. Friend the Member for Sunderland, South also said that Select Committees, in theory—he smiled when he said that—are appointed by Parliament. I know why he smiled, because I suspect that, like me, he got a phone call last May about what Select Committee he wanted to be on and, perhaps, whether he wanted to chair one. I had such a phone call from the Executive, but I am pleased to say that I turned down the request and have been able to sit on the Intelligence and Security Committee for the past 15 months, where I have learnt a lot more about intelligence and security than, with all respect, I would have learnt by questioning my right hon. Friend the Home Secretary or other Ministers. We see many things in the ring of secrecy that we would not see if we were a Select Committee.
Mr. Campbell-Savours: I put it to my hon. Friend that, irrespective of the smile of my hon. Friend the Member for Sunderland, South (Mr. Mullin), the power rests with Parliament, because we can object. When we were in opposition, I blocked the membership of a Select Committee of a Conservative Member, and in the end his nomination was withdrawn; so we are in a position to exercise that power when Parliament itself decides who should be on the Committees.
Mr. Barron: I will not rehearse what happened with the two Select Committees that I served on, but I do not think that the decisions were taken in the Chamber; they were more likely taken in the Whips Office.
Mr. Deputy Speaker: Order. This is very interesting, but it is straying outside the terms of our debate.
Mr. Barron: Thank you, Mr. Deputy Speaker.
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It has been suggested that the Committee should have an investigative arm so that we can consider certain matters in detail. I hope that people in the security and intelligence agencies realise that we do not want a roving brief to allow us anywhere in those agencies. We want to be able to send someone into an agency to investigate a specific matter when we feel that to be warranted.
Many events might trigger such an investigation—I do not want to speculate how many times a year that would happen; it might not even happen at all—but we, like many other parliamentary Committees, work on a parliamentary timetable, and events that should be investigated quickly often happen when we are not here in London. We could not easily reconvene the Committee for such an investigation, which is why we should strengthen our powers to enable us to send someone who is independent of the agency to look at papers and reassure us, we hope, that whatever allegation has been made is not true.
At present, all or most of the allegations made against the agencies go unanswered. I can understand that, because once they started responding to one question, that would beget the next and the next, and the process would run out of control. It would be difficult for the agencies to be more open with the general public in that way, so it would help if we had the right to send in an individual to consider a specific issue, after which the Committee could make a public statement.
In the past 15 months, I have had an insight into areas that would have been completely closed to me before. I was as sceptical as the next person about the security agencies and what they do for the country, but I have been greatly impressed by the way in which they operate both inside and outside the country and by the advice that they give. The people in the agencies are the most professional people I have ever met.
If the Committee strengthened its oversight, we would be able to tell people that the security and intelligence agencies are doing positive things on our behalf, for the good of the country; then more of the general public would recognise that.
8.26 pm
Mr. Clive Soley: I apologise for missing about an hour and a half of this debate. I was attending a meeting with the Speaker on modernising the House of Commons to make it more effective in examining the Executive, which is not a million miles from the subject in hand.
I congratulate the Government on holding this debate, because it is not long ago that we were told that it was not possible to debate these issues. As the right hon. Member for Bridgwater (Mr. King) said, only four or five years ago MI5 and MI6 did not exist in any statute. It always struck me as odd, as I remember saying 10 or 15 years ago, that two of the most famous security services in the world—admittedly, that fame is largely owing to Ian Fleming's James Bond character—had no statutory existence.
Those intelligence agencies were created at a time when the House had begun to lose some of its effectiveness in holding the Executive to account. I support the call by my hon. Friend the Member for Workington (Mr. Campbell-Savours) for the Committee to be a normal Select Committee, subject to the

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constraints that he rightly set out, because when we refuse to do that we send out the message that we do not have confidence in our Parliament. That is why other countries have a conventional scrutiny system.
The members of the present Committee are good people and they are doing a good job but, because they were appointed under the relevant statute to answer to the Prime Minister, they are a group of parliamentarians who have been asked by the Executive to keep the Executive under observation. The Select Committee system is there to hold the Executive to account more effectively, and that is why it should always be used to represent the House. My hon. Friend the Member for Rother Valley (Mr. Barron) rightly drew attention to the fact that the Whips have an enormous say—ultimately, the real say—in deciding the membership of Committees. Things could go off the rails, as they occasionally do—[Interruption.] Quite right; it is very rare. Increasingly, however, people are questioning that position and they have reason to do so.
Mr. Campbell-Savours: May I request my hon. Friend not to be modest and to state who he is, for the record and so students outside who may read our debates are aware of it? He is the chairman of the Parliamentary Labour party, representing two-thirds of the House of Commons. I am sure that his comments tonight reflect the views of many of the members of the parliamentary Labour party.
Mr. Soley: This matter is open to discussion in the parliamentary Labour party and in the Conservative party. Many Labour Members would not agree with what I am saying, although many would. The important point is that over the past four or five years we have moved so dramatically. We were told that we could not discuss the issue and, indeed, if we went to the Table Office, we were told that we could not table a question on it. No one, least of all me as chair of the parliamentary Labour party, is going to pretend that the party system does not play a crucial role in ensuring the governance of the country. It always has and it always will, but a delicate balance must be struck between the rights of the party and the rights of parliamentarians. As the chair of the parliamentary Labour party, I have to be aware of that balance and take it into account in my judgments.
Mr. Rogers: Does my hon. Friend accept that this issue has never been the subject of debate in the parliamentary Labour party and that we have never voted on it? He speaks in a personal capacity tonight, not on behalf of the parliamentary Labour party.
Mr. Soley: Of course that is so and I did not introduce the subject of the post I hold.
Mr. Rogers: He is going on about it.
Mr. Soley: I ask my hon. Friend to listen to what I am saying, especially as he intervened. The position is not as stark as he maintains and there are arguments on both sides. All I ask him to do is to listen to the argument and bear in mind that all the things we were told could not take place four years ago—the tabling of questions,
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debates such as this and reports by parliamentarians on security services—are now all happening. Change does happen and the House is an agent of change.
The confidence of Parliament is critical. In the last century, when Parliament was at its greatest, it would not have accepted a situation in which the Executive could set up bodies that then answered to them. Parliament would have resisted that, but we lost that attitude at about the time of the first world war. I have already mentioned the difficult balance between the rights of parties—the need for parties to maintain unity to be able to govern—and the rights of parliamentarians to hold the Executive to account, which is, after all, this place's final purpose.
My next subject is slightly tangential, but crucial to the work of the Committee. Several hon. Members have referred to the actions of disaffected members of the security services and others in the civil service in passing secret information into the public domain. They have done so for two reasons, either because they have a resentment against the security services or want money—Peter Wright and "Spycatcher" is the classic example—or because they felt it was right to reveal information in the public interest. The two cases that I have in mind have nothing to do with the security services directly—one is Clive Ponting and the other is the rather sad case of Sarah Tisdall, the 23-year-old who was sent to prison, having given information to The Guardian.
The Secretary of State for the Home Department (Mr. Jack Straw): Blame The Guardian.
Mr. Soley: If I remember rightly, The Guardian lost an action on the matter, but the point is that the Official Secrets Act—and Labour party members have long argued this—needs a public interest defence so that we can differentiate between those who reveal information for money or fame and those who do it because they see it as a public duty. Clive Ponting and, probably, Sarah Tisdall, fall into the latter category, but Peter Wright does not. I urge my right hon. Friend the Home Secretary to consider whether we should, in the future, change the Official Secrets Act so that the courts have a much clearer guide to differentiating between those who reveal information because they are disaffected or want money and those who believe that they have a right to do so because of legitimate public interest in democracy and the rule of law. We must never forget, when discussing the security services, that we are discussing a vital arm of the defence of the state. I have always, and without reservation, held that the security services are necessary in any modern state. They are there to protect the very democracy and rule of law that brings us here and if we ever allow that fact to get out of focus, we will go wrong.
I turn now to the issue of personnel management. I congratulate the right hon. Member for Bridgwater and his colleagues on picking up that issue. It came to my attention some years ago and it highlights the wider problem of how the agencies are set up and operate. In Shepherd's Bush where I held my walk-in advice surgeries at the time I used to get a wide variety of local people, but I was surprised one evening when a person came to see me and, after a short discussion, it became apparent that he was an MI6 officer, as they were then called. His problem had to do with the classic situation of being grossly discontented with the way in which the service operated. Having spent some time with him, then

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and on another occasion, I took the matter up with the then Home Secretary, now Lord Hurd. I was told some time later that the matter had been investigated by management and it was felt that it had been properly handled. The person involved did not know that and neither did I. Indeed, I am now satisfied that it had not been properly handled, because another incident took place a year or two later—which also came about partly through my advice surgery—that suggested to me that management in the security services was failing badly.
The various efforts that have been made to deal with staff problems are very important, as my hon. Friend the Member for Rother Valley mentioned. We must take into account staff who have personality or social problems, such as drinking or family problems, as well as those who feel seriously aggrieved about their treatment as employees by the agency. Such people feel they have no voice and can end up, bizarrely, tootling down the Uxbridge road to see their local Member of Parliament. I am all for people seeing their local Member of Parliament, but there has to be a better way to deal with the issue. At the time, the man who came to see me had no alternative and he dealt with the problem responsibly. At the end of the day, he and I felt that it had not been adequately addressed.
My final point is on the question of files. The former Under-Secretary of State for Women, my hon. Friend the Member for Lewisham, Deptford (Ms Ruddock) spoke powerfully about the issue and made the case as well as it could be made. Her speech should be sent round to schools as a good introduction to civics.
I have a question for my right hon. Friend the Home Secretary relating to—I think—paragraphs 46 and 51, which deal with summaries on candidates for election. I have no reason to believe that those matters are inappropriately dealt with as a rule, but I am concerned that hon. Members on both sides of the house have, to my certain knowledge, had regular dealings over many years with political representatives of paramilitary organisations in Northern Ireland. The previous Secretary of State for Northern Ireland was courteous enough to tell me that he could assure me that my phone was not bugged. I had not asked about it, and was not troubled by it, but he offered the information. I was aware, therefore, that that thought existed, and it was clear that bugging happens in limited circumstances.
I am anxious to know, therefore, that any information held on a Member of Parliament, or on anyone who stands for election, is judged properly. If one believes—as, to be fair, many Conservatives did—that it is necessary to talk with political representatives of paramilitaries in Northern Ireland, even at the height of violence, it is important to be able to do so with confidence that one's phone is not being tapped. That matter is retrospective now, but it is profoundly important.
Members of Parliament must be able to talk to people who are not wanted by the police for any criminal offence freely and without fear that they are being recorded and might be considered, as my hon. Friend the Member for Deptford has said, a threat to national security. There is a delicate balance to be struck. I know of cases, in the recent history of Parliament, of individuals who would have had real concern about that. I raise the point because several
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of us, myself included, were involved in talks supported by the then Government involving representatives of paramilitary groups. I always drew the line at talking to anyone whom I knew to be wanted for a criminal offence of any kind. I would, however, talk to anyone who was elected, or who represented a legal organisation.
The Committee deals with crucial areas concerning the importance of Parliament, management structure and how we deal with elected representatives. We should never lose sight of them.
8.42 pm
Mr. Robert Sheldon: I want to raise only two matters that arise from my long experience as Chairman of the Public Accounts Committee. That experience was long only because we were not successful in winning elections, which meant that the Opposition were able to elect the Chairman of the PAC. The two matters are fraud, and the ability to investigate areas of security and sensitivity.
There is a clear danger of fraud wherever there are security matters. Obviously, not many people can be involved in making decisions, even financial decisions. An extreme example of that occurred in the Metropolitan police. There was a fellow named Williams who had authority to place orders and to make payments. He was buying helicopters. The police did not want the criminals to know that they had that kind of surveillance, so Williams was given that power. He pocketed £5 million, went off to Scotland and bought most of a village and a hotel. He lived the life of a lord, and everyone assumed that a wealthy relative in Norway had provided the money. Every Sunday, he returned to London to cover his tracks.
That is the sort of case that can happen. It is very difficult to uncover such cases when there are matters of great secrecy, so there must be proper procedures, no matter how important security is. It is obvious that one person must never be made responsible both for placing orders and for receiving the money. Less obviously, there must be some investigation from outside. In that case, the investigation was made by the Comptroller and Auditor General, a marvellous institution that both does the audit and understands what is going on. In the Ministry of Defence, people from the National Audit Office are placed permanently to see what is going on. Some information filters through to the PAC, rather more filters through to its Chairman, and that is enormously important in giving an understanding of how the system works, and allowing rules to be laid down for procedure.
Another case was that of Al Yamamah, a £20 billion contract with Saudi Arabia, which was investigated by the Comptroller and Auditor General. How should we handle matters of such sensitivity? I informed the Committee of the matter, and it allowed me and the senior Conservative Member of the day, Michael Shaw—now Lord Shaw—to act as the full Committee. We pursued the matter together. If there had been any fraud or bribery in the Ministry of Defence, there would have been no question of secrecy. We would have let that be known in order to preserve the standing of the public service in general. In fact, there were matters concerning certain overseas individuals that we thought might be disadvantageous to our continuing with that important contract. We were able to assure ourselves that there was nothing more than that.

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The PAC has long been in favour of the ability to pursue public money wherever it may go. We do not have that power now and we did not have it then. I hope that the Committee may get that power at some future stage. It was discussed in 1983. Following public money wherever it goes happens in the United States of America and other countries.
My other point relates to the security services—MI5 and MI6 in short. We considered their two buildings, about which I shall not comment much except to say that I wish they were not quite as obtrusive as they are. There should be a certain amount of discretion not only in the services, but in their buildings. The one on the other side of the Thames is almost a disgrace, although that is a personal observation that has nothing to do with my former position as Chairman of the PAC, which ended last year.
I was concerned when we investigated the buildings. I read a secret report from the Comptroller and Auditor General, and I could see that there had been an overspend that had not been reported to the House. There were certain reasons for the overspend, and certain security implications into which I cannot go. However, the fact that there were overspends on both buildings should have been known. Until I ceased to be Chairman of the PAC, I was pursuing the matter to make sure that it was known. Unfortunately, the general election intervened, and my role on the Committee ended.
The crucial point is that there is a need for an investigating arm. There is the Comptroller and Auditor General, but the Intelligence and Security Committee needs someone to perform that role. It needs a highly respected and responsible person who has the approval of Government and Parliament and who is able to undertake investigations. Knowing our civil servants and public-spirited individuals, it would be astonishing if we could not come up with one or two names of people who could undertake such activity.
No one can deny that are several things going wrong in our security services. There have been too many reports of one sort or another. While the right hon. Member for Bridgwater (Mr. King) can undertake certain investigations—I pay tribute to his valuable work—that facility is limited. We need someone inside the bodies concerned to help us find out what is going on. The person with that responsibility must have the respect of people generally. I hope that the Committee will return to this matter in due course.
8.49 pm
Dr. Gavin Strang: It is clear from the debate that the House values the third annual report of the Intelligence and Security Committee. We are all grateful for its work. The right hon. Member for Bridgwater (Mr. King) brings much experience to it and he and its other members have served the House well.
There can be no argument about the importance of the work of the security services. The report recognises the huge value of their work when it is successful. As many, including the Foreign Secretary, have noted, in the main it is by definition not sensible or practical to focus attention on their successes. The report is valuable and contains much useful material on personnel management
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and on the compilation, retention and destruction of personal files. I, however, wish to discuss the security services' priorities.
There are clearly many valuable things that the security services can do, but resources are limited. The end of the cold war provides a great opportunity. Understandably, most of the focus of the media has been on the new work that they are doing on drugs and crime. I am sure that my right hon. Friend the Home Secretary values that work, where they are able to contribute.
I want to concentrate on other areas. The report's preface states:
"Moving British forces on humanitarian or peace-keeping missions into dangerous and untested territory requires the best possible intelligence on the local situation, and a close watch on what may be rapid and threatening changes in very volatile circumstances. Britain's involvement in such activities has also resulted in new terrorist threats to British interests."
We are proud of the contribution of our forces to peacekeeping—the Foreign Secretary mentioned Bosnia—but the work of the intelligence services in that respect is crucial and should be strongly supported.
My second point concerns the growth of international terrorism. There is huge growth in world aviation, and that will continue. That means more threats to aircraft, to mention but one aspect of international terrorism. If the intelligence services can contribute to reducing the number of hijackings, that would be an important service.
Thirdly, the preface mentions the important matter of the proliferation of nuclear weapons and other horrific modern weapons capable of huge destruction. If the intelligence services can increase our knowledge, especially of those countries that are developing such capabilities, it must be of immense potential value to our people.
Supporting our forces, international terrorism and the proliferation of weapons of mass destruction are by definition areas of great international interest. It follows that our intelligence agencies work with other agencies. That is how it should be. There are established democracies like ours with viable services, and by working together, they can achieve more. However, hard decisions must be taken on the priority and resources allocated to those activities.
On page 9, the report gives a figure for total expenditure of around £700 million. Paragraph 19 states:
"Figures for the individual Agency budgets are not at present published. The Committee believes that the fullest information should be published wherever possible, and will be discussing further whether there could be greater openness in this area."
All power to its elbow.
We know that, by definition, the intelligence services must be treated differently. No one wants transparency that compromises their work, but although decisions on the priority attached to different activities are for the agencies and the Government, Parliament and the broader community should also be able to participate. I hope that the committee will be able to provide more information and more of a breakdown of the resources allocated to different activities so that we can all contribute to the development of a set of priorities that commands the broad support of Parliament and the country.
We all hope that the significant sum of money still allocated to combating terrorism associated with Northern Ireland will come down; it is too early to say. If it does,

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we can have a constructive debate on how that money can be effectively used to help further the benefits that the security services have the potential to bring to our people.
8.56 pm
Mr. David Winnick: This has been a good debate marred only by the characteristic contribution of the hon. Member for New Forest, East (Dr. Lewis). He went to great lengths to tell us that the World Peace Council was a Soviet front organisation, but as everyone in politics and, I assume, in this House, knew that from day one, it was not startling news.
Whenever there is a call for greater accountability of the security services, the fear is always expressed, as it has been to a limited extent today, that that would undermine the work being undertaken. That was the excuse for retaining the ban on unions at GCHQ from the beginning of 1984. Labour opposed that ban and promised that once we were elected, it would go, as it did within days of our victory last May. Would anyone suggest that in the months that have elapsed since, its work has been in any way undermined by the fact that people have the right, which they should have in a democracy, of belonging to a trade union and having the union recognised by management?
In the not-so-distant past, any form of parliamentary Committee was opposed. It was long argued that it would be wrong for parliamentarians to be involved in examining the work of the security services.
In the 1983 Parliament, when I was a member of the Home Affairs Committee—I am again a member of that Committee—it was decided to look into the work of the special branches of the police. As far as I know, it was the first time that that had ever been done by a parliamentary Select Committee. Critics outside argued that we should not do that, as the special branches worked closely with the security forces. However, we did. Our report was not unanimous; it was a majority-and-minority report, but no one suggested afterwards that the work undertaken by special branches was undermined as a result of our inquiry.
There has been a tendency to question whether such work should be undertaken. As I have said in the past, I have never doubted that even if there were no terrorism in Northern Ireland, from Republican or Loyalist sources, or even if international terrorism did not exist, the work of the security services in a democracy such as ours would be essential. Moreover, I know of no democracy, let alone dictatorship, where such work is not undertaken in some form or other.
Those involved in extremist organisations that want to undermine and, if possible, destroy parliamentary democracy should be targeted. Who would suggest that the National Front, the British National party or other such organisations should not be targeted? No Labour Member would suggest that extremists on the ultra left who carry out activities that are not meant to advance the cause of parliamentary democracy should not be targeted. How far they should be targeted is a matter of judgment for the security services, but I have never disputed the fact that such work is necessary.
It is important, however, that the security services should carry out such work with the clear understanding of what they are about. The former Under-Secretary of State for Women, my hon. Friend the Member for
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Lewisham, Deptford (Ms Ruddock), explained what happened to her as a result of being involved in the Campaign for Nuclear Disarmament. She quoted Cathy Massiter, a former MI5 employee, whom even Conservatives, I believe, respect for the manner in which she spoke out. She concluded that much of the work that she was doing was simply wrong, and said:
"Anyone who was on the Executive of the National Council for Civil Liberties"—
now known simply as Liberty—
"who worked for the organisation, was an active member to the degree of being, say, a branch secretary of the organisation, would be placed on permanent record and routine inquiries were instituted to identify such people and police inquiries were sought."
These people were not extremists. Indeed, it can be argued that they did a useful job in defending our civil liberties. How can what happened possibly be justified?
In an Adjournment debate on 21 December 1983, I raised the case of a constituent of the right hon. Member for Sutton Coldfield (Sir N. Fowler).Mrs. Madeline Haigh made no secret of the fact that she was a CND activist. She wrote to the press and was, as far as anyone could tell, a perfectly law-abiding person. However, police investigations took place and she was lied to. The right hon. Member for Sutton Coldfield, I see, nods his head. The reply that he received was not the truth. Being a determined person, Mrs. Haigh wrote again to her Member of Parliament. The right hon. Gentleman—he was a Minister at the time—carried out his constituency duties in a proper manner. He wrote again to the chief constable and received a different reply, which showed that the police had lied to his constituent.
Incidentally, I do not wish to pre-empt Thursday's debate, but the point can be established that once a Member of Parliament is elected, he serves all his constituents, not necessarily according to policy. I doubt whether Mrs. Haigh voted for the right hon. Gentleman. As we all would in such circumstances, he carried out his duties and no one can criticise him. The case caused much concern, which is why I raised it at the time.
As we know, since the early 1980s commissioners and tribunals have been established. One argument that is constantly advanced is that those commissioners and tribunals should be able to avoid some of the abuses that have occurred in the past, but paragraph 58 of the ISC report points out that none of the tribunals has found in favour of a complainant. The decisions of those tribunals may well have been justified, but I wonder whether such commissioners and tribunals could be relied on to be the custodians, or guardians, in circumstances in which abuses could occur in the security services.
Mr. Rogers: As my hon. Friend will remember, when we served on the Standing Committee considering the Bill that became the 1994 Act, we were given statistics showing that, during a period just before 1994, some 51 cases had been referred to tribunals, and none of those tribunals had found in favour of a complainant.
Mr. Winnick: Indeed. Paragraph 58 also states that, as the Committee had had no access to the material involved, it had been unable to make a judgment. That is entirely understandable.
I welcome the Committee's conclusion in paragraph 69 that it wants "an additional investigative capacity". I am sure that my right hon. Friend the Home Secretary will be able to tell us whether the Committee will be given the necessary powers.

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Perhaps engaging in a bit of mischief making, my hon. Friend the Member for Workington (Mr. Campbell-Savours) predicted that I would quote what had been said by Front Benchers and other Labour Members in opposition. I shall not do so, because it would serve no purpose; but I will say that, in opposition—certainly around 1994, when we were discussing these matters—we took the view that there should be some sort of parliamentary Select Committee rather than what was being proposed, namely the ISC.
I do not challenge the contention that, in government, it is possible to change or at least modify one's opinion, but I must tell my right hon. Friend the Home Secretary that I should be happier if the Government did not close their mind to the possibility of a Select Committee. No one is suggesting that my right hon. Friend will tell us tonight that such a Committee will be formed, but I hope that the Government will give it serious consideration.
Let me make two final points. First, I do not believe that this issue will go away. The fact that debates such as this take place—like other hon. Members, I have initiated them in the past—demonstrates that it is an on-going issue. Secondly, although some have opposed the establishment of any parliamentary Committee, no one—not even the hon. Member for New Forest, East—has today challenged the existence of the Committee chaired by the right hon. Member for Bridgwater (Mr. King), despite all that has been said in the past.
I very much doubt that, if and when a parliamentary Select Committee comes into being, anyone will stand up in the Chamber and say that it should no longer exist. In other democracies, the security services are subject to much more parliamentary accountability, and I personally will not be satisfied until ours are too. We have taken the initial steps, and we have had a useful debate today. As I have said, I hope to hear from my right hon. Friend words that will encourage me to believe that, in the not-too-distant future, we will have the parliamentary accountability that we said we wanted when we were in opposition.
9.8 pm
Sir Norman Fowler: This has been a valuable and exclusive debate, although perhaps not quite as exclusive as it looks at the moment. I congratulate the members of the Intelligence and Security Committee, many of whom have spoken, on the way in which the Committee has been accepted and is trusted by the security services. In particular, I congratulate my right hon. Friend the Member for Bridgwater (Mr. King) on the way in which he has led the Committee. We are fortunate to have a man of his experience and integrity as its Chairman.
In the debate, there were two features of particular significance. First, there was general agreement that, even though the old iron curtain may have been brought crashing down, there was still a need for the security services; that point was made by my right hon. Friend the Member for Bridgwater and by the hon. Member for Walsall, North (Mr. Winnick). It has not been a matter of the security services inventing new threats or new roles for themselves. Those threats were already there to be tackled. In particular, there was the threat of organised crime and of drugs.
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Secondly, there was a recognition generally throughout the debate that special circumstances applied to the security services in respect of secrecy. Throughout the world, people will not take risks unless they are confident that every effort will be made to preserve their secrecy. Every reasonable effort must be made to do that, including personal management of the services themselves.
There was less agreement on how those principles should be put into practice, particularly on the nature of the committee that should oversee the security services. Several Labour Members—the hon. Members for Workington (Mr. Campbell-Savours), for Sunderland, South (Mr. Mullin), for Walsall, North and for Ealing, Acton and Shepherd's Bush (Mr. Soley)—argued for the Committee to be a Select Committee of the House. Indeed, the hon. Member for Sunderland, South pointed out that at one stage the Labour party said that that was its policy.
I am glad to say that I am entirely unencumbered by such a pledge, which is just as well. In any case, I would not accept the argument, because I am persuaded more by the argument of my right hon. Friend the Member for Bridgwater, the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and the hon. Members for Rhondda (Mr. Rogers) and for Rother Valley (Mr. Barron), as well as my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis): the way forward is to seek to develop the present structure—to add, as the report proposes, an investigative capacity to the Intelligence and Security Committee.
That is a sensible step forward. That is the way in which to proceed. The Committee has the confidence of the security services. That is important because, without it, it would be easy for the shutters to come down. We all know that that is true. We all know how these things work, but an investigative capacity would enable the Committee to dig deeper.
A strong case has been made with regard to the destruction of personal files and the introduction of some form of independent check. The point was made by the hon. Member for Pontefract and Castleford (Yvette Cooper) and supported by my hon. Friend the Member for New Forest, East (Dr. Lewis). There are two issues. There is the issue of operational use, and the security services are the only people who can decide that. However, there is also, if I may put it this way, the requirement of history. It would be a great mistake if files were destroyed that could throw light on policies and, sometimes perhaps, on personalities at the time. The Government should look at that matter again.
Another point that was raised—[Interruption.] May I have the attention of the Secretary of State for Foreign and Commonwealth Affairs for a moment because it was raised by him in the debate, but not taken on? He referred to the three security agencies and asserted:
"It makes sense because they work so closely together."
If that does work as perfectly as the right hon. Gentleman suggests, it is fairly unusual in Whitehall.
Mr. Straw: Not now.
Sir Norman Fowler: I am glad that the right hon. Gentleman said that. However, I would find that defence more convincing were it not for the Pinochet case, where

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it is clear that the Home Secretary had not the first idea of what the Foreign Secretary knew. The Home Secretary makes my point in a wonderful way, and I rest my case. I suggest to my right hon. Friend the Member for Bridgwater that this area should again be examined very deeply, as that obviously would have the thorough endorsement of the Home Secretary.
In looking at the recent history of the security services, especially in regard to subversion, we need to recognise that many of those whom the services had to investigate in the past were members of parties and organisations that made no secret of their wish to undermine parliamentary democracy. I in no way refer to the Campaign for Nuclear Disarmament or the hon. Member for Lewisham, Deptford (Ms Ruddock). However, there was no doubt about the objectives of some of the organisations, for example, the Communist party of Great Britain, which set great store by seeking to infiltrate and manipulate organisations such as trades unions. It achieved only negligible support at the ballot box, but sought to gain an influence that was far out of proportion to that. Such activity was a legitimate subject for attention by the Security Service. It was of concern not only to the last Conservative Government, but to successive Governments.
All that is history. Now, the major effort of the Security Service is aimed at terrorism, both in Northern Ireland and internationally. That point was made well by the right hon. Member for Edinburgh, East and Musselburgh (Dr. Strang), with whom I am glad to be debating again. Terrorism plotted to cause terrorist outrages overseas. We all hope that the new position in Northern Ireland will lead to a reduction in the work of the Security Service. However, at the moment, there is no reason radically to reduce the resources going to that area. It would be a vast mistake to lift our guard too early. There is still a range of breakaway groups that presents a huge challenge.
Intelligence gathering against terrorists is difficult and often dangerous work. Many of those who work in this area risk their lives. As the former head of the Security Service, Stella Rimington, said in her Dimbleby lecture, they do it from a sense of public service and a firm belief in the rule of law and the democratic system. There have been major losses as a result of that work, such as the helicopter crash in 1994. I was with the then Prime Minister in Downing street when news of that crash came through. We have much cause to be grateful to those who work for the Security Service, often in very difficult and dangerous circumstances.
Mr. Peter Viggers: I am grateful to my right hon. Friend for giving way, especially as I have not been here during the debate, having fulfilled a long-standing commitment in my constituency.
As I am a former Northern Ireland Minister and a member of the Defence Committee, hon. Members will not be surprised to hear that I have occasionally come into contact with the security services. I want to pay tribute to their professionalism and dedication. Individuals carry heavy personal responsibility, often at an early age. It is a worthy commitment and long may first-class people come forward to fulfil it.
Sir Norman Fowler: I am grateful to my hon. Friend. I pay tribute to his work in the Northern Ireland Office.
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Important points on accountability have been very much rehearsed in this debate. However—this is my main concern—we must also address other vital issues, such as the agencies' effectiveness, and whether the agencies realise their full potential to do good. The one point on which everyone seems to be united is that the security services have a vastly important role in tackling organised crime, especially the drug trade. Effective operations undoubtedly make full use of intelligence in combating professional crime. Indeed, in the past 10 or 15 years, use of intelligence by police has been one of the most significant developments in fighting crime.
In his introduction to the Committee's report, my right hon. Friend the Member for Bridgwater states:
"In recent years there has been a growth in serious organised crime, funded significantly by the world-wide trade in drugs. The collapse of the Soviet Union and the removal of barriers to travel from those countries let loose dangerous new criminal groups, often including ex-members of the KGB and other intelligence and security services. They have a substantial involvement in drugs and money laundering and, increasingly, in the traffic in illegal immigrants".
At paragraph 4 of the Government's response, the Prime Minister states:
"The Government welcomes the Committees's strong support for the increased priority the Agencies are giving to counter-drugs work. We shall continue to harness the invaluable contribution which they make to this important task."
We all agree on the challenge. However, I tell the Home Secretary that it would be a tragedy if the Prime Minister's words were simply the usual generalisations that Ministers tend to make about organised crime and especially about drugs. I heard the Foreign Secretary's statement about £200 million-worth of drugs being recovered in the past three years. Although that is good, personally, I remain to be convinced that our efforts are adequate to meet the increased challenge posed by organised crime.
I returned recently from the United States, where I saw the work of the Drug Enforcement Administration. The DEA was created in 1973 as a response to increased cocaine processing in south America and heroin refining in south-east Asia. It not only is the lead agency for domestic enforcement of federal drug laws but has sole responsibility for co-ordinating and conducting crucial drug investigations abroad. The DEA is determined to tackle the source of the drugs trade, and the very powerful criminal organisations that are behind the exploitation. Essentially, the DEA performs the very task that everyone has in mind for the security services, particularly the SIS.
The United States is much better resourced than the United Kingdom. Nevertheless, some indication of the emphasis that it is placing on the fight against drugs is provided by the fact that the DEA has a staff of 7,500, with 340 special agents in foreign countries, laboratories and 100 aircraft performing surveillance work. That gives some idea also of the challenge that the United States faces.
The United States operations against the drugs trade are relevant to our operations. Although it may not always be the same criminal organisations from the same parts of the world attempting to bring drugs into the United Kingdom—and too often succeeding—the type of threat is very much the same: exploitation of the public by entirely ruthless and professional criminals.
International developments sometimes have consequences for us. South America, for example, is displacing south-east Asia as the major source of heroin

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in the United States. What happens to the heroin from south-east Asia? It goes to a developing market in Asia; it has also meant a new concentration on Europe.
Increasingly, organised criminals are trafficking not only one drug but any number of drugs for which there is a demand, or for which they think a demand can be created. By any standard, it is a serious and professionally organised operation. It is a brutally organised trade. We have now recognised, by statute at least, that we face very much the same kind of threat.
The SIS and GCHQ can now, by statute, be involved in combating serious crime. I do not share the view of Liberty that those organisations' powers are too wide. Liberty says that they can cover "relatively minor crimes" such as robberies. It depends on one's view of minor crime, but it had not hitherto occurred to me that robbery fell into that category.
The Security Service Act 1996 gave the Security Service the function
"of acting in support of the prevention and detection of serious crime".
I support the legislation's aim, but I am still sceptical about the resources that we are devoting to tackling organised crime. My understanding is that the Security Service is able to devote only a very small percentage of its resources to that. It is difficult to make a complete and accurate assessment of the figure, given the asterisks that appear in the report in place of the relevant sum. I think that I know the figure, but I shall not reveal it. In any event, the service spends only a small proportion of its resources on tackling crime. If one accepts the nature of the challenge, as I do, that proportion needs to be increased. We shall need to return to the issue of whether the effort that we are making is adequately resourced, or even whether it is given sufficient priority within the Budget.
This has been a welcome and valuable debate. The activities of the intelligence agencies must be subject to proper scrutiny—no one seeks to deny that—and the Committee deserves to be congratulated on its work. We must now develop that work but, above all, the aim must be to make the agencies as effective as possible because they have a continuing and invaluable role to play.
9.26 pm
The Secretary of State for the Home Department (Mr. Jack Straw): When the Intelligence and Security Committee was established, there were twin anxieties. There was an anxiety in the House that it would be a weak substitute, or patsy, for a proper, full-blooded Select Committee. The opposite anxiety, among the intelligence agencies, was that the prospect of a Committee of parliamentarians, if not a parliamentary Committee, would mean that the ring of secrecy, which was patently so important for the operation of those agencies, would be compromised and that their work would thereby be undermined. As experience has shown, both anxieties proved misplaced.
We have had a good debate not only on the ISC's work over the past year but, effectively, on its work in the four years since it was established. I shall deal in a moment with the proposals that have been around for a long time for changes in parliamentary scrutiny, but we know that,
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under the excellent chairmanship of the right hon. Member for Bridgwater (Mr. King), members of the Committee, who come from all parties, have done their job properly, as Parliament intended. The Committee has effectively scrutinised the work of the intelligence and security agencies. I have appeared before the Committee twice. The experience of giving evidence to the ISC is no more comfortable than giving evidence to the Select Committee on Home Affairs, which is as it should be.
Given the anxieties that I mentioned, the paradox is just how much the agencies have benefited from the establishment of the ISC. As a result of the establishment of the ISC, there is now a group of right hon. and hon. Members on both sides of the House who have knowledge and expertise about the operation of the agencies, but who approach the issue with independence of judgment. That is hugely to the advantage of the agencies, given that there is such widespread support and admiration for the important work that they do.
My hon. Friends the hon. Members for Sunderland, South (Mr. Mullin), for Workington (Mr. Campbell-Savours), for Pontefract and Castleford (Yvette Cooper), and my hon. Friend the Member for Ealing, Acton and Shepherd's Bush (Mr. Soley), who used to represent Hammersmith—it was better in the old days when he and I were up for that seat and, happily, he got it—all raised the question of whether we should replace the ISC with a Select Committee. Let me make a number of observations before not closing the door on the idea.
First, we should give the ISC time to develop. All members of the Committee supported the proposal that the ISC should have its own investigative capacity. As the right hon. Member for Bridgwater said, we said in paragraph 21 of our response that we intend to consider that request
"as sympathetically as possible and discuss with the Committee any necessary strengthening of its staff."
So we understand the case for that. A separate investigative capacity would obviously enhance the role of the Committee, and in the long run would be an important protection for the agencies.
Secondly, although I do understand the important points of principle to which my hon. Friends the Members for Sunderland, South and for Workington referred, there is an important difference in principle between a Committee established by the House—we all know that it is exactly the same in practice—and one established by Act of Parliament with appointments to it by the Prime Minister. If we are to continue discussing the issue, it is important to recognise that, in practice, the way in which any Select Committee would operate, if it were to operate effectively, would be little different from the way in which the ISC operates in terms of the ring of secrecy and there having to be some prior vetting—ultimately by the Prime Minister—of what is published in the Committee's reports and so on. That said, we do not close the door for ever on the idea of a Select Committee. We want to see how the new developments that are now in train work out in practice.
Mr. Winnick: My right hon. Friend said that the existence of the ISC has been to the advantage of the security agencies, although originally they had reservations. Is it not a possibility that a Select

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Committee, with the restrictions that obviously would be necessary, would give the security agencies even more confidence? Is that not worth considering?
Mr. Straw: That is a seductive argument and it is certainly worth considering. With great respect to my hon. Friend, I shall leave the matter where I have just left it, which is that we should look to the strengthening of the operation of the ISC, which is only four years old. That is but a blink in the 1,000 years of Parliament's history—a matter that, no doubt, we shall discuss again on Thursday. Let us watch with care.
I shall now deal with the points raised by the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), in addition to what he said about the ISC becoming a Select Committee. First, he asked about serious crime and organised crime, a point to which the shadow Home Secretary also referred. The right hon. and learned Gentleman was entirely right to introduce what became the Security Service Act 1996. We supported the provision to extend the role of the Security Service into serious and organised crime. As paragraph 17 of the report states, during the period covered by the report, there have been 24 separate taskings of the Security Service in respect of serious and organised crime. I have seen a great deal of the service's work and believe it to be a valuable addition to the law enforcement effort against serious and organised crime. The Security Service brings expertise not currently available in the police or Customs and Excise.
The Chairman of the Public Accounts Committee, the right hon. Member for Haltemprice and Howden (Mr. Davis), and the former Chairman, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) asked about resources and value for money. The National Audit Office has undertaken some value for money studies of the work of the agencies. That is very important. The NAO should have the fullest possible access to the work of the agencies.
My right hon. Friend the Member for Ashton-under-Lyne rightly reminded us that, if we take secrecy too far, we reduce internal accountability in the agencies. What happened in the Metropolitan police is a dismal story of an absence of the most basic systems for separating those who ordered services from those who paid for them.
The shadow Home Secretary asked about resources. As paragraph 19 of the report shows—this is not too partisan a point—the resources available to the services dropped significantly between 1994 and 1997–98. For a variety of reasons, some good and some not so good, the figure fell from £855 million to £707 million, then to £693 million last year. We are increasing the figure to £743 million for the next three years. Of course there is never as much money as has been sought, but that is a verity at all times for Governments and agencies. We believe that the services have adequate resources.
The right hon. and learned Member for Folkestone and Hythe raised the point about access by staff to industrial tribunals. Work is in hand on that. We shall report to the House when the work is complete.
The right hon. Member for Bridgwater made a wide-ranging speech in which he raised the importance of improving the agencies' internal security. That was reflected in the speech of my hon. Friend the Member for Rhondda (Mr. Rogers) and the sage remarks of my hon.
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Friend the Member for Rother Valley (Mr. Barron). The issue is how to nurture and treat the staff of the agencies, while ensuring that we spot any staff who are becoming disaffected before they are tempted down the road of chequebook treachery—in the resonant phrase of my hon. Friend the Member for Rhondda—which we see too frequently.
The service recognises that internal security has to be improved. Paragraphs 26 and 27 say that the Committee will return to study that in further detail. That is important, because this is a good example of the work of the ISC complementing the work of the agencies. The process of cross-examination and demanding more scrutiny of those internal procedures should raise the standards of internal security.
The right hon. Member for Berwick-upon-Tweed (Mr. Beith) asked about warrant signing—an old chestnut if ever there was one—and whether, rather than by Secretaries of State, warrants should be signed by commissioners along the lines of the commissioners established under the Police Act 1997. I should make two observations. The first was made by the right hon. and learned Member for Folkestone and Hythe, who said that the process of scrutinising and signing applications for warrants is one by which any holder of my office is able, day by day and week by week, to hold the agencies to account. It was not until I started on the process that I understood just how important it is as part of the line of accountability. It is not like having a meeting from time to time. The fact that warrant applications come through routinely and that one has the power to say yes or no to them means that the service must make a proper case for its operation and that the Secretary of State has responsibility to ensure that the law and its requirements are properly complied with. Behind any signature on the warrant, almost resting on one's shoulders, is the shadow of the interception commissioner, who is at present Lord Nolan. In my experience, Lord Nolan and his staff are very thorough.
Secondly, although I do not want to rehearse all the debates on the Police Bill that we had in the run-up to the election—even though I would be very happy to do so—I must point out that the argument at that stage was about the kind of system for authorising warrants other than that of a Secretary of State. It was generally accepted—certainly on both Front Benches—that, had any Secretary of State or putative Secretary of State been rash enough to volunteer to take over warrantry for intrusive surveillance as well as for interception, there would not have been an argument either at this end of the Palace of Westminster or the other. It was precisely because that was not on offer that we had to make other arrangements.
The hon. Member for Cheltenham (Mr. Jones) rightly refered to some important issues on behalf of his many constituents who work at GCHQ and, indeed, on behalf of the town of Cheltenham. GCHQ is dominant there both as an employer and in its rather questionable architecture. Other hon. Members on both sides of the House have referred my involvement—I say only partial—in the fact that there have been four director-generals of GCHQ in the past three or four years. I seek exoneration. I should point out that the present permanent secretary to the Home Office, David Omand, in respect of whose appointment as director-general of GCHQ I played some part, served for slightly longer than I have been Home Secretary. That, at least from the point of view of Conservative Members,

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is a period that cannot come to an end too quickly. I cannot speak for David Omand's predecessors or successors.
Other issues that have been raised in the debate include the question of the holding of files. On 29 July I disclosed what I said I was going to in the Adjournment debate in February. Getting on for 300,000 files of one kind or another are held by the Security Service, although most of them are now closed. How those files are disposed of is very important. I am absolutely clear about one thing, which I made clear in the debate in February and again in July: no individual on whom a file may be held should have any say over whether a file should be disposed of.
It is extremely important to people's civil liberties as well as to a study of the history of this country that objective criteria should be laid down, which the Security Service should be able to follow. It is for that reason that we have asked the Lord Chancellor's Advisory Committee on Public Records, under the chairmanship of the Master of the Rolls, Lord Woolf, with the help of some very distinguished historians, to look at the criteria to be laid down. Their report will—I think—be made available to me just before Christmas.
Mr. Beith: Will the Home Secretary look again at the logic, or lack of logic, of the Government's response to this point? It is simply not the case to say that it would be second guessing if there were independent scrutiny of which files were to be destroyed. That will be long after operational decisions have been taken.
Mr. Straw: I shall look again at that matter and come back to Committee members.
Sir Norman Fowler: Does that mean that the Home Secretary will look again at the position of an independent check, because that is what is being urged?
Mr. Straw: Yes. The Committee has urged that there should be some kind of independent check in respect of files that have long ceased to have any operational value. The question whether a file is operational or not must be a matter for the director-general. There is then a separate question of whether a file that has had no value for many years should or should not be disposed of.
The first stage is that we are getting advice from the Lord Chancellor's advisory committee. The second issue is whether there should be any independent scrutiny of the decisions made about the disposal of the files. The Committee said one thing, and the Government have
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raised the issue of second guessing. Many representations have been raised this evening about whether we should think again and—without pre-empting our second thoughts on the matter—I am happy to take it away and think again.
Before I conclude, I shall refer to one other matter—the role of the commissioners and the tribunals. As the report makes clear, there have been a number of complaints to the tribunals and commissioners over the years but, so far, none of those has been successful. That could lead to the conclusion that the tribunals—despite the fact that they are chaired by eminent jurists—are simply there to whitewash the operations and poor practices of the agencies. On the other hand, it could mean that the internal processes of the agencies are sufficiently thorough so that—at least up to now—it has been quite appropriate that none of the complaints has been substantiated.
I believe that it is very much the latter, and not the former, that is the truth. In terms of interception, what has been striking to me—as someone coming entirely new to my role as one of the few Secretaries of State dealing with warrants—is how thorough the process is. Therefore, I am not surprised that no complaint has been upheld, and long may that continue. The interception of communications is, in principle and in practice, a serious violation of people's civil liberties, and it should take place only when the narrow criteria laid down in legislation are complied with.
I finish where my right hon. Friend the Foreign Secretary began—by paying tribute to a number of people. First, I pay tribute to the Chairman and the members of the Intelligence and Security Committee for the thoroughness of their work and for their independence of judgment, which shines through this report. Secondly, I pay tribute to a small group of officials in the Foreign and Commonwealth Office, the Home Office and the Cabinet Office who are very often unsung but have the important task on behalf of Ministers of monitoring the work of the agencies.
Thirdly, I pay tribute—and express the thanks of the whole House—to the staff of all the agencies. They do very important work—important to the security of this nation, important in terms of our economic well-being and important in trying to make our society safe from serious crime. Those are dedicated people who, because of the nature of their work, cannot speak for themselves. It is right today that Parliament and the House of Commons has spoken for them, and has recognised the value, importance and integrity of their work.
Mr. Mike Hall: I beg to ask leave to withdraw the motion.
Motion, by leave, withdrawn.

Millennium Tower, Portsmouth
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mike Hall]
9.48 pm
Mr. Mike Hancock: I am delighted to have this opportunity to raise an issue that is important for the people of Portsmouth and south Hampshire; indeed, I am sure that people in much of the United Kingdom will be interested to know about it. I am also delighted that we have a few extra minutes, as the hon. Members for Gosport (Mr. Viggers) and for Portsmouth, North (Mr. Rapson) have said, either to me or to the local newspaper, that they want to contribute to the debate—we would have been stretched if we had had only 30 minutes.
In March 1995, no one in the area opposed the decision by Portsmouth and Gosport to make a bid for funds for a landmark project. The bid offered a great opportunity for jobs, not only in the short term—in construction and in the many different aspects of the scheme—but in the long term, as a result of the development of new and existing attractions. As the then leader of Hampshire county council, I strongly supported the bid; indeed, I convinced my colleagues on the council to invest a great deal of money in the schemes, particularly in those in Gosport.
The schemes were put together in such a way that the community and many members of the council had little real input. They were dreamed up by people who had their vision and then brought other people in. No one can deny that those involved in the initial concept formed a close-knit circle—that may be how such ventures have to start, and I am not suggesting that there is anything wrong with it. However, at every stage, the public, especially in Portsmouth and Gosport, should have been brought in on the act—they needed to have a positive and meaningful share in the proposals. That did not happen.
There could be few doubts about some aspects of the project. Someone needed to step in to redevelop the older and more rundown areas of Gosport, particularly the former service establishment at Priddy's Hard. Realistically, only the millennium package would provide the opportunity for such investment.
There was also a need to rekindle development in the less rundown former Ministry of Defence establishments in Portsmouth. The Mary Rose, HMS Warrior, HMS Victory and the naval museum needed to be rejuvenated so that the heritage area could sustain the number of visitors that we had come to expect and that it had come to depend on. For the area, the millennium package was vital.
It was suggested that we needed something to spark the imagination of the Government, the nation and—most important—the Millennium Commission. The small team came up with the idea of a tower, although no one then knew what it would look like. We saw artists' impressions of cross-channel ferries sailing by the tower through a gigantic arch of water created by water cannon across the harbour between Portsmouth and Gosport. It all looked very nice.
I had been in local government in Portsmouth for nearly 30 years, and was leader of Hampshire county council. I had been a trustee of the naval museum and the Mary Rose, and had been actively involved in raising money
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for all the projects in the heritage area. Indeed, I had convinced the local authority to give the best part of £1 million to help the heritage area. However, I doubted whether a tower would be a viable proposition in that area, for reasons that I stated loud and clear.
To succeed, a tower would need to attract visitors, but the area contained a number of competing activities—people with limited resources would have to choose what to spend their money on.
As I know from family experience, towers can be divisive. Some people like to go up them and some do not. In a family of four, two may want to go up and two may not, as I found with my family. What does one do?
A day out in the heritage area is a wonderful experience, but it is not cheap. One needs the best part of the day, and the entry fee for a family of four plus buying a small snack at lunchtime costs £60 or more. Not too many families can do that very often. The tower would be another attraction in the area. It will have to be self-sustaining and viable and will need an awful lot of visitors.
I raised strong objections to the tower, which was first suggested in March 1995. Construction should start in a few months, but the planning application that is before the city council tells us nothing.
On Friday, I asked the planning officer to tell me what the tower was to be made of, what colour it would be, what maintenance would be necessary and how long it would last, but he could not. He said that we would have to learn all those things between now and when the planning committee meets. We must bear in mind the fact that the council has just signed a deal with the Millennium Commission to build the tower at a cost of £23 million. How can anyone be so specific, if we do not know what the tower is to be made of? When the concept was first agreed nearly three years ago, the Millennium Commission was to have a 35 per cent. share, but it has now increased it to 68 per cent.
The history of the concept is interesting. The then Secretary of State for National Heritage, the right hon. Member for South-West Surrey (Mrs. Bottomley), visited Portsmouth—it was one of many visits, as she passed the site whenever she went to her holiday home on the Isle of Wight, and I am sure that she greatly enjoyed the trip out of Portsmouth harbour—and made great play of the fact that the tower should be of national and international significance. She likened the competition that should be held to design it to that held when Trafalgar square and Nelson's column were created. I think she said 144 people submitted bids to build the column and create the spectacle in Trafalgar square. She felt that Portsmouth deserved a similar competition. However, we did not have it.
Well-known architects such as Sir Norman Foster, Michael Wilford, who took over from James Stirling, and Santiago Calatrava, who built the Barcelona Olympic tower, all expressed interest in the concept, but none was asked. The city council and the developers offered the people of Portsmouth and the surrounding area three options. The developer visited me in my offices in Parliament street, and told me that he did not like one of the three. He told me which one he preferred, and said that the third had been included to give people three choices.
Funnily enough, the private sector developer, Berkeley, did not get the design that it wanted, as the public chose the spinnaker. However, the public were not asked

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whether they wanted a tower at the entrance of Portsmouth harbour. They were simply asked which one of the three designs they preferred.
No one objected to any of the other aspects of the millennium scheme. Many of them, such as the boathouse project, Priddy's Hard and the millennium walkway, are essential to the growth of the areas concerned, and the potential is enormous, but most people in Portsmouth, when asked about the tower, say that it is a waste of money. I would have said so had I not been a member of the council. I would have said that the money could have been better spent on hospitals, schools and many other things.
I had dozens of letters asking me to get the commission to spend the money on other things, but we were not offered a choice. The city council said, rightly, that the commission had made it clear that the money was for a tower, so a tower it had to be.
At the same time, the Ministry of Defence was releasing the Gunwharf site at HMS Vernon, and it was intended that the tower should be part of the development. The millennium scheme and the development of Gunwharf were so interwoven as to be inextricable. I asked the Ministry of Defence about the disposal of the Gunwharf site. I am very disappointed—
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dowd.]
Mr. Hancock: The reply from the Under-Secretary of State for Defence said:
"Offers for the Gunwharf site were sought on the basis of open market value and took into account the Planning Brief for the site previously provided … The bid chosen was considered to provide the best value for money. I am withholding information on the details of the sale receipt under exemption 14 of the Code of Practice on Access to Government Information."
I find that outrageous from a Government who came into office saying that were for open government. How on earth can the sale receipt for a piece of public real estate be withheld? What on earth can be the commercial significance of that disposal?
Berkeley got the prime site that it wanted. Until March, April, May this year, Berkeley was expected to build the tower. The city council was stupid enough to sign an agreement with the Millennium Commission saying that it was committed to building a tower, without having Berkeley signed up to build it. Once the commission had us on the hook and had checked the projects that Berkeley, the city council and others had submitted, I started to query the figures. I was told that the figures had been put together professionally, and that Berkeley, the city council and, more important, the commission were happy with the figures.
I have written well over 200 letters to the city council, the commission and others, to try to get the answers to questions, but those answers have been difficult to come by. I am a member of the city council, and I have not been able to get straight answers without writing at least three times, on some occasions, with the same question.
When I challenged the figures, I was told that there was nothing wrong with them. I wrote to the Millennium Commission on 11 February asking what it thought of the
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figures, given that the tourism market was very vulnerable. The commission had always maintained that its role was to be extra vigilant with public money. I wrote to the chief executive to tell him that I would be raising these points, and he had the opportunity, if he had wanted to, to contact me today.
The chief executive of the commission wrote:
"The testing and assessment of the visitor impact of the various proposed projects, and the impact of each project on the others, is primarily a matter for the Renaissance promoters. As you know, an assessment has been done, it was put to your local authority some time ago. It is the Commission view that that assessment was reasonable."
The commission allowed the development to continue, but it did not know that, at the same time as that letter was being written to me, Berkeley, the developer, had told the city council that it no longer believed the figures.
In July, Berkeley wrote to the city council:
"During the course of our discussions, however, we agreed to work in co-operation with Portsmouth City Council and to be helpful as possible in terms of helping Portsmouth to secure the building of the Tower … we offered a contribution of £3 million".
They were offering £3 million because they wanted to walk away.
In the same letter, the developers say:
"At that meeting we made it absolutely clear to you that we considered that the visitor numbers produced by Deloitte & Touche for the Tower were badly flawed and that the Tower was not financially viable."
Those people were set to make millions of pounds out of the development, with the tower right next door as the landmark project. The developers had verbally committed themselves, and certainly the city council innocently believed that they were going to build it. However, the developers walked away once they had scrutinised the same figures which the Millennium Commission assured me—and, I suspect, their commissioners and the Secretary of State—had nothing wrong with them. The developers were even prepared to offer £3 million to the city council as a consolation.
We were then left with no private finance, except for the £3 million, and some land for the scheme. What could the city council do next? Where could it get the money? Nearly 200 press releases have been issued by the city council about the project since 1995. The amount of spin that has been put on the tower project would make Shane Warne, the Australian spin bowler, look professionally inept.
Within weeks, the press releases contradicted themselves. One week it was claimed that 4,000 jobs would be created, and the next it was 3,500. Ludicrous claims were made, including that the Fine Arts Commission was to be consulted on the design of the tower so that we would not get a second-rate design. It has never been asked in three years for its opinion on the tower. Why not? Press releases sent out by the city council claim that the Fine Arts Commission would be a key player in ensuring that the tower would be the best we could have.
We were left with no private money, except for the £3 million, and a very difficult problem for the city council. It tried to attract other private finance. It could not do so, so it went back to the Millennium Commission, which suggested the downgrading of the whole scheme from more than £40 million to £38 million. The water

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feature was felt to be impossible to achieve and the only satisfactory alternative was a mobile water cannon mounted on a barge. The Millennium Commission felt that that was unacceptable, so it turned it down. Car parking was reduced, and sculptures and other landscaping around the heritage area were removed from the plan.
The Millennium Commission said that it would put more money into the tower, the cost of which escalated from 35 per cent. of the project to 68 per cent. That meant that the tower would cost the largest sum of any single project in any landmark scheme. The commission is basing that investment on the assurances given by Portsmouth city council. I know that the city council wants the tower to succeed, and I do not want to see it left in a mess. I represent too many people who find it hard enough to get through the week, without having to pay bigger bills to fund any unsuccessful aspect of the project. Once it is started, there is no alternative to success.
Two Secretaries of State have visited the area, and they were both enthralled by the concept. Both have given substantial support, although one would have liked to see a competition and the other, the current Secretary of State, did not seem to be too interested in any criticism of, or possible liabilities arising from, the scheme.
The purpose of the debate tonight is to try to obtain from the Minister firm assurances for the people I represent that she will not allow Portsmouth city council to be left holding a very expensive baby, in the short, middle or long term. We are talking about a 500 ft-plus tower that people can go up and down, costing £23 million. The project remains to be built, and the original concept was for design, building and operation in a single package by a single partner of the city council—Berkeley Homes. None of that has happened. Now, the tower will, for the first time, be in the ownership of the city council. That is an amazing and enormous liability for the next 50, 75 or 100 years. No one expects the tower to come down in 25 years. It will be there for a significant period, and it will be an continuing liability.
Portsmouth city council is negotiating with two types of people. It needs someone to build the tower for £23 million, and I have been assured that there is a good chance of a fixed-price contract. The council is also seeking someone to operate the tower at no cost to the council. I wish it luck. Anything short of that would be totally unacceptable. The Government must see that that cannot be allowed to happen. When the Public Accounts Committee discussed landmark projects, it said that no local authority should be left with a continuing liability, as that would be unfair, and not sensible.
If building begins and the finances do not run according to plan, I want the Millennium Commission or the Government to support the costs. There is no guarantee that the tower can be built for £23 million. We do not even know what it will be made of. Will it be steel and concrete? Will it be concrete alone? We do not even know what will be on the outside. What we do know, however, from our experience in Portsmouth at three schemes—a housing development at Portsdown park, the Pyramid leisure complex and the Tricorn development—is that building projects can cost local authorities a great deal of money and heartache. The people of Portsmouth will not
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forgive the council, any of the city's politicians or the Government if the scheme goes wrong, leaving them holding a very expensive baby.
As the agreement stands, the Millennium Commission can step aside like Pontius Pilate, self-righteously saying that its job is to protect public money, and that, once an agreement is made that the city council should deliver the project, its obligations to safeguard public money and the interests of the people of Portsmouth cease. Portsmouth city council would be left alone to be responsible, because it had signed an agreement to build the tower.
The tower is too important to be regarded as a matter for a political row between colleagues, as the hon. Member for Gosport has suggested in the local paper. What I am saying is too important to be dismissed as waffle or grandstanding, as it has been by the hon. Member for Portsmouth, North in the local paper. The matter is important because people have not been consulted, except by way of press releases that contradict themselves over a three-year period and that, in some cases, give nothing but misleading information.
Portsmouth has significant problems relating to education, social services, housing and many more policy areas. Every precious pound that can be squeezed from the Department for the Environment, Transport and the Regions is needed to fund local government services. We need every penny we can get. The city succeeds because of its successful ferry port, but nothing should be allowed to jeopardise our fragile financial situation, and we are no different from Gosport or any other local authority area in that. We must maintain the stability of our finances, and that can be done only if someone gives some assurances that will remove the burden from Portsmouth city council.
If we have to have a tower—and I am not convinced of the need for it—it must be something of which we can all be proud. It must not require other things to be added to it to make it viable, so that it is something short of an Alton Towers feature. It should be publicly accessible, it should be something that we can be proud of as a nation and the people of Portsmouth should not have to pay for it in years to come. I hope that tonight the Minister will lift much pressure from me and, potentially, from the people of Portsmouth.
10.14 pm
Mr. Syd Rapson: I have a different story. Although the tower is not in my constituency, the city council covers a tightly knit area. I represent the people of Portsmouth as much as the hon. Member for Portsmouth, South (Mr. Hancock) does. The hon. Member for Gosport (Mr. Viggers) and I speak with the authority of the local authorities involved in the scheme.
I have been a local councillor for as long as the hon. Member for Portsmouth, South. We are local government people as well as Members of Parliament. I believe in local government. I believe that democratically elected local government has the right to decide planning for local people. It is not the job of Parliament to try to overcome that, as if we are the guardians of everything that goes on and can overrule what people want locally.
The project was originally dreamed up as a landmark scheme. The tower and the water fountains were an important part of the scheme that was chosen. Berkeley

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did not do enough investigation into visitor numbers. It is basically a building company. When it did its homework, it found that the numbers were not quite correct. The city council had to re-evaluate the scheme, which it did recently with the support of the Millennium Commission. The commission crawled all over the figures to ensure that everything was absolutely correct.
The commission insisted that the city council underwrote the cost of the scheme. The city council did that, although it has operators ready to guarantee to underwrite the commercial risk involved. Delicate negotiations are going on, which is why things are kept fairly confidential. The city council has a millennium sub-committee, which has all the information, with a representative of the Liberal Democrat group on it. All the information is with local councillors.
The scheme is viable. An operator is ready to come in to run the tower. I must explain one confusing point. The original idea was that a company would take on the whole scheme and had to build a tower that would cost a considerable sum. It had not worked out the figures and has drawn back, offering £3 million back. The package has been rearranged with commission money and other moneys. The tower will be built within the money envelope that we now have. The only difference is that the operator does not have to find the money for construction, only for operation. It can do that.
This is a local government issue. We have total confidence in the scheme, which is well supported by the people of Portsmouth. It should be considered in that context. It is a worthwhile project, which should be supported by all.
10.17 pm
Mr. Peter Viggers: The hon. Member for Portsmouth, South (Mr. Hancock) was fortunate to obtain this debate, in which I intervene with his consent. It was particularly good of him to allow that, because he knows that my view is not exactly parallel with his.
The Portsmouth harbour millennium project is very important to the whole Portsmouth-Gosport area. It will involve the development of walkways with retail opportunities around the museums and the characterful Portsmouth harbour area, with its naval and civilian yachting movements. It will develop the defence heritage area of Portsmouth harbour. If successful—I am confident that it will be—it should result in the sort of project that has been so successful in places such as Barcelona, San Antonio and Philadelphia.
It is a big project, involving £81 million, of which about half will be provided by the Millennium Commission. We hope that, whereas in the past people have visited the Portsmouth area specifically for one purpose—perhaps to see Victory, Warrior, of which I am proud to be a director, or the submarine museum—the scheme will develop into the sort of project that people will visit not for a day but for two or three. There is overwhelming support for the tower's spinnaker design, to which the hon. Member for Portsmouth, South referred. The local newspaper said:
"without the tower, the whole project collapses into meaningless rubble. It is the focal point, the beacon that will lure visitors to the revitalised harbour area."
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That is a strong way of putting it, but the tower is an important part of the millennium project. It is a symbol of the imaginative plan that is so important to the Portsmouth harbour area and the whole of south Hampshire. I hope that the Minister will reassure us that she gives her full backing to completion of the project.
10.20 pm
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Janet Anderson): I am grateful to the hon. Member for Portsmouth, South (Mr. Hancock) for the opportunity to put the record straight regarding Portsmouth city council's support for this exciting project. I am also grateful to the hon. Member for Gosport (Mr. Viggers) for confirming the project's importance to Portsmouth, and to my hon. Friend the Member for Portsmouth, North (Mr. Rapson), who has long been a supporter of the project, and who illustrated his firm wish to see it succeed.
I must emphasise, first, that local authorities are independently elected bodies, answerable for their policies to their electorate. It is for each authority to decide whether the scope of its powers is wide enough to carry out a particular activity. Section 137 of the Local Government Act 1972 allows authorities to incur expenditure up to specified limits if, in their opinion, it is in the interests of their local area.
It is also important to remember that the renaissance of Portsmouth harbour is a Millennium Commission project, not a Government initiative. As the House is aware, the commission is a politically independent body, and the Government do not wish to compromise that independence. The detail of the project and the associated contractual negotiations remain matters for the Millennium Commission and the grant recipient.
In September 1995, the commission awarded a grant of £40 million to the project, against an anticipated total cost of £86 million. The renaissance of Portsmouth harbour is an ambitious development, incorporating many individual projects. The scheme emphasises public access to the harbour water front, linking the communities of Portsmouth and Gosport, and promoting the area's maritime history. It focuses on creating an international maritime arena that will provide leisure opportunities for local residents and visitors alike.
The project was developed by the Portsmouth and South East Hampshire Partnership, a consortium of local authorities and businesses. It has been led by Portsmouth city council on behalf of Portsmouth Harbour Renaissance Ltd. At an early stage in the appraisal process, the Millennium Commission identified the project as having the potential to become one of its landmark developments. Combined with the scheme's complex nature, that fact led the commission to work in partnership with the applicant during the development stage.
Tonight's debate, however, concerns specifically the construction of the millennium tower. The tower has always been a key element of the project, integral to its success. In March this year, local people unambiguously selected the spinnaker design as the preferred design concept, and outline planning permission was secured. The intended cost of the tower—some £22 million in total—was to be met partly by the commission, which would contribute £9 million, and partly by the Berkeley group.

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In July, Berkeley decided to reduce its cash contribution from some £10 million to £3 million, although it remained committed to a contribution in kind of £4.3 million to provide the necessary infrastructure. That decision created a funding gap.
Portsmouth city council has now agreed, if necessary—I stress the words "if necessary"—to underwrite a portion of the commercial risk of the tower's operation. I understand that the hon. Member for Portsmouth, South takes issue with that decision. It is not unreasonable to ask why the city council should choose to invest in a scheme which the Berkeley group apparently did not find attractive.
Fortunately, I am able to answer that question. In July, Berkeley undertook a review of the business plan, and decided that the anticipated income projections from the millennium tower did not justify the level of capital expenditure that it was committed to provide. That was partly because the initial business plan had incorporated a number of commercial enhancements to the tower—restaurants, and so on. However, the spinnaker design—which, as the hon. Member for Gosport pointed out, was chosen by local people when they were consulted—does not include those elements; it is an architectural piece, a landmark.
Mr. Hancock: Have the Minister's officers at the Millennium Commission told her that there are proposals to enhance the tower? Have they told her that there could be a rollercoaster going around the base of it, or up part of it, and that there might be some sort of exciting ride as well? That would reduce what the Minister has just described as a free-standing piece of architecture to something that might have to be continually upgraded to keep people coming.
Is the Minister aware that the viability figures that she mentioned have now been reduced by nearly 300,000 in terms of the number of visitors?
Janet Anderson: I hope that, if the hon. Gentleman is patient, I shall be able to answer his questions. If I do not, he is at liberty to write to me, and I shall answer them then.
Berkeley's decision is not the issue here. It is perfectly reasonable for a commercial company to choose to withdraw from a project if it does not appear that substantial returns will accrue. Portsmouth city council, however, is a body with different priorities. It exists not to make a profit, but to promote the best interests of the local population. The city council strongly believes that the scheme in its entirety will have significant benefits for the local community. The most conservative analysis suggests that it will increase the number of visitors to the
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area, create additional employment, and raise the profile of Portsmouth, both within the United Kingdom and abroad.
Furthermore, the decision to underwrite the project merely makes explicit an implicit undertaking that was always part of the project's business plan. As a partner of Portsmouth Harbour Renaissance Ltd., the city council was party to an implicit underwriting of the entire scheme. It formalised that commitment to provide the Millennium Commission with additional security, although it is unlikely that it will ever be called upon to honour it.
Portsmouth Harbour Renaissance Ltd. is currently involved in complex negotiations to find a replacement commercial operator for the tower. It and the Millennium Commission have every confidence that such an operator—one who shares their view that the millennium tower is an integral part of the harbour renaissance scheme—will be found. It is regrettable that, at such a delicate stage in this exciting project's development, the hon. Member for Portsmouth, South should see fit to push into the public domain the subject matter of such sensitive negotiations.
Mr. Hancock: Will the Minister give way?
Janet Anderson: I hope that the hon. Gentleman will forgive me if I do not. I have only a few minutes left, and the hon. Gentleman said that he wished to hear what I had to say.
I hope that what I have said will reassure him, but let me make one final point to provide him with yet more reassurance. The leader of the council has given me an absolute assurance that, in the very unlikely event of the council's ever having to underwrite the operating costs of the millennium tower, there will be no question of its front-line services being cut as a result.
The hon. Member for Gosport mentioned a leader in the 2 October issue of the Portsmouth paper The News. Let me repeat part of what that paper said:
"when the Portsmouth South MP gets his teeth into something, he doesn't let go. But he is as wrong about the harbour's millennium tower now as he has been all along … Mr. Hancock never wanted the tower but he has lost the argument and it is time he accepted it."
The Government's opinion in this matter is straightforward. We believe that the Millennium Commission has made the right decision in agreeing to support the renaissance of Portsmouth harbour project, and we hope that the negotiations will soon be resolved in the interests of the people of Portsmouth and Gosport. We invite the hon. Member for Portsmouth, South to join us in that desire.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes past Ten o'clock.